What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-27 compared with 2025-11-19 · 133 added, 204 removed, 311 unchanged (52% of the section changed)

99 unchanged sentences

and biochar to the grid.

of Operating Results the Nine months Ended September 30, 2025 Compared to the same period in 2024

of Operating Results the three months Ended March 31, 2026 Compared to the same period in March 31, 2025 (Restated)

financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets

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The Company had a total stockholder’s equity of $7,030,646 and

a working capital deficit of 1,523,862 as of September 30, 2025, The company also had an accumulated deficit of $30,922,858 as of September

30, 2025 and used 6,218,085 in net cash from operating activities for the nine months ended September 30, 2025.

Therefore, there is substantial

doubt about the ability of the Company to continue as a going concern.

There can be no assurance that the Company will achieve its goals

and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2)

to generate positive cash flow from operations.

the nine months ended September 30, 2025, our total revenue was $1,801,769, compared to $1,944,333 for the same period in 2024.

was primarily due to minimal contributions (less than 3%) from our Vermont Renewable Gas project, as the project is currently undergoing

review for a Certificate of Public Good with the Public Utility Commission.

We currently have an estimated $10 million backlog associated

with this project.

the nine months ended September 30, 2025, our gross profit was $1,135,315, compared to $641,575 for the same period in 2024.

in gross profit and margin was primarily due to the sale of higher-margin refurbished systems, which contributed more favorably to overall

profitability compared to prior periods.

the nine months ended September 30, 2025, our operating expenses were $3,301,052, compared to $3,193,447 for the same period in 2024.

The increase in expenses was primarily due to costs associated with a consulting agreement related to a potential acquisition, partially

offset by lower reduction in general and administrative costs.

the nine months ended September 30, 2025, we recorded a net loss of $3,522,342, compared to $3,550,669 for the same period in 2024.

net loss remained relatively steady year-over-year, reflecting reduced salary expenses, lower general, legal and accounting costs, and

improved margins from our U.S.-based business activities.

the quarter ended September 30, 2025, stockholders’ equity increased to $7,095,133, compared to $2,938,502 as of December 31, 2024,

primarily due to higher increase from investments.

a working capital of $1,036,272 as of March 31, 2026, The company also had an accumulated deficit of $35,962,199 as of March 31, 2026 and

used $836,618 in net cash from operating activities for the three months ended March 31, 2026.

Therefore, there is substantial doubt

about the ability of the Company to continue as a going concern.

There can be no assurance that the Company will achieve its goals and

reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to

generate positive cash flow from operations.

the three months ended March 31, 2026, total revenue was $783,705, compared to $441,940 for the same period in 2025.

The increase was

primarily attributable to higher revenue generated by our natural gas business in China.

the three months ended March 31, 2026, our gross profit was $(13,930), compared to $411,878 for the same period in 2025.

in gross profit and gross margin was primarily attributable to a shift in our revenue mix, with a greater proportion of revenue generated

by our lower-margin natural gas business, as well as the absence of higher-margin clean energy system sales during the period.

the three months ended March 31, 2026, our operating expenses were $705,354, compared to $824,656 for the same period in 2025.

in operating expenses was primarily attributable to lower salary and related personnel costs as fewer resources were required for our

Vermont Renewable Gas (“VRG”) projects, which are progressing into the final phase of the permitting process.

the three months ended March 31, 2026, we recorded a net loss of $662,200, compared to $660,007 for the same period in 2025.

loss remained relatively steady year-over-year, reflecting reduced salary expenses, lower general, legal and accounting costs, the impact

of financial results, the change in FV of the note receivable, and improved margins from our U.S.-based business activities.

the quarter ended March 31, 2026, stockholders’ equity increased to $7,030,646 compared to $6,246,597 as of December 31, 2025,

primarily due to higher increase from investments and interest income.

has successfully repositioned itself as a diversified clean energy solutions provider by establishing four distinct business segments

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HK (Natural Gas Trading and Acquisitions)

for the first quarter was primarily driven by the Clean Energy HRS and CETY Renewables segments.

Looking ahead, the company anticipates

stronger revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments in the latter half of the year, segments which

are expected to deliver higher gross margins.

for the first quarter was primarily driven by the CETY HK natural gas trading business.

Looking ahead, the company anticipates stronger

revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments with higher margins.

pilot Waste-to-Energy facility in Vermont, which integrates all of the company’s proprietary technologies and operational expertise

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believes this 4-segment strategy has created many operational synergies and cross-selling opportunities across different markets.

growth in the non-China operations in the nine months ended of 2025 vs.

same period in 2024 was a result of this strategy.

CETY believes

that it will continue to deliver growth on these segments this year.

The main macro factor benefiting us is the global commitment to

push renewable energy to the forefront from governments across the world.

Another catalyst that will potentially help our Company, is

a continuously improving our global supply chain and lowering our cost.

main macro factor benefiting us is the global commitment to push renewable energy to the forefront from governments across the world.

Another catalyst that will potentially help our Company, is a continuously improving our global supply chain and lowering our cost.

expects to and will continue to execute its corporate strategy to build sustained and profitable growth by providing end to end fully

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note 12 to the notes to the financial statements for a discussion on related party transaction

of the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024

the nine months ended September 30, 2025, our total revenue was $1,801,769 compared to 1,944,333 for the same period in 2024.

revenue was contributed to primarily due to minimal contributions from our China natural gas business.

the nine months ended September 30, 2025, our revenue from the Heat Recovery Solutions (HRS) segment was $805,975, compared to $158,829

for the same period in 2024.

The increase was primarily driven by higher product sales and ongoing progress in our HRS pipeline.

to work diligently on completing engineering and design efforts, which will enable us to execute contractual agreements and close additional

opportunities.

of the three Ended March 31, 2026, Compared to the three ended March 31, 2025 (Restated)

the three months ended March 31, 2026, our total revenue was $783,705 compared to $441,940 for the same period in 2025.

The higher revenue

was contributed to primarily due to our China natural gas business.

the three months ended March 31, 2026, our revenue from the Heat Recovery Solutions (HRS) segment was $7,538, compared to $262,354 for

the same period in 2025.

The decrease was primarily driven by no product sales from our HRS business unit.

We continue to work diligently

on current requirements and engineering and design, which will enable us to execute contractual agreements and close additional opportunities.

sales cycle for these projects tends to be longer due to cost considerations and the integration complexity of our technology.

also engaging with financial institutions to support project financing, as customers increasingly adopt Independent Power Producer (IPP)

Additionally, general economic uncertainty and evolving federal clean-energy legislation have influenced the timing of certain

project commitments.

For the nine months ended September 30, 2025, revenue

from the CETY Renewables segment was $409,699, compared to $ 590,985 for the same period in 2024.

This segment is expected to remain

relatively stable until construction activities commence later this year.

the nine months ended September 30, 2025, CETY reported no revenue from its Engineering and Manufacturing segments, compared to $9,341

for the same period in 2024.

This segment is still in its early stages and much of the related activity is currently being integrated

into the HRS and CETY Renewables segments.

However, with a developing pipeline of opportunities, CETY expects to see gradual revenue

growth from this segment over the coming quarters.

the nine months ended September 30, 2025, revenue from our natural gas (NG) business was $586,095, a decrease from $1,185,178 for the

same period in 2024.

This decline is primarily due to macroeconomic factors and our strategic decision to reduce focus on lower-margin

business activities.

the nine months ended September 30, 2025, our gross profit totaled $1,135,315, representing an increase from $641,575 for the same period

The improvement in gross profit and margin was primarily driven by the sale of higher-margin refurbished systems and greater

contributions from CETY’s non-natural gas business in China, where our operations and technologies generate substantially higher

margins compared to our NG segment.

the nine months ended September 30, 2025, our gross profit from Engineering and Manufacturing amounted to $0, compared to $7,806 for the

Additionally, general economic uncertainty and evolving federal clean-energy legislation, and investment tax credits have influenced

the timing of certain project commitments.

the three months ended March 31, 2026, revenue from the CETY Renewables segment was $0, compared to $176,105 for the same period in 2025.

The segment generated no revenue during the period as the related projects remain pending final review by the Vermont Public Utility

Commission and issuance of the Certificate of Public Good.

Revenue-generating construction activities are expected to commence following

receipt of the required regulatory approvals.

the three months ended March 31, 2026, CETY reported 0 revenue from its Engineering and Manufacturing segments, compared to no for the

same period in 2025.

This segment is still in its early stages and much of the related activity is currently being integrated into the

HRS and CETY Renewables segments.

However, with a developing pipeline of opportunities, CETY expects to see gradual revenue growth from

this segment.

the three months ended March 31, 2026, revenue from our natural gas (NG) business was $776,167 an increase from $3,481 for the same period

The increase primarily reflects higher revenue from our China natural gas business, despite the impact of macroeconomic conditions

and our strategic decision to reduce our focus on lower-margin business activities.

the three months ended March 31, 2026, gross profit was $(13,930), compared to $411,878 for the same period in 2025.

The decrease was

primarily attributable to the absence of sales of our higher-margin clean energy systems during the period, combined with a greater proportion

of revenue generated by our natural gas business in China, which operates at lower gross margins.

the three months ended March 31, 2026, our gross profit from Engineering and Manufacturing amounted to $0, compared to $0 for the same

period in 2025.

This segment is a recent addition to CETY’s portfolio, currently serving as a support for our ongoing internal

Nevertheless, it is anticipated to expand notably as CETY shifts its focus towards providing comprehensive end-to-end power

generation and integrated solutions.

the nine months ended September 30, 2025, our gross profit from the Heat Recovery Solutions (HRS) segment was $715,709, compared to $83,822

for the same period in 2024.

This significant increase in gross profit was primarily driven by higher revenues, including the sale of

refurbished, higher-margin systems, as well as equipment and engineering service sales.

the nine months ended September 30, 2025, our gross profit from the CETY Renewables segment was $407,265, compared to $549,947 for the

same period in 2024.

The Company’s operations have remained steady as we progress through the Certificate of Public Good (CPG)

process and approach the final stages of permitting.

the nine months ended September 30, 2025, our gross profit from our wholly owned subsidiary, JHJ, was $12,341, down from $0 for the same

Nevertheless, it is anticipated to expand as CETY shifts its focus towards providing comprehensive end-to-end power generation

and integrated solutions.

the three months ended March 31, 2026, gross profit from our Heat Recovery Solutions (“HRS”) segment was $(25,223), compared

to $235,658 for the same period in 2025.

The decrease in gross profit was primarily attributable to the absence of product sales during

the period, combined with higher freight costs.

the three months ended March 31, 2026, our gross profit from the CETY Renewables segment was $0, compared to $57,159 for the same period

The Company is working through the Certificate of Public Good (CPG) process and approach the final stages of permitting.

the three months ended March 31, 2026, our gross profit from our wholly owned subsidiary, JHJ, was $11,293, up from $115 for the same

period in 2025.

This decrease was primarily due to minimal business activity in China, which was partly a result of our strategic decision

to reduce focus on lower-margin businesses in the region.

This increase was primarily due to increase business activity in China.

General and Administrative (SG&A) Expenses

the nine months ended September 30, 2025, our selling, general and administrative (SG&A) expenses totaled $3,301,052, compared to

the three months ended March 31, 2026, our selling, general and administrative (SG&A) expenses totaled $147,729 compared to $222,557

for the same period in 2025.

The increase was primarily due to costs associated with a consulting agreement related to a potential

acquisition, partially offset by lower operating and salary expenses from our China operations and a reduction in certain general and

administrative costs.

the nine months ended September 30, 2025, our salary expenses totaled $1,329,800, compared to $1,481,316 for the same period in 2024.

The decrease was primarily due to reduced activity within our CETY Renewables business, while salary levels across other segments remained

relatively stable.

the nine months ended September 30, 2025, our travel expenses were $127,312, compared to $135,964 for the same period in 2024.

The decrease was primarily due to lower costs associated with a consulting agreement related to IR activities

and Nasdaq subscription.

the three months ended March 31, 2026, our salary expenses totaled $294,433 compared to $433,799 for the same period in 2025.

was primarily due to reduced activity within our CETY Renewables business, while salary levels across other segments remained relatively

the three months ended March 31, 2026, our travel expenses were $28,062, compared to $32,377 for the same period in 2025.

decrease reflects stable activity levels within our service and marketing operations.

fees legal and accounting

the nine months ended September 30, 2025, our professional fees totaled $1,073,709, compared to $484,990 for the same period in 2024.

The increase was primarily due to costs associated with a consulting agreement related to a potential acquisition, partially offset by

lower legal and registration-related expenses compared to the prior year, which included higher costs associated with our S-3 registration

the three months ended March 31, 2026, our professional fees totaled $167,021, compared to $66,213 for the same period in 2025.

was primarily due to costs associated with a audit fees.

Lease and Maintenance Expense

the nine months ended September 30, 2025, our facility lease and maintenance expenses totalled $190,944, compared to $230,798 for the

same period in 2024.

the three months ended March 31, 2026, our facility lease and maintenance expenses totaled $65,140, compared to $66,741 for the same

period in 2025.

This slight decrease reflects normal fluctuations, with no significant changes in underlying operations.

and Amortization Expense

the nine months ended September 30, 2025, our depreciation and amortization expense was $8,907, compared to $8,907 for the same period

the three months ended March 31, 2026, our depreciation and amortization expense was $2,969, compared to $2,969 for the same period in

There were no significant changes, as the majority of our equipment has already been fully depreciated.

in Derivative Liability

the nine months ended September 30, 2025 and 2024, we recorded derivative liabilities of $924,588 and $0, respectively.

the three months ended March 31, 2026 and 2025, we recorded derivative liabilities of $721,678 and $493,308, respectively.

in derivative liability was primarily due to the issuance of new convertible instruments and mark-to-market adjustments resulting from

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These fair value remeasurements are required each reporting period in accordance with ASC

in FV of warrant liability

the three months ended March 31, 2026 and 2025, we had $3,100 and $17,837 loss on warrant liability related to Equity Line of Credit

Agreement entered December 5, 2024.

the three months ended March 31, 2026, interest income from Florya associated with long-term financing receivable totaled $0 compared

to $14,050 for the same period in 2025 (Restated).

income included in other income consists primarily of interest earned on the Company’s convertible note receivable.

three months ended March 31, 2026, the Company recognized $64,110 of interest income related to the accrual of interest under the terms

of the convertible note agreement.

income includes a gain of $584,613 resulting from the remeasurement of the Company’s investment in the Filled Converge convertible

note to its estimated fair value of $435,053, recognition of forgiveness of debt of $85,558 and interest income of convertible note as

of March 31, 2026, compared to 21,413 as of March 31, 2025.

and Finance Fees

the nine months ended September 30, 2025, interest and finance fees totaled $2,399,193, compared to $902,002 for the same period in 2024.

the three months ended March 31, 2026, interest and finance fees totaled $515,128, compared to $348,186 for the same period in 2025.

The increase was primarily due to two larger interim financings obtained to bridge the Company through the finalization of funding for

the Vermont Renewable Gas Project, address approximately $1.7 million in accounts receivable, and support the completion of the S-3 registration,

as well as certain applied default amounts.

the nine months ended September 30, 2025, our net loss was $3,522,342, compared to a net loss of $3,550,669 for the same period in 2024.

The results remained relatively steady year-over-year, primarily reflecting higher-margin revenue from the Heat Recovery Solutions (HRS)

segment—driven by equipment and refurbished system sales—as well as stable contributions from CETY Renewables supporting

the Vermont Renewable Gas Project.

Additionally, reduced activity in the lower-margin China natural gas business contributed to maintaining

a stable overall financial performance.

the Vermont Renewable Gas Project and monetizing HRS projects.

the three months ended March 31, 2026, our net loss was $662,200, compared to a net loss of $660,056 for the same period in 2025 (Restated).

The increase in net loss was primarily attributable to the absence of higher-margin sales from our Heat Recovery Solutions (“HRS”)

segment, a shift in revenue mix toward our lower-margin China natural gas business, changes in Fv convertible, and lower gross margins

during the period, and interest and financing fee variations.

Although operating expenses declined due to reduced personnel costs associated

with our Vermont Renewable Gas (“VRG”) projects as they progressed through the final permitting phase, these savings were

not sufficient to offset the decline in gross profit.

and Capital Resources

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Consolidated Statements of Cash Flows

the nine months ended September 30,

cash (used in) operating activities

$ (6,218,085 )

$ (2,788,608 )

cash provided by investing activities

cash provided by financing activities

Currency Transaction

increase in cash and cash equivalents

the three months ended March 31,

Net cash (used in) operating activities

Net cash (used in) investing activities

Net cash provided by financing activities

Foreign Currency Transaction

Net increase in cash and cash equivalents

cash used in operating activities was $833,538 for the three months ended March 31, 2026, compared to $776,047 for the same period in

The increase in cash used in operating activities was primarily attributable to the Company’s operating loss and increases

in inventory, interest receivable, and other assets.

These uses of cash were partially offset by non-cash items, including amortization

of debt discount and the fair value gain recognized on the Company’s note receivable, as well as increases in accounts payable,

accrued interest, customer deposits, and accrued expenses.

cash used in investing activities was $702,746 for the three months ended March 31, 2026, compared to $2,932 for the same period in 2025.

The increase in cash used in investing activities was primarily attributable to the Company’s $700,000 investment in a note receivable

and a $2,746 investment in a long-term investment during the current period.

cash provided by financing activities was $975,557 for the three months ended March 31, 2026, compared to $759,002 for the same period

The increase was primarily attributable to higher net proceeds from notes payable and lines of credit, partially offset by repayments

of outstanding borrowings during the period.

Requirements for Long-Term Obligations

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assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

accounting estimates include the valuation of the Company’s convertible note receivable and derivative liabilities, both of which

are measured at fair value using valuation techniques that incorporate significant unobservable inputs.

Management, with the assistance

of independent valuation specialists, exercises significant judgment in selecting key assumptions, including expected stock price volatility,

risk-free interest rates, expected terms, stock prices, discount rates, and probability-weighted outcomes.

Changes in these assumptions

could materially affect the reported fair values of these instruments and the corresponding gains or losses recognized in the Company’s

condensed consolidated financial statements.

regularly evaluate the accounting policies and estimates that we use to prepare our financial statements.

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circumstances.

Actual results could differ from those estimates made by management.

Company recognizes revenue under ASU No.

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a final payment of 10%.

As of September 30, 2025 and December 31, 2024 we had $33,000 and 33,000 of deferred revenue, which is expected

to be recognized in the fourth quarter of year 2025.

from time to time we require upfront deposits from our customers based on the contract.

As of September 30, 2025, and December 31, 2024,

we had outstanding customer deposits of $197,220 and $30,061 respectively.

from fair value or equity method to consolidation

July 2022, JHJ and other three shareholders agreed to form and make total capital contribution of RMB 20 million ($2.81 million) with

latest contribution due date in February 2066 into Sichuan Hongzuo Shuya Energy Limited (“Shuya”), JHK owns 20% of Shuya.

In August 2022, JHJ purchased 100% ownership of Sichuan Shunengwei Energy Technology Limited (“SSET”) for $0, who owns 29%

Shunengwei is a holding company and did not have any operations nor made any capital contribution into Shuya as of the ownership

purchase date by JHJ;

right after the ownership purchase of SSET, JHJ ultimately owns 49% of Shuya.

was set up as the operating entity for pipeline natural gas (PNG) and compressed natural gas (CNG) trading business, while the other

two shareholders of Shuya have large supply relationships.

the year ended December 31, 2022, the Company has determined that Shuya was not a VIE and has evaluated its consolidation analysis under

the voting interest model.

Because the Company does not own greater than 50% of the outstanding voting shares, either directly or indirectly,

it has accounted for its investment in Shuya under the equity method of accounting.

Under this method, the investor (“JHJ”)

recognizes its share of the profits and losses of the investee (“Shuya”) in the periods when these profits and losses are

also reflected in the accounts of the investee.

Any profit or loss recognized by the investing entity appears in its income statement.

Also, any recognized profit increases the investment recorded by the investing entity, while a recognized loss decreases the investment.

made a investment of RMB 3.91 million ($0.55 million) into Shuya during the 12 months ended December 31, 2022 recorded in accordance

with ASC 323.

Shuya had a net loss of approximately $10,750 during the year ending December 31, 2022, of which approximately $5,000 was

allocated to the company, reducing the investment by that amount.

effective January 1, 2023, JHJ, SSET and Chengdu Xiangyueheng Enterprise Management Co., Ltd (“Xiangyueheng), who is the 10% shareholder

of Shuya, entered a Three-Parties Consistent Action Agreement, wherein these three shareholders (or three parties) will guarantee that

the voting rights will be expressed in the same way at the shareholders’ meeting of Shuya to consolidate the controlling position

of the three parties in Shuya.

The three parties agree that within the validity period of this agreement, before the party intends to

propose the motions to the shareholders or the board of directors on the major matters related to the voting rights of the shareholders

or the board of directors, the three parties internally will discuss, negotiate and coordinate the motion topics for consistency;

the event of disagreement, the opinions of JHJ shall prevail.

a result of Consistent Action Agreement, the Company re-analyzed and determined that Shuya is the variable interest entity (“VIE”)

of JHJ because 1) the equity investors at risk, as a group, lack the characteristics of a controlling financial interest, and 2) Shuya

is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with

disproportionately few voting rights.

Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate

that VIE, if the reporting entity has both of the following characteristics:

(a) the power to direct the activities of the VIE that most

significantly affect the VIE’s economic performance;

and (b) the obligation to absorb losses, or the right to receive benefits,

that could potentially be significant to the VIE.

The Company concluded JHJ is deemed the primary beneficiary of the VIE.

the Company consolidates Shuya effective on January 1, 2023.

change of control interest was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification,

referred to as ASC, 805, Business Combinations.

The management determined that the Company was the acquiror for financial accounting

In identifying the Company as the accounting acquiror, the companies considered the structure of the transaction and other

actions contemplated by the Three-Parties Consistent Action Agreement, relative outstanding share ownership and market values, the composition

of the combined company’s board of directors, the relative size of Shuya, and the designation of certain senior management positions

of the combined company.

accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated

the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the Acquisition

The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill.

Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets

with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually.

All intangible assets

and goodwill will be tested for impairment when certain indicators are present.

Determining the fair value of assets acquired and liabilities

assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of

future revenues and cash flows, discount rates, and selection of comparable companies.

The valuation of purchase considerations was based

on preliminary estimates that management believes are reasonable under the circumstances.

the Consistent Action Agreement did not quantify any considerations to gain the control, the deemed consideration paid is the fair value

of 51% non-controlling interest as of January 1, 2023.

The following table summarizes the fair value of the consideration paid and the

fair value of assets acquired, and liabilities assumed on January 1, 2023, the acquisition date.

value of non-controlling interests

value of previously held equity investment

value of 100% of identifiable net assets

amounts of identifiable assets acquired and liabilities assumed (preliminary):

and cash equivalents

and other receivables

and other payables

and wages payables

identifiable net assets

ASC-805-10-50-2, initial consolidation of an investee previously reported using fair value or the equity method should be accounted for

prospectively as of the date the entity obtained a controlling financial interest.

Therefore, the Company should provide pro forma information

as if the consolidation had occurred as of the beginning of each of the current and prior comparative reporting period per ASC 805-10-50-2(h)

and Rule 3-05 of Regulation S-X.

January 1, 2024, and effective on the same date, JHJ, SSET and Xiangyueheng entered into the Agreement on the Termination of the Concerted

Action Agreement (the “Termination Agreement”), pursuant to which the parties released each other from any and all obligations

under the CAA.

Due to the Termination Agreement, the Company now holds less than 50% of the voting rights in Shuya.

The Company analyzed

whether Shuya should be consolidated under ASC 810 and determined Shuya is no longer required to be consolidated on January 1, 2024 after

the execution of the Termination Agreement.

Accordingly, the Company will not consolidate Shuya into its consolidated financial statements

on or after January 1, 2024.

Additionally,

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upon adoption.

Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , effective January 1, 2026.

adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Company is currently evaluating the impact of recently issued accounting standards that have not yet been adopted, including ASU 2024-03,

Disaggregation of Income Statement Expenses , ASU 2025-11, Accounting for Environmental Credit Programs , and ASU 2025-12,

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity .

The Company does not currently expect the

adoption of these standards to have a material impact on its condensed consolidated financial statements.

Quantitative and Qualitative Disclosure about Market Risk.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis