What changed in this filing

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Item 9A. Controls and Procedures

2026-04-16 compared with 2025-08-04 · 1252 added, 1256 removed, 1526 unchanged (62% of the section changed)

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This Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.

Material Weaknesses in Internal Control Over Financial Reporting

In preparation of its consolidated financial statements to meet the requirements applicable to its current status as a publicly traded company, ConnectM and its independent registered public accounting firm identified material weaknesses in its internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

On April 8, 2025, the Company concluded there were errors that were material to the Company’s previously issued interim consolidated financial statements for the quarterly period ended September 30, 2024 as included in the Company’s Quarterly Report on Form 10-Q for such period (the “Prior Filing”) and the Prior Filing needed to be restated.

The impact of restatement on the consolidated financial statements for the quarterly period ended September 30, 2024 is included in this 10-K for the year ended December 31, 2024, within note 2 to the consolidated financial statements.

The first material weakness identified related to a deficiency in ConnectM’s controls over complex accounting topics centered around the appropriate treatment of specific incremental costs that were directly attributable to the transaction with MCAC and the forward purchase agreement.

Specifically, ConnectM’s accounting and internal control infrastructure did not allow for adequate review processes over this complex accounting topic due to lack of sufficient resources.

Due to this material weakness, material errors were identified and corrected in ConnectM’s audited financial statements for the year ended December 31, 2024.

The second material weakness identified related to a deficiency in ConnectM’s controls over revenue recognition centered around the appropriate timing of the recognition of its solar system services for which ConnectM recognized revenue when it had not fully satisfied its performance obligation.

Specifically, ConnectM’s accounting and internal control infrastructure did not allow for the proper assessment of the timing of revenue recognition for its solar system services due to lack of sufficient resources.

Due to this material weakness, material errors were identified and corrected in ConnectM’s audited financial statements for the year ended December 31, 2024.

There are other material weaknesses identified relating to complex accounting relating to debt and derivatives, contingent consideration, deferred offering costs, management not identifying impaired intangible assets, and to the Company not being able to timely issue their financial statements.

These material weaknesses are due to inadequate staffing at the Company.

An additional material weakness was identified due to the failure to get proper approval from the Board for related party transactions.

Remediation Plan

In light of these facts, our management, including our Chief Executive Officer, is in the process of implementing processes and controls and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting described above, the consolidated financial statements for the period covered by and included in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with US GAAP.

To address our material weakness, we are improving our processes of reviewing financial statements, increasing our communication with third-party service providers around transactions that the Company has entered, and implementing additional procedures to ensure that the review of the Company’s financial statements is supported by sufficient documentation to determine accuracy.

We will not be able to fully remediate these material weaknesses until these steps have been completed and the controls have been operating effectively for a sufficient period of time.

Remediation of Material Weakness in Internal Controls

In connection with the preparation and audit of our consolidated financial statements as of and for the years ended December 31, 2025 and 2024, material weaknesses were identified in our internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.

The following material weaknesses were identified:

● Revenue Recognition and Financial Close Processes – Deficiencies in the application of revenue recognition policies, including the Right to Invoice Practical Expedient under ASC 606-10-55-18 for Managed Service Agreement contracts and the timing of revenue recognition for solar installations prior to completion of the applicable performance obligation;

inability to timely close books, contributing to an elevated volume of audit adjustments across subsidiary trial balances.

● Complex Financial Instruments and Valuations – Deficiencies in the identification and accounting for derivative instruments embedded in debt conversion agreements with multiple counterparties (one cause of the restatement of the third quarter 2024 financial statements);

deficiencies in the accounting for the forward purchase agreement, the valuation of convertible notes under the fair value option, the classification of current versus non-current debt, and the measurement of contingent consideration related to the Delivery Circle acquisition.

● Acquisitions, Business Combinations, and Related Transactions – Deficiencies in the accounting for the de-SPAC transaction completed in July 2024 (accounted for as a reverse recapitalization) and the acquisitions of Delivery Circle and Green Energy Gains;

failure to identify the Green Energy Gains acquisition as a related party transaction prior to Board approval;

deficiencies in the accounting for deferred offering costs associated with the business combination.

● Impairment Testing and Balance Sheet Presentation – Deficiencies in the timely identification of triggering events and determination of impairment for intangible assets and goodwill at Solar Energy Systems (Florida Solar) and Cazeault Solar and Home, for which full impairment was recorded;

recurring deficiencies in the classification of current versus non-current liabilities on the balance sheet.

● Control Environment and Internal Control Framework –

o The Company has not fully implemented a comprehensive internal control framework in accordance with the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework (COSO 2013), resulting in pervasive deficiencies across the control environment, risk assessment, control activities, information and communication, and monitoring components.

The absence of a formally adopted and operationalized control framework has limited the Company’s ability to systematically identify, assess, and respond to financial reporting risks on a timely basis.

o Additionally, the Company lacks a formal, documented process for the independent review of significant accounting estimates by qualified personnel at each interim and annual reporting date, increasing the risk that estimates are not subjected to sufficient scrutiny prior to inclusion in the financial statements.

● IT General Controls, Systems Infrastructure, and Inventory Management –

o The Company’s financial reporting processes are significantly dependent on QuickBooks, a platform that lacks the robust reporting capabilities, segregation of duties controls, and user access management features required for a public company reporting environment.

The manual and error-prone nature of the financial close process, compounded by inadequate IT general controls, has contributed to delays and an elevated risk of undetected errors in the financial statements.

o Furthermore, the Company currently maintains inventory records in Excel spreadsheets rather than within an integrated accounting or inventory management system, raising the risk of errors, data inconsistencies, and the absence of a sufficient audit trail, and creating challenges in ensuring completeness, accuracy, and timely reconciliation of inventory balances.

● Contract Management and Document Integrity –

o The Company lacks a centralized contract repository or standardized checklist for capturing key contract terms and their accounting implications, creating risk of unrecorded or incorrectly recorded transactions.

o In addition, the Company identified certain unsigned key documents, including conversion notices, agreements, and certificates of completion, which impacts the enforceability of such agreements and raises concerns over the completeness and accuracy of the related accounting records.

Management expects to address these deficiencies by implementing remediation measures, including those already taken to date, which include the following:

● Engaged an expert technical accounting advisor to prepare formal accounting memoranda supporting the Company’s revenue recognition policies and other complex accounting treatments in accordance with the FASB Accounting Standards Codification, including documentation of significant estimates, judgments, and transaction-specific accounting conclusions;

● Engaged an external valuation specialist for all derivative instruments, notes conversion valuations, forward purchase agreement valuations, and contingent consideration remeasurements;

● Designed and implemented internal controls over Treasury Management requiring systematic evaluation of all new debt instruments for embedded derivative features at inception;

● Designed and implemented internal controls within the Record-to-Report cycle for triggering event identification and impairment testing, supported by enhanced monthly flux analysis and segment-level profitability reporting;

● Overhauled the books closure process, including implementation of a fourth-business-day close target, prior-period trial balance lock-out, a responsibility assignment matrix for close task ownership, daily standup calls with controllers and the consolidation team, and a quarterly books clean-up cycle;

● Establishing an M&A Steering Committee with a formalized due diligence framework incorporating explicit related-party identification procedures, a post-transaction integration playbook, and a requirement for independent auditor sign-off on all purchase price allocations and contingent consideration remeasurements before recording to the general ledger;

● Significantly expanded the Company’s financial reporting capacity by engaging a Consultant Financial Reporting Manager with public company accounting and SEC reporting experience, hiring SEC reporting specialists, onboarding a tax consultant, and establishing a dedicated Auditor Coordinator role.

● The Company will establish a centralized contract repository and implement standardized checklists to identify key contract terms and ensure appropriate accounting treatment.

● The Company will enhance its IT control environment by upgrading systems and strengthening user access controls, and will formalize and streamline the financial close process to reduce manual intervention and risk of error.

● The Company will implement a formal process requiring independent review of significant accounting estimates by qualified personnel at each reporting date.

● The Company will transition inventory records to an integrated accounting or inventory management system and implement controls to ensure completeness, accuracy, and timely reconciliation of inventory balances.

● The Company will enforce formal documentation and approval procedures to ensure all key agreements and supporting documents are properly executed, maintained, and accessible.

We believe that the actions described above, when fully implemented and sustained over sufficient consecutive reporting periods, will remediate the material weaknesses described above.

However, certain of these remediation measures are ongoing, and we cannot provide assurance that all measures will prove to be sufficient or that additional measures will not be required.

Inherent Limitations on Effectiveness of Controls

While management is working to remediate the material weaknesses, there is no assurance that these remediation efforts, when economically feasible and sustainable, will successfully remediate the identified material weaknesses.

While management is working to remediate the material weaknesses described above, there is no assurance that these remediation efforts, when economically feasible and sustainable, will successfully remediate the identified material weaknesses.

If we are unable to establish and maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us and the value of our common stock could be materially and adversely affected and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Effective process and controls over financial reporting is necessary for us to provide reliable and timely financial reports and are designed to reasonably detect and prevent fraud.

Effective internal control over financial reporting is necessary for us to provide reliable and timely financial reports and is designed to reasonably detect and prevent fraud.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.

For as long as we are a “smaller reporting company” under the U.S.

securities laws, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.

securities laws, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

An independent assessment of the effectiveness of internal control over financial reporting could detect problems that our management’s assessment might not.

Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.

Moreover, we do not expect that process and controls over financial reporting will prevent all errors and all fraud.

Moreover, we do not expect that internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must

be considered relative to their costs.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

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Changes in Internal Control over Financial Reporting

In light of the material weaknesses described above, we are taking the actions described above to remediate such material weaknesses.

Except as described above, there was not any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other than the changes associated with the material weaknesses and remediation actions noted above, there have been no changes to our internal control over financial reporting that occurred during the year ended December 31, 2025.

Other Information.

Securities trading plans of Directors and Executive Officers.

During the fiscal fourth quarter of 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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listing standards.

A copy of the insider trading policy is filed as Exhibit [19.1] to this Form 10K.

A copy of the insider trading policy is filed as Exhibit 19.1 to this Report on Form 10-K.

Code of Ethics

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Mahesh Choudhury

Vice President, US Operations

Principal Financial Officer & Vice President, U.S.

Kevin Stateham

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Information about our Executive Officers and Directors

Bhaskar Panigrahi is a nominee for the Combined Company’s board of directors and serves as the Chairman of ConnectM and has been Chief Executive Officer of ConnectM since November 2015.

Bhaskar Panigrahi is a member of our board of directors and serves as the Chairman of ConnectM and has been Chief Executive Officer of ConnectM since November 2015.

Panigrahi has a rich experience of more than 25 years as a serial entrepreneur and investor.

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Panigrahi also served as the Chief Executive Officer of Unique Computing Solutions and e-Solutions Integrator from 2000 to 2002, an internet technology and services firm.

Unique Computing Solutions was named twice on Inc.

500 List of fastest growing private companies, Deloitte Regional Fast 50 and National Fast 500 rosters.

Panigrahi invested in and promoted many other technology companies, including 1Efficiency (Energy Monitor in Commercial Buildings), Mascot Networks (product and solutions provider in education space) and Trading Research Design (financial risk management solution provider).

Panigrahi holds a BS in Computer Science from National Institute of Technology, Suratkal, India.

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Panigrahi has the qualifications to be a member of our board of directors because of his extensive experience being chairman and board of directors in multiple companies in the past and his leadership ability to set direction, vision, and leadership with guidance from other directors.

Bala Padmakumar is a nominee for the Combined Company’s board of directors and will serve as Vice Chairman of ConnectM following the Business Combination.

Bala Padmakumar is a member of our board of directors and serves as Vice Chairman of ConnectM.

In addition to his role as director, Mr.

Padmakumar will focus on strategic financing, investor communications and strategic roadmap and product development.

Padmakumar has been MCAC’s Chief Executive Officer and the Chairman of the MCAC board of directors since September 2021.

Padmakumar focuses on strategic financing, investor communications and strategic roadmap and product development.

Padmakumar had been MCAC’s Chief Executive Officer and the Chairman of the MCAC board of directors since September 2021.

Padmakumar is a broad based entrepreneur and technologist with a strong background in strategic partnerships, product and business development, technology and operations, private equity, and venture capital environments.

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Padmakumar was the Chief Executive Officer at Amperics, Inc., a developer and vendor of high energy density ultracap hybrid storage systems.

Padmakumar also has extensive experience in the clean energy

sectors, having been an advisor to Lionrock Batteries Ltd., which creates flexible batteries and high performance separator technology from 2019 to 2024, an advisor to the board of directors and CEO of Hyperscale Data Center Company, a company focused on energy usage efficiency in hyperscale data centers from 2018 to 2020, and an advisor to the chairman of Advanced Systems Automation Limited in Singapore, where he advised on issues surrounding urban transportation, High Energy Density Li Ion battery (NMC technology) and 3D printing technology from 2017 to 2019.

Padmakumar also has broad experience advising on capital raising and corporate strategy, serving as a mentor to OneValley Inc., a global entrepreneurship platform for individuals, startups, and corporations seeking innovation and accelerated growth, and as an advisor to several early-stage companies from audio technologies to SaaS products.

Padmakumar also has extensive experience in the clean energy sectors, having been an advisor to Lionrock Batteries Ltd., which creates flexible batteries and high performance separator technology from 2019 to 2024, an advisor to the board of directors and CEO of Hyperscale Data Center Company, a company focused on energy usage efficiency in hyperscale data centers from 2018 to 2020, and an advisor to the chairman of Advanced Systems Automation Limited in Singapore, where he advised on issues surrounding urban transportation, High Energy Density Li Ion battery (NMC technology) and 3D printing technology from 2017 to 2019.

Padmakumar has a Bachelor’s Degree in Technology from the University of Madras in Chemical Engineering and a Master of Science Degree in Chemical Engineering from Stanford University.

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Girish Subramanya serves as the Global Chief Technology officer and has served as the head of ConnectM’s India operations since June 2018.

Subramanya has served in served positions at ConnectM since November 2007.

Subramanya has served in positions at ConnectM since November 2007.

Subramanya is a technology enthusiast and an entrepreneur who has led several product launches in his career, with many of them from concept to market ready solution for industries including finance, e-commerce and enterprise segments.

For over a decade Mr.

From 1995 to 2007 Mr.

Subramanya held product management roles at i2 Technologies, a full-service supply chain management company providing consulting, technology, and managed services, Integral Systems, a currency technology partner of financial institutions, and Coreobjects, an end-to-end software development company.

Subramanya co-founded ConnectM to enable large enterprises and product original equipment manufacturers (OEMs) to manage their distributed assets & operations effectively and improve efficiencies using Internet of Things (IoT) technologies along with value creation over time for the businesses they run and for their end customers.

Subramanya conceived and built a core platform & technology stack in the early stages of ConnectM’s growth that significantly contributed in differentiating ConnectM among its peers and positioned itself as a PaaS (Platform as a Service) company that fueled traction in the market and helped acquiring a marquee client base.

During 2020, Mr.

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Subramanya holds a Master of Computer Applications from the Department of Electronics and Accreditation of Computer Courses (DOEACC), New Delhi, India.

Mahesh Choudhury heads ConnectM’s internal operations including supply chain, information technology (IT), and general administration and has done so since January 2017, including overseeing the finance and information technology functions.

Mahesh Choudhury has served as our Principal Financial Officer & Vice President, U.S.

Operations since August 2025 and heads ConnectM’s internal operations including supply chain, information technology (IT), and general administration and has done so since January 2017, including overseeing the finance and information technology functions.

Choudhury has over 25 years of experience in various operational management rolls.

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Non-Employee Directors

Kathy Cuocolo is a nominee for the Combined Company’s board of directors and has served as a member of the MCAC Board since 2021.

Kathy Cuocolo is member of our board of directors and previously served as a member of the MCAC Board since 2021.

Cuocolo is a versatile executive and director with demonstrated success in developing and managing financial services operations on a global basis.

Cuocolo is currently a director and Audit Chair of Greenbacker Renewable Energy Company LLC and a director at Syntax ETF Trust.

Her prior directorships include President and Director of The China Fund, Inc.,

which invests primarily in private placements in mainland China, Chairperson of Select Sector ETF Trust, and a director of Guardian Life family of funds.

Her prior directorships include President and Director of The China Fund, Inc., which invests primarily in private placements in mainland China, Chairperson of Select Sector ETF Trust, and a director of Guardian Life family of funds.

From 2014 through March 2020, Ms.

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Cuocolo was a member of the corporations’ Executive Operating Committee responsible for all aspects of business strategy.

During her 22 years at State Street, Ms.

Cuocolo led the firm to become the largest fund administrator in the U.S., with over $1.2 trillion in assets.

Prior to State Street, Ms.

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Cuocolo has the qualifications to be a member of our Board of Directors because of her extensive experience in cleantech, finance/audit, and as independent director in other public companies.

Stephen Markscheid is a nominee the Combined Company’s board of directors and has served as member of the MCAC Board since 2022.

Markscheid is currently the Managing Partner of Aerion Capital and currently serves as a director of Fanhua, Inc.

FANH), JinkoSolar Holding Co., Ltd.

JKS), Zhongjin Technology Services Group Company Limited (HKEX:

Stock Code 08295), UGE International Ltd.

UGE.V), and Four Leaf Acquisition Corporation (Nasdaq:

Stephen Markscheid is a member of our board of directors and previously served as member of the MCAC Board since 2022.

Markscheid is currently the Managing Partner of Aerion Capital and currently serves as a director of Fanhua, Inc., JinkoSolar Holding Co., Ltd., Zhongjin Technology Services Group Company Limited, UGE International Ltd., and Four Leaf Acquisition Corporation.

In addition, Mr.

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Markscheid earned a B.A.

in East Asian Studies from Princeton University in 1976, an M.A.

in East Asian Studies from Princeton

University in 1976, an M.A.

in international affairs from Johns Hopkins University in 1980, and an MBA from Columbia University in 1991, where he was class valedictorian.

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Markscheid has the qualifications to be a member of our Board of Directors because of his extensive experience in cleantech and as independent director in other public companies.

Gautam Barua is a nominee for the Combined Company’s board of directors.

Gautam Barua is a member of our board of directors.

Barua is the founder of Aclaria Partners, which he founded in December 2004 and is currently the President.

Barua has distinctive expertise in originating and profitably investing in Environmental, Social and Governance (ESG) opportunities, with a consistently successful and pioneering career in climate and sustainability spanning more than two decades.

Barua has led $80M of profitable clean water and energy deals, founded a market-leading clean energy firm, and advised major corporations on sustainability.

Barua first engaged on ESG in the 1990s, contributing to Nobel Prize-winning work on climate change and carbon sequestration while also working for Yale University’s investments office.

Barua has served in advisory, new business, and mergers and acquisitions roles at McKinsey and Morgan Stanley from 2013 to 2018;

held an appointment as California Deputy State Controller from 2003 to 2004, helping spark creation of a $1.5B cleantech investment program at CalPERS, the largest pension fund in the United States;

served on boards of sustainability and conservation non-governmental organizations;

and been a Silicon Valley executive.

held an appointment as California Deputy State Controller from 2003 to 2004.

In addition to a Bachelor of Arts cum laude in Economics and Mathematics from Yale University, Mr.

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Family Relationships

There are no family relationships between the Combined Company’s board of directors and any of its executive officers.

There are no family relationships between ConnectM’s board of directors and any of its executive officers.

Board of Directors

Director Independence

Nasdaq listing rules require that a majority of the board of directors of a company listed on Nasdaq be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

The Combined Company’s board of directors has determined that, upon the consummation of the Merger, each of Kathy Cuocolo, Stephen Markscheid and Gautam Barua will be an

independent director under the Nasdaq listing rules and Rule 10A-3 of the Exchange Act.

In making these determinations, the Combined Company’s board of directors considered the current and prior relationships that each non-employee director has with ConnectM and will have with the Combined Company and all other facts and circumstances the Combined Company’s board of directors deemed relevant in determining independence, including the beneficial ownership of our common stock by each non-employee director, and the transactions involving them described in the section titled “ Certain Relationships and Related Transactions .”

ConnectM’s Common Stock is currently quoted on the OTCQX Best Market, which does not require a majority of the board of directors to be composed of “independent directors” under its listing standards.

Nevertheless, ConnectM follows corporate governance practices consistent with those required for companies listed on a national securities exchange, such as Nasdaq or the NYSE American, to promote transparency and strong board oversight.

For purposes of disclosure, the ConnectM board of directors has evaluated the independence of its members under the independence standards set forth in the Nasdaq listing rules and Rule 10A - 3 under the Exchange Act.

Based on this review, the board of directors has determined that each of Kathy Cuocolo, Stephen Markscheid, and Gautam Barua qualifies as an independent director under these standards.

In making these determinations, the board considered each non-employee director’s current and prior relationships with ConnectM and its subsidiaries, beneficial ownership of ConnectM Common Stock, and any transactions involving them described in the section titled “ Certain Relationships and Related Transactions .”

Classified Board of Directors

The Combined Company’s board of directors will be divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.

ConnectM’s Board of Directors is divided into three classes, with only one class of directors being elected each year and each class (except for those directors appointed prior to the Company’s first annual meeting of stockholders) serving a three-year term.

All independent directors currently serve as Class I directors.

Bala Padmakumar serves as a Class II director, and Mr.

Bhaskar Panigrahi serves as a Class III director.

Committees of the Board of Directors

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Audit Committee

An Audit Committee of the Combined Company has been established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Kathy Cuocolo, Stephen Markscheid and Gautam Barua, each of whom are independent directors and are “financially literate” as defined under the Nasdaq listing standards.

An Audit Committee of ConnectM has been established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Kathy Cuocolo, Stephen Markscheid and Gautam Barua, each of whom are independent directors and are “financially literate” as defined under the Nasdaq listing standards.

Kathy Cuocolo serves as chairman of the Audit Committee.

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The Audit Committee’s duties are specified in the Audit Committee Charter that was adopted at the Effective Time.

The Audit Committee oversees the integrity of the Company’s financial statements, the qualifications, independence, and performance of the Company’s independent registered public accounting firm, and the Company’s compliance with legal and regulatory requirements.

The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the work of the Company’s independent auditors and reviews the Company’s internal control over financial reporting and risk management practices.

The Audit Committee also pre-approves audit and non-audit services provided by the independent auditors.

The Board has determined that each member of the Audit Committee is “independent” as defined under applicable SEC and Nasdaq rules, and that at least one member qualifies as an “audit committee financial expert” under SEC regulations.

Compensation Committee

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The functions of the Compensation Committee are set forth in a Compensation Committee Charter that was adopted at the Effective Time.

The Compensation Committee is responsible for reviewing and approving the compensation of the Company’s executive officers, including base salary, annual incentive opportunities, long-term incentive awards, and other benefits.

The committee also oversees the administration of the Company’s equity incentive plans and other compensation-related policies and programs.

The Compensation Committee evaluates executive performance and makes recommendations to the Board regarding the CEO’s compensation.

Each member of the Compensation Committee is “independent” as defined under applicable SEC rules.

Nominating and Corporate Governance Committee

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The Nominating Committee considers as potential members of the board of directors persons identified by its members, management, stockholders, investment bankers and others.

The guidelines for selecting nominees, are specified in the Nominating and Corporate Governance Committee Charter which was adopted at the Effective Time.

The guidelines for selecting nominees, are specified in the Nominating and Corporate Governance Committee Charter which was adopted on October 31, 2025.

The Nominating and Corporate Governance Committee identifies, evaluates, and recommends individuals qualified to serve as directors, oversees the evaluation of the Board and its committees, and develops and recommends corporate governance principles and practices applicable to the Company.

The committee also reviews the structure and composition of the Board and its committees and considers succession planning for the Board and senior management.

Each member of the Nominating and Corporate Governance Committee is “independent” as defined under applicable SEC rules.

Code of Conduct and Ethics

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● Girish Subramanya, who served as Chief Technology Officer;

● Mahesh Choudhury, who served as Vice President, U.S.

● Mahesh Choudhury, who served as Principal Financial Officer & Vice President, U.S.

● Kevin Stateham, who served as Vice President, Sales and Corporate Development.

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Mahesh Choudhury,

Principal Financial Officer & VP, U.S.

Girish Subramanya,

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dollar to Indian rupee (“INR”) of $1.00 to 82.75 INRs as of January 1, 2023.

Certain employee equity issuances are not reflected in the table above because the shares were issued as unregistered, restricted securities rather than registered shares.

On June 23, 2025, the Company issued 400,000 unregistered, restricted shares of common stock to Mahesh Choudhury and 250,000 unregistered, restricted shares of common stock to Kevin Stateham, with grant-date fair values of approximately $92,000 and $57,500, respectively, based on a per-share fair value of $0.23.

On September 8, 2025, the Company issued 175,000 unregistered, restricted shares of common stock to Girish Subramanya, with a grant-date fair value of approximately $3,500, based on a per-share fair value of $0.02.

The aggregate fair value of these issuances was approximately $153,000.

These issuances were approved by the Board of Directors.

Narrative to the Summary Compensation Table

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Option Exercises and Stock Vested

Stock Option Awards

on vesting (#)

Kevin Stateham

Mahesh Choudhury

No other equity-based incentive awards were granted to the named executive officers during 2025, 2024 and 2023.

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The maximum aggregate number of shares of common stock that may be issued or used for reference purposes or with respect to which awards may be granted under the 2023 Plan was initially to be equal to 10% of the number of shares of ConnectM common stock outstanding immediately following the Business Combination, less 473,929 shares of ConnectM common stock subject to awards under the Prior Plan.

This “ Total Share Reserve ” will be increased automatically on January 1 of each year during the term of the 2023 Plan by a number equal to the lesser of (i) 4% of the shares of common stock outstanding on December 31 of the prior year, or (ii) a smaller number of shares as determined by the ConnectM Board.

This “Total Share Reserve” will be increased automatically on January 1 of each year during the term of the 2023 Plan by a number equal to the lesser of (i) 4% of the shares of common stock outstanding on December 31 of the prior year,

or (ii) a smaller number of shares as determined by the ConnectM Board.

As of the date of this Report, the Total Share Reserve is 1,653,831.

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Restricted Stock and Restricted Stock Units

The Committee may grant restricted shares of ConnectM’s common stock (“ Restricted Stock ”) or restricted stock units (“ Restricted Stock Units ”) representing the right to receive, upon vesting and the expiration of any applicable restricted period, one (1) share of common stock for each Restricted Stock Unit or, in the sole discretion of the Committee, the cash value thereof (or any combination thereof).

If a cash payment is made in lieu of delivering shares of common stock, the amount of such payment shall be

equal to the fair market value of the common stock as of the date on which the applicable restricted period lapsed.

(1) share of common stock for each Restricted Stock Unit or, in the sole discretion of the Committee, the cash value thereof (or any combination thereof).

If a cash payment is made in lieu of delivering shares of common stock, the amount of such payment shall be equal to the fair market value of the common stock as of the date on which the applicable restricted period lapsed.

As to Restricted Stock, subject to the other provisions of the 2023 Plan, the holder will generally have the rights and privileges of a stockholder as to such Restricted Stock, including the right to vote such Restricted Stock, but the holder will not have the right to receive dividends on any unvested shares of Restricted Stock.

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(iv) to be purchased from a Participant whose employment is terminated as a result of the Change in Control, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such award been currently exercisable or payable;

or (v) to be terminated ;or to make any other adjustment to the awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change.

or (v) to be terminated;

or to make any other adjustment to the awards then outstanding as the Committee deems necessary or appropriate to reflect such transaction or change.

Nontransferability of Awards

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No award may be granted with a lapse of any vesting obligations earlier than at least one year following the date of grant.

Notwithstanding the foregoing, the Committee may grant up to a maximum of five percent of the aggregate number of shares available for issuance under the 2023 Plan (subject to certain equitable adjustments), without regard to this minimum vesting requirement, and the minimum vesting requirement does not apply to (i) any substitute awards (as defined in the 2023 Plan), (ii) shares delivered in lieu of fully vested cash awards, (iii) awards to directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of shareholders which is at least 50 weeks after the immediately preceding year’s annual meeting, and (iv) the Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of a Participant’s retirement, death or disability or a Change in Control, in the terms of the award or otherwise.

(ii) shares delivered in lieu of fully vested cash awards, (iii) awards to directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of shareholders which is at least 50 weeks after the immediately preceding year’s annual meeting, and (iv) the Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of a Participant’s retirement, death or disability or a Change in Control, in the terms of the award or otherwise.

Awards under the 2023 Plan are subject to recovery or “clawback” by ConnectM pursuant to any clawback policy ConnectM may have in effect from time to time.

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The grant of an incentive stock option is not a taxable event for the grantee or for ConnectM.

A grantee will not recognize taxable income upon exercise of an incentive stock option (except to the extent the alternative minimum tax applies), and any gain realized upon a disposition of ConnectM’s common stock received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain if the grantee holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the “ holding period requirement ”).

of grant and for one year after the date of exercise (the “holding period requirement”).

ConnectM will not be entitled to any business expense deduction with respect to the exercise of an incentive stock option, except as discussed below.

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Director and Officer Indemnification Agreements

We have entered into employment agreements whereby we will agree to indemnify the Chief Executive Officer and Chief Financial Officer to the fullest extent permitted by law, for all amounts (including, without limitation, judgments, fines, settlement payments, expenses and reasonable out of pocket attorneys’ fees) incurred or paid by the Chief Executive Officer and Chief Financial Officer in connection with any action, suit, investigation or proceeding, or threatened action, suit, investigation or proceeding, arising out of or relating to the performance by the Chief Executive Officer and Chief Financial Officer of services for, or the acting by the Chief Executive Officer and Chief Financial Officer as a director, officer or executive of, the Company, or any subsidiary of the Company.

out of or relating to the performance by the Chief Executive Officer and Chief Financial Officer of services for, or the acting by the Chief Executive Officer and Chief Financial Officer as a director, officer or executive of, the Company, or any subsidiary of the Company.

Any fees or other necessary expenses incurred by the Chief Executive Officer and Chief Financial Officer in defending any such action, suit, investigation or proceeding shall be paid by the Company in advance, subject to the Company’s right to seek repayment from the Chief Executive Officer and Chief Financial Officer if a determination is made that the Chief Executive Officer and Chief Financial Officer were not entitled to indemnification.

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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information regarding beneficial ownership of our capital stock as of December 31, 2024 by:

The following table sets forth information regarding beneficial ownership of our capital stock as of the date of this filing by:

● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our Common Stock;

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Unless otherwise indicated in a footnote to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.

Applicable percentages are based on 29,093,289 shares of our Common Stock outstanding on December 31, 2024, adjusted as required by rules promulgated by the SEC.

Applicable percentages are based on 170,368,082 shares of our Common Stock outstanding as of the date of filing.

Unless otherwise indicated, the address for the following stockholders is care of:

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Five Percent Holders of ConnectM:

Bala Padmakumar(2)

Bhaskar Panigrahi(5)

Arumilli, LLC

Win-Light Capital, Co.

Geo Impex LLC (4)

Laramie Plains Holdings LLC (4) (5)

(1) Unless otherwise noted, the business address of each of the following individuals is c/o ConnectM Technology Solutions, Inc., 2 Mount Royal Ave., Suite 550, Marlborough, MA 01752.

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The post-business combination shares include 3,790,000 shares issuable pursuant to warrants that will be exercisable following the business combination.

(3) Consists of 24,910 shares issuable pursuant to stock options exercisable within 60 days of the date hereof.

(4) Includes 77,620 shares issuable pursuant to stock options exercisable within 60 days of the date hereof.

(3) Consists of (i) 3,585,660 shares held by Avanti Holdings LLC, (ii) 254,647 shares held by Mr.

Panigrahi and (iii) 127,838 shares held by Southwood Partners LP.

Panigrahi is a controlling equityholder of Avanti Holdings LLC and Southwood Partners LP.

Panigrahi is a controlling equity holder of Avanti Holdings LLC and Southwood Partners LP.

Therefore, Mr.

Panigrahi may be deemed to have voting power and dispositive power over the shares held by Avanti Holdings LLC and Southwood Partners LP.

(4) Based on information provided by the Company’s transfer agent and reflected in its official shareholder records.

(5) 14,000,000 of the shares issued in connection with the acquisition of Sun Solar LLC, is held by Laramie Plains Holding LLC, an entity owned and controlled by Caleb Arthur, the Chief Executive Officer and founder of Sun Solar LLC.

Arthur has sole voting and dispositive power over the shares held by Laramie Plains Holding LLC.

Changes in Control

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All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties.

Such transactions will require prior approval by our audit committee and a majority of our disinterested independent directors, or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel.

independent legal counsel.

We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

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These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

To further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors or initial stockholders, unless we have obtained (i) an opinion from an independent investment banking firm, or other firm that commonly provides valuation opinions, that the business combination is fair to our

stockholders from a financial point of view and (ii) the approval of a majority of our disinterested and independent directors (if we have any at that time).

Furthermore, in no event will any of our initial stockholders, officers, directors or their respective affiliates be paid any finder’s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination.

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In connection with the closing of the Business Combination, the Company assumed unsecured promissory notes totaling approximately $555,000 that are non-interest bearing and due on demand and advances totaling approximately $132,000 that are non-interest bearing and due on demand with the Sponsor of MCAC.

During September 2024, the Company entered into a note conversion agreement with the Sponsor of MCAC in which the Company converted the outstanding principal on unsecured promissory notes and certain other liabilities owed to the note holders into shares of the Company’s common stock at a conversion price of $2.00 per share with a one-time share reset adjustment (see Note 14), subject to shareholder approval and a maximum aggregate ownership amount of 19.99% for each individual lender.

In connection with these agreements, approximately $555,000 of unsecured promissory notes and approximately $132,000 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 343,248 shares of the Company’s common stock (see Note 12).

In connection with the conversion agreement, the Sponsor of MCAC received a one-time share reset adjustment that were subsequently settled during the quarter ended March 31, 2025 through the issuance of 205,949 shares of the Company’s common stock (see Note 14).

During September 2024, the Company entered into a note conversion agreement with the Sponsor of MCAC in which the Company converted the outstanding principal on unsecured promissory notes and certain other liabilities owed to the note holders into shares of the Company’s common stock at a conversion price of $2.00 per share with a one-time share reset adjustment, subject to shareholder approval and a maximum aggregate ownership amount of 19.99% for each individual lender.

In connection with the conversion agreement, the Sponsor of MCAC received a one-time share reset adjustment that was settled during the quarter ended March 31, 2025 through the issuance of 205,949 shares of the Company’s common stock (see Note 4).

As of December 31, 2024, the fair value of the derivative liabilities associated with the reset adjustment was approximately $158,000 and was included as a component of derivative liabilities on the accompanying consolidated balance sheets.

As of June 30, 2025, the derivative liabilities associated with the reset adjustment were settled in full.

For the year ended December 31, 2025, the Company recorded a change in fair value on these derivative liabilities of $30,000 which was included as a component of change in fair value of derivative liabilities on the accompanying consolidated statements of operations and comprehensive loss.

Related Party Investors

Immediately following the note conversion agreements in September 2024 with secured promissory note holders in which the Company converted the outstanding principal on the secured promissory notes, including accrued and unpaid interest, and certain other liabilities owed to the note holders into shares of the Company’s common stock (see Note 11), the ownership percentage of the Company’s common stock of two individual lenders individually exceeded 5.0%, triggering a related party relationship.

These two lenders are collectively referred to as the Related Party Investors.

In connection with the conversion agreements, each Related Party Investor received a one-time share reset adjustment that were subsequently settled during the quarter ended March 31, 2025 through the issuance of 1,460,130 and 795,675 shares of the Company’s common stock (see Note 14).

As of December 31, 2024, the fair value of the derivative liabilities associated with the reset adjustment granted to each Related Party Investor was approximately $1,146,000 and $624,000 and were included as a component of derivative liabilities on the accompanying consolidated balance sheets.

For the year ended December 31, 2024, the Company recorded a change

in fair value on these derivative liabilities of $192,000 and $104,000, which were included as a component of change in fair value of derivative liabilities on the accompanying consolidated statements of operations and comprehensive loss.

The Related Party Investors collectively own 100% of an entity that has controlling interest in four customers within the managed solutions operating segment (the “Related Party Managed Solutions Customers”).

The Company acquired one of these customers, GEG, in October 2024 from the entity owned by Related Party Investors (see Note 6).

From the period between when the related party relationship was triggered in September 2024 through December 31, 2024, the Company earned revenue totaling approximately $644,000, incurred cost of revenues totaling approximately $188,000, and incurred selling, general and administrative expenses totaling approximately $517,000 from the remaining three Related Party Managed Solutions Customers.

As of December 31, 2024, the Company was owed approximately $349,000 for managed services from the Related Party Managed Solutions Customers, which was included as a component of accounts receivable on the accompanying consolidated balance sheets and approximately $102,000 for working capital advances from the Related Party Managed Solutions Customers, which was included as a component of working capital advances on the accompanying consolidated balance sheets.

As of December 31, 2024, the Company owed approximately $28,000 to the Related Party Managed Solutions Customers.

Prior to the date the related party relationship was triggered, each Related Party Investors had entered into secured promissory notes that remained outstanding as of December 31, 2024 totaling $1,750,000 and $1,400,000 and were included as a component of debt, net on the accompanying consolidated balance sheets.

Accrued interest on the notes remaining outstanding as of December 31, 2024 totaled approximately $384,000 and $289,000 and are included as a component of accrued expenses on the accompanying consolidated balance sheets.

In September 2016, the Company entered into an unsecured promissory note with a company owned by the Company’s Chief Executive Officer (the “Related Party Lender”) for an original principal sum of INR 16,500,000 ($192,761 at December 31, 2024) (the “2016 Promissory Note”).

In September 2016, the Company entered into an unsecured promissory note with a company owned by the Company’s Chief Executive Officer (the “Related Party Lender”) for an original principal sum of about $248,000 at September 30, 2016 (the “2016 Promissory Note”).

The principal balance of the note as of December 31, 2025 and December 31, 2024 are $0 and approximately $179,910 respectively.

The note bears annual interest of 14.0%.

The note does not have a maturity date, and the full note balance is to be paid over time in amounts determined by the Company.

In July 2024, the Company borrowed an additional INR 8,300,000 ($96,965 at December 31, 2024) from the Related Party Lender (the “2024 Promissory Note”).

In July 2024, the Company borrowed an additional amount of about $93,000 from the Related Party Lender (the “2024 Promissory Note”).

The loan bears interest at 14.0% and matures in July 2031.

The principal and accrued interest is due in full at maturity.

Total interest expense recognized on the promissory notes with the Related Party Lender totaled INR 1,525,193 and INR 994,022 ($18,209 and $14,890, respectively) for the years ended December 31, 2024 and 2023, respectively.

Total interest accrued was INR 8,414,431 and INR 6,240,004 ($98,301 and $67,462, respectively), as of December 31, 2024 and 2023, respectively, and was recorded as a component of accrued expenses on the accompanying consolidated balance sheets.

Related Party Lender

Following the closing of the Business Combination on July 12, 2024 which triggered the conversion of certain convertible notes, a noteholder’s ownership percentage of the Company’s common stock exceeded 5.0%, triggering a related party relationship.

On October 10, 2024, the Company issued this related party a convertible note with a principal amount of $800,000.

The note has an interest rate of 20% and a maturity date of April 8, 2025.

The note is convertible during the first 90 days after issuance at a conversion price of $1.10.

The Company accounts for these convertible notes using the fair value option.

As of December 31, 2024, the carrying amount of the note and accrued interest was $800,000 and $35,945, respectively.

As of December 31, 2024, the fair value of this note was approximately $837,000.

On October 10, 2024, the Company issued this related party a convertible note with a principal amount of $400,000.

The note has an interest rate of 20% and a maturity date of June 1, 2025.

The note is convertible during the first 90 days after issuance at a conversion price of $1.10.

The Company accounts for these convertible notes using the fair value option.

As of December 31, 2024, the carrying amount of the note and accrued interest was $400,000 and $6,137, respectively.

As of December 31, 2024, the fair value of this note was approximately $418,000.

ConnectM’s audit committee will approve only those transactions that it determines are fair to ConnectM and in ConnectM’s best interests.

We have determined that each of Ms.

Markscheid and Mr.

Barua qualify as an independent director, as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules.

In November 2025, in connection with the acquisition of controlling interest in Geo Impex & Logistics Pvt.

Ltd., the Company assumed a note payable of approximately $279,000 due to Avanti, maturing on October 31, 2026.

Total interest expense recognized on the promissory notes with the Related Party Lender was approximately $23,107 for the year ended December 31, 2025, respectively, compared to approximately $18,209 for the year ended December 31, 2024.

Amperics Asset Acquisition

On November 3, 2025, the Company completed the acquisition of substantially all assets of Amperics Holdings LLC and Amperics Inc.

(collectively, “Amperics”) pursuant to an Asset Purchase Agreement (the “Amperics Asset Acquisition”).

Bala Padmakumar, a member of the Company’s Board of Directors, previously served as Chief Executive Officer of Amperics until 2020 and holds a significant minority ownership interest in Amperics and, as such, is considered a related party to the transaction.

The acquired assets consist primarily of proprietary nanotechnology-based energy storage intellectual property, including patents, know-how, software and technical documentation, which have been integrated into the Company’s Keen Labs platform to support its virtual power plant (“VPP”) and AI-enabled energy management initiatives.

The aggregate consideration for the transaction consisted of the issuance of 2,700,000 shares of the Company’s common stock to the seller.

Based on the closing market price of $0.32 per share on the acquisition date, the implied value of the equity consideration was approximately $864,000.

No cash consideration was paid, and the agreement does not include any earn-outs or other contingent consideration.

The Company determined that the transaction qualified as an asset acquisition under applicable accounting guidance, as substantially all of the fair value of the acquired gross assets was concentrated in a single identifiable asset (intellectual property).

Accordingly, the transaction was accounted for under ASC 805-50, and no goodwill was recognized.

Given the involvement of a related party, the terms of the transaction, including the consideration paid, were reviewed and approved by disinterested members of the Company’s Board of Directors in accordance with the Company’s related party transaction policies.

The Company believes that the terms of the transaction are no less favorable than those that could have been obtained from unaffiliated third parties.

Principal Accountant Fees and Services.

The following table presents fees for professional services by Adeptus Partners, LLC for the audit of the Company’ financial statements and fees billed for audit-related services, tax services and all other services for the years ended December 31, 2024 and 2023.

The following table presents fees for professional services by KNAV CPA LLP and Adeptus Partners, LLC for the audit of the Company’ financial statements and fees billed for audit-related services, tax services and all other services for the years ended December 31, 2025 and 2024, respectively.

Audit Related Fees**

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Financial Statements of ConnectM Technology Solutions, Inc.

Report of Independent Registered Public Accounting Firm (Adeptus Partners, LLC;

Ocean, New Jersey;

Report of Independent Registered Public Accounting Firm (KNAV CPA LLP;

Consolidated Balance Sheets

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(incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on July 18, 2024)

Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock filed on May 5, 2025 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 23, 2025)

Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock filed on May 5, 2025 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 23, 2025)

Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on July 18, 2024)

1 unchanged sentence

Warrant Agreement, dated May 10, 2022, by and between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 16, 2022)

Description of Securities

Description of Securities (incorporated by reference to Exhibit 4.4 to the Form 10-K filed with the Securities and Exchange Commission on August 4, 2025)

Form of Indemnification Agreement of ConnectM Technology Solutions, Inc.

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Termination Agreement dated as of April 2, 2025, by and among (i) Meteora Special Opportunity Fund I, LP, (ii) Meteora Capital Partners, LP, (iii) Meteora Select Trading Opportunities Master, LP, and (iv) ConnectM (incorporated by reference to Exhibit 10.1 to the Current report on Form 8-K filed by the registrant on April 18, 2025)

Code of Ethics

Insider Trading Policy

List of Subsidiaries

Code of Ethics (incorporated by reference to Exhibit 14.1 to the Form 10-K filed with the Securities and Exchange Commission on August 4, 2025)

Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Form 10-K filed with the Securities and Exchange Commission on August 4, 2025)

Subsidiaries of the Registrant

Consent of independent registered public accounting firm – Adeptus Partners, LLC

Consent of independent registered public accounting firm – KNAV CPA LLP

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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(1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Income, (3) the Consolidated Statements of Comprehensive Income, (4) the Consolidated Statements of Changes in Stockholders’ Equity, (5) the Consolidated Statements of Cash Flows, and (6) Notes to Consolidated Financial Statements.

The cover page from this Quarterly Report on Form 10-X formatted in Inline XBRL.

The cover page from this Annual Report on Form 10-K formatted in Inline XBRL.

Filed herewith

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By (Signature and Title) Bhaskar Panigrahi, Chief Executive Officer and Chairman

Date August 04, 2025

Date April 16, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Chief Executive Officer;

August 04, 2025

April 16, 2026

Bhaskar Panigrahi

(Principal Executive Officer)

/S/ Jeff Ervin

Interim Chief Financial Officer

August 04, 2025

(Principal Financial Officer)

/S/ Mahesh Choudhury

Principal Financial Officer & Vice President, U.S.

April 16, 2026

Mahesh Choudhury

/S/ Bala Padmakumar

Vice Chairman

August 04, 2025

April 16, 2026

Bala Padmakumar

/S/ Kathy Cuocolo

August 04, 2025

April 16, 2026

Kathy Cuocolo

/S/ Stephen Markscheid

August 04, 2025

April 16, 2026

Stephen Markscheid

/S/ Gautam Barua

August 04, 2025

April 16, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2023.

We began serving as the Company’s auditor in 2023.

In 2025, we became the predecessor auditor.

/s/ Adeptus Partners, LLC

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August 4, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of ConnectM Technology Solutions, Inc.

and its subsidiaries

Opinion on the consolidated financial statements

We have audited the accompanying consolidated balance sheet of ConnectM Technology Solutions, Inc.

and its subsidiaries (the Company) as of December 31, 2025, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Substantial doubt about the Company’s ability to continue as a going concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring net losses, has an accumulated deficit and stockholders’ deficit and working capital deficit.

The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company’s operating and investing activities and meet financial obligations over the next year from the date these consolidated financial statements were issued.

There can be no assurance that such plans will be successfully implemented or will generate sufficient liquidity to meet the Company’s obligations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 3.

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

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ KNAV CPA LLP

We have served as the Company’s auditor since 2025.

Atlanta, Georgia

April 16, 2026

PCAOB ID - 2983

CONNECTM TECHNOLOGY SOLUTIONS, INC.

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Current assets

Accounts receivable

Accounts receivable – net of allowance for credit loss

Contract asset

Convertible note receivable, related party

Deferred offering costs

Other receivable, related party

Inventories, net

Forward purchase agreement derivative asset

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Right-of-use asset – finance lease

Property, plant and equipment, net

Property and equipment, net

Intangible assets, net

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Accrued expenses and other current liabilities

Contingent consideration

Contingent consideration liability

Debt, net of debt discount

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Derivative liabilities

Deferred consideration

Operating lease liability

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Contract liabilities

3(a)(10) Settlement Agreement, at fair value

Other payable

Deferred tax liabilities

Total current liabilities

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Finance lease liabilities, net of current portion

Contingent consideration

Contingent consideration liability, net of current portion

Total liabilities

Commitments and Contingencies (Note 19)

Commitments and Contingencies

Stockholders’ Deficit:

Preferred stock Series A, $ 0.001 par value, 10,000,000 shares authorized as of December 31, 2024 and 2023 no shares issued or outstanding as of December 31, 2024 and 2023

Common stock, $ 0.0001 par value, 100,000,000 shares authorized as of December 31, 2024 and 2023, respectively, 29,093,289 and 13,338,437 issued and outstanding as of December 31, 2024 and 2023, respectively

Preferred stock Series A, $ 0.0001 par value, 10,000,000 shares authorized as of December 31, 2025 and December 31, 2024 no shares issued or outstanding as of December 31, 2025 and December 31, 2024

Common stock, $ 0.0001 par value, 250,000,000 shares and 100,000,000 shares authorized as of December 31, 2025 and December 31, 2024 respectively, 153,255,345 and 29,093,289 issued and outstanding as of December 31, 2025 and December 31, 2024 respectively

Additional paid-in-capital

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( 25,104,263 )

Noncontrolling interest

Non-controlling interest

Total stockholders’ deficit

( 23,786,507 )

( 9,482,564 )

Total liabilities and stockholders’ deficit

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Years Ended December 31,

Costs and expenses:

Year Ended December 31,

Cost of revenues

Selling, general and administrative expenses

Loss on impairment

Total costs and expenses

Loss on impairment of intangible assets and goodwill

Loss from operations

5 unchanged sentences

( 2,714,048 )

Loss on extinguishment of debt

Loss on issuance of financial instruments

Loss on extinguishment of debt and vendor payable

( 3,010,366 )

( 1,645,443 )

Gain on extinguishment of debt

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( 2,146,284 )

Change in fair value of contingent consideration

Change in fair value of derivative liabilities

( 1,707,747 )

Change in fair value of forward purchase agreement

( 8,254,390 )

Change in fair value of contingent consideration

Day one gain on issuance of SEPA

Gain on forward purchase agreement modification

Loss on forward purchase agreement modification

Other expense

Total other expense, net

Change in fair value of derivative liabilities

Loss on forward purchase agreement

Gain on forward purchase agreement

Gain on modification of liabilities

Bargain purchase gain

Change in fair value on Section 3(a)(10) Settlement Agreement (Note 12)

Other income (expense), net

Total other income (expense), net

( 3,487,971 )

( 10,905,859 )

Net loss from operations before income taxes

( 16,073,758 )

( 22,508,208 )

Income tax benefit

( 16,057,672 )

( 22,508,208 )

net income (loss) attributable to noncontrolling interests

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Other comprehensive income (loss):

Foreign currency translation adjustment

Comprehensive loss before noncontrolling interests

Foreign currency translation adjustments

Comprehensive income/(loss) before noncontrolling interests

( 16,431,390 )

( 22,514,365 )

comprehensive loss (income) attributable to noncontrolling interests

Comprehensive loss attributable to ConnectM Technology Solutions, Inc.

comprehensive loss/(income) attributable to non-controlling interests

Comprehensive Income/(loss) attributable to ConnectM Technology Solutions, Inc.

( 16,618,768 )

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Weighted average shares outstanding of common stock

Basic and diluted net loss per share of Common Stock

Basic and diluted net loss per share, common stock

The accompanying notes are an integral part of these consolidated financial statements.

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FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Preferred Shares subject to Possible Redemption

Series Seed ‑ 1

Comprehensive

Solutions, Inc.'s

Stockholders’

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Stockholders’

Balance, as of December 31, 2022

( 13,710,685 )

( 12,386,857 )

Income (Loss)

Balances, as of January 1, 2024

( 22,860,351 )

Retroactive application of recapitalization

( 9,456,219 )

( 9,482,564 )

Other comprehensive income

Issuance of common stock in connection with conversion of convertible notes payable

Issuance of common stock

Issuance of common stock in connection with business combination with MCAC, net of transaction costs (see Note 4)

( 6,673,643 )

( 6,672,972 )

Adjusted balance, as of December 31, 2022

( 6,672,972 )

Stock-based compensation expense

Other comprehensive income

Acquisition of noncontrolling interest in connection with acquisition of a business (see Note 5)

Issuance of common stock as consideration in acquisition of a business

Acquisition of additional noncontrolling shares

Issuance of common stock to extinguish obligations to vendors and lenders

Issuance of common stock to vendors as consideration

Issuance of common stock to extinguish note payable, related party (see Note 16)

Issuance of common stock in relation to SEPA (see Note 8)

Share based compensation expense (see Note 10)

Net loss 2024

( 22,565,748 )

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( 23,786,507 )

Stock-based compensation expense

Stock-based compensation to employees

Shares issued for services

Shares issues for settlement

Shares issued for acquisition of Green Energy Gains

Non-controlling unit ownership change

Business combination recapitalization net of transaction costs

Balance, as of January 1, 2025

( 45,426,099 )

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( 23,786,507 )

Conversion of convertible debt and accrued interest

Shares issued in connection with debt settlements

Issuance of common stock for Standby Equity Purchase Agreement

Minority Interest Resulting from DC Acquisition

Foreign currency translation adjustments

Other comprehensive income

Issuance of common stock to settle claim under Section 3(a)10 Settlement Agreement (see Note 12)

Issuance of common stock to settle share reset derivative liabilities (see Note 11)

Issuance of common stock to BOD and employees

Issuance of common stock in connection with services

Issuance of common stock in connection with stock subscription

Issuance of common stock in connection with the conversion of convertible debt and accrued interest pursuant to Section 3(a)(9)

Issuance of common stock in connection with the conversion of promissory note and accrued interest 3(a)(9)

Issuance of common stock in connection with share exchange agreement to settled accounts payable vendors

Issuance of common stock in connection with the ATS and SESB acquisition (see Note 5)

Issuance of common stock in connection with the conversion of SEPA convertible debt (see Note 8)

Recognition of non-controlling interest in connection with the acquisition of CER (see Note 5)

Issuance of common stock in connection with acquisition of Geo Impex LLC/India (see Note 5)

Issuance of common stock in connection with acquisition of Amperics Holdings LLC (see Note 5)

( 16,245,050 )

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( 1,526,982 )

( 23,786,507 )

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,

Year Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Stock-based compensation expense

Shares issued for service

Shares issue for service

Share issued for SEPA

Share issues for settlement of expenses

Share issues for settlement of expense

Stock-based compensation to employees

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Provision for inventory shrinkage

Bad debt expense

Impairment loss

Loss (gain) on disposal of property, plant and equipment

Loss on extinguishment of debt

Gain on extinguishment of debt

Provision for credit losses

Loss on impairment of intangible assets and goodwill

Investment write off

Gain on disposal of property and equipment

Loss on issuance of financial instruments

Loss on extinguishment of debt and vendor payable

Gain on extinguishment of debt and vendor payable

( 2,763,363 )

( 2,257,638 )

Change in fair value of convertible debt

Change in fair value of forward purchase agreement

Gain on modification of forward purchase agreement

Loss on repossessed vehicle

Bargain purchase gain

( 2,121,079 )

Loss on termination of lease

Income from sale of property and equipment

Day one gain on issuance of SEPA and convertible note

Change in fair value of contingent consideration

Gain on modification of forward purchase agreement

( 1,572,236 )

Change in fair value of derivative liabilities

Loss on modification of forward purchase agreement

Change in fair value of contingent consideration

Change in fair value of Section 3(a)(10) Settlement Agreement (Note 12)

Changes in operating assets and liabilities:

Accounts receivable

( 2,527,305 )

Contract asset

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Accrued expenses

( 1,257,359 )

Operating lease liabilities

Working Capital Advance

Working capital advances

Contingent liability

Contract liabilities

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Purchase of property and equipment

Proceeds from sale of property and equipment

Issuance of convertible note receivable

Purchase of additional noncontrolling shares

Cash acquired from acquisition of businesses, net of purchase price paid

Proceeds from the sale of property and equipment

Purchase of additional non-controlling shares

Cash acquired in Geo Impex Acquisition

Cash acquired in CER Acquisition

Cash paid for capitalized software development costs

Net cash used in investing activities

Cash acquired from acquisition of business, net of purchase price paid

Net cash received from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the business combination

Payment for reimbursement of consideration shares related to the Forward Purchase Agreement payment

Payment for reimbursement of consideration shares related to Forward Purchase Agreement payment

( 36,727,814 )

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Proceeds from the issuance of convertible notes

Proceeds from Stock Subscription agreement

Cash paid for debt issuance costs

( 1,015,114 )

Payments of deferred offering costs

Repayments of debt

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( 2,262,401 )

Repayments of convertible debt

Repayments on convertible notes

Proceeds from factoring receivable arrangements

Repayments on factoring receivable arrangements

Payments of deferred consideration

Proceeds from premium financing obligations

Repayment of premium financing obligations

Advance from lender

Advance to Monterey Capital Acquisition Corporation

( 1,933,695 )

( 2,491,431 )

Proceeds from issuance of convertible notes

Advance from Lender

Proceeds from Forward Purchase agreement

Payment on finance leases

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Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash, beginning of year

Cash, end of year

Net decrease in cash and cash equivalents

Cash, beginning of the period

Cash, end of the period

Supplemental disclosures of cash flow information:

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Supplemental disclosures of noncash financing information:

Right-of-use asset, operating acquired

Right-of-use asset, finance acquired

Right-of-asset, operating acquired

Derivative liabilities issued in connection with extinguishment of obligations to lenders and vendors through issuance of common stock

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Vendor obligation exchanged for debt instrument

Deferred offering costs included in accounts payable

Common stock issued for prepaid expenses

Unpaid purchase price of acquisition

Shares issues in connection with debt conversion agreements

Recapitalization of non-controlling interest

Shares issues in connection with debt conversion agreement

Recapitalization of noncontrolling interests

Accounts payable and debt extinguishment through the Section 3(a)(10) Settlement Agreement

Extinguishment of accounts payable through issuance of debt

Repossessed vehicle

Extinguishment of derivative liability

Removal of ROU asset and lease liability at lease termination

Reclassification of remaining obligation under terminated lease

Fair value of shares issued to settle Claim under Section 3(a)(10) Settlement Agreement

Fair value of shares issued to settle the share reset derivative liabilities

Fair value of shares issued to settle Claim under Section 3(a)(9) Settlement Agreement

Fair value of shares in connection with the conversion of SEPA convertible debt

Settlement of accounts payable through issuance of shares

Shares issued to vendor for prepaid expenses and accounts payable

Acquisition of proprietary technology

Shares issued to acquire ATS and SESB

Shares issued to acquire Geo Impex

Promissory note in connection with Geo Impex acquisition

Deferred consideration for CER acquisition

Extinguishment of derivative liability through the recognition of a reinstated debt obligation amounting

The accompanying notes are an integral part of these consolidated financial statements.

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ConnectM Technology Solutions, Inc.

(the “Company”), a Delaware corporation, who conducts its operations through its subsidiaries, is a constellation of companies offering solutions to its customers for the (i) decarbonization of homes and businesses using its AI-driven energy intelligence platform, (ii) facilitation of business-to-business transportation for products using contracted drivers through its online and mobile last mile local delivery platform, and (iii) management of connected operations using its industrial internet of things (“IIoT”) platform.

The Company also provides a managed solutions service offering that includes human resources management, procurement services, omnichannel marketing and lead generation services and access to working capital loans to improve operating efficiencies and enhance profitability.

The platforms and software that are used to deliver the solutions harvest data that is transformed into insights that its customers are able to access and use for analysis and action.

The Company earns revenue outside the United States from its Transportation segments.

The Company also offers physical products as part of its solutions offerings, including an AI-driven intelligent heat pump system for use in the decarbonization of homes and businesses solution and display clusters, digital control units and vehicle control units used in the management of connected operations solution.

On July 12, 2024 (the “Closing Date”), Monterey Capital Acquisition Corporation (“MCAC”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ConnectM Technology Solutions, Inc.

(“Legacy ConnectM”).

Pursuant to the Merger Agreement, MCAC acquired all of the issued and outstanding shares of common stock from the Legacy ConnectM shareholders (the “Business Combination”) in exchange for 14,500,000 shares of ConnectM’s common stock (the “Share Consideration”) (see Note 5).

On the Closing Date, and in connection with the closing of the Merger Agreement, MCAC changed its name to ConnectM Technology Solutions, Inc (“ConnectM”) and the Company’s common stock began trading on the NASDAQ under the ticker symbol CNTM.

In connection with the closing of the Business Combination, the then-outstanding shares of common stock of Legacy ConnectM, were converted into shares of the common stock of the Company at an exchange ratio of approximately 3.3214 shares of Company common stock for each share of Legacy ConnectM common stock (the “Exchange Ratio”)

Legacy ConnectM was deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”).

The determination was primarily based on Legacy ConnectM’s shareholders prior to the Business Combination having a majority of the voting interests in the combined company, Legacy ConnectM’s ability to exert control over the majority of the board of directors of the combined company, Legacy ConnectM’s ability to maintain control of the board of directors on a go-forward basis, Legacy ConnectM’s senior management comprising the senior management of the combined company;

and Legacy ConnectM’s operations prior to the Business Combination comprise the ongoing operations of the combined company.

(the “Company,” “we” and/or “our”), a Delaware corporation, conducts its operations through its subsidiaries and operates a unified, AI-enabled technology platform powering the modern energy economy.

Through this platform, the Company connects OEMs, service providers and end customers to enable electrification, decarbonization and grid-aware energy management across residential, commercial and infrastructure applications.

The Company delivers solutions to its customers for (i) the decarbonization of homes, critical infrastructure and businesses through energy management-as-a-service offerings, including weatherization, HVAC, solar, battery and EV charging solutions, (ii) the facilitation of business-to-business transportation through its online and mobile last-mile delivery platform utilizing contracted drivers, and (iii) the management of connected operations through its industrial internet of things (“IIoT”) platform.

These offerings are integrated and optimized through the Company’s proprietary platform, developed and continuously enhanced by Keen Labs, its AI and technology subsidiary.

The Company also offers physical products as part of its solutions offerings, including AI-enabled heat pump systems for use in the decarbonization of homes and businesses, as well as display clusters, digital control units and vehicle control units used in the management of connected operations.

The Company also provides managed solutions offerings, including human resources management, procurement services, omnichannel marketing and lead generation services, and access to working capital solutions designed to improve operating efficiency and enhance profitability for service providers.

The Company’s platform and associated software continuously collect and analyze operational data, generating actionable insights that customers use for monitoring, optimization and decision-making, and enabling applications such as predictive maintenance and virtual power plant integration.

The Company earns revenue outside the United States from its Owned Service Network, Distributed Energy & Renewables and Transportation segments.

On July 12, 2024, the Company consummated the Business Combination which was accounted for as a reverse recapitalization with Legacy ConnectM being deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”).

Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy ConnectM issuing stock for the net assets of MCAC, accompanied by a recapitalization.

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and (iv) the Company’s equity structure for all periods presented.

For more details on the reverse recapitalization, see Note 4 “Reverse Capitalization” to the Company’s Consolidated Financial Statements.

As a result of the reverse recapitalization, all references to numbers of common shares and per common share data for 2024 in these consolidated financial statements and related notes have been retroactively adjusted to account for the effect of the reverse recapitalization.

Basis of presentation and principles of consolidation:

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All significant intercompany accounts, transactions and profits and losses were eliminated in consolidation.

The Company also consolidated variable interest entities where it has been determined that the Company is the primary beneficiary of those entities’ operations.

The Company has evaluated its relationships with other entities and has determined that it does not have any variable interest entities for which it is the primary beneficiary.

Any reference in these footnotes to the applicable guidance is meant to refer to the authoritative U.S.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Noncontrolling Interest:

The portion of equity not owned by the Company in entities controlled and consolidated by the Company are presented as noncontrolling interest and classified as a component of consolidated stockholders’ deficit, separate from total stockholders’ deficit on the Company’s consolidated balance sheets.

The amount recorded is based on the noncontrolling interest holders’ initial investment, adjusted to reflect the noncontrolling interest holder’s share of earnings or losses from the Company controlled entity, and any distributions received or additional contributions made by the noncontrolling interest holder.

The earnings or losses from the entity attributable to noncontrolling interests are reflected in net income attributable to noncontrolling interests on the accompanying consolidated statements of operations and comprehensive loss.

These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and its controlled subsidiaries over which the Company exercises majority board control;

investment in joint ventures, in which the Company shares equal control with its partner, are accounted for under the equity method.

Intercompany accounts, transactions, profits and losses have been eliminated in consolidation.

Investments in entities where the Company holds at least a 20% ownership interest and has the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting.

These consolidated financial statements are presented in United States Dollars (“USD” or $), which is the functional currency of the Company.

Non-controlling Interest:

The portion of equity not owned by the Company in entities controlled and consolidated by the Company are presented as non-controlling interest and classified as a component of consolidated stockholders’ deficit, separate from total stockholders’ deficit on the Company’s consolidated balance sheets.

The amount recorded is based on the non-controlling interest holders’ initial investment, adjusted to reflect the non-controlling interest holder’s share of earnings or losses from the Company controlled entity, and any distributions received or additional contributions made by the non-controlling interest holder.

Changes to the Company’s ownership that do not result in a loss of control are accounted for as equity transactions.

The earnings or losses from the entity attributable to non-controlling interests are reflected in net income attributable to non-controlling interests on the accompanying consolidated statements of operations and comprehensive loss.

All significant intercompany accounts, transactions, and profits and losses were eliminated in consolidation.

CORRECTION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Management of the Company determined on April 8, 2025, during the preparation of consolidated financial statements for the year ended December 31, 2024, that there were errors that were material to the Company’s previously issued interim consolidated financial statements for the quarterly period ended September 30, 2024 (the “Restated Period”), as included in the Company’s Quarterly Report on Form 10-Q for such period (the “Prior Filing”) and the Prior Filing needs to be restated.

The Company’s Prior Filing, as well as any reports, related to earnings releases, investor presentations or similar communications of the Company’s Prior Filing should no longer be relied upon.

Identified errors consisted of the following:

● Note conversion agreements were entered into during September 2024 that were determined to be debt restructurings requiring recognition as extinguishments and share issuances at the time the conversion agreements were entered into were not accounted for as such.

As such, the shares of Company common stock to be issued upon conversion were considered issued and outstanding for accounting purposes irrespective of the timing of when the shares were issued, though not considered issued or outstanding for legal purposes.

Accordingly, the shares underlying those agreements were not properly accounted for or disclosed as share issuances and the associated obligations were not properly accounted for or disclosed as extinguishments in the Prior Filing.

Additionally, there were embedded derivatives contained within each conversion agreement that were not properly identified, recorded at fair value at issuance, re-measured to fair value at the end of the reporting period, or disclosed in the Prior Filing.

This has led to the overstatement of net loss, understatement of common stock, understatement of additional paid-in capital, overstatement of debt, and understatement of derivative liabilities in the Prior Filing.

● True-up adjustments in the Company’s master service agreements were improperly classified as revenue instead of as a reduction to operating expenses in the Prior Filing.

This has led to an overstatement of the Company’s revenue and selling, general and administrative expenses in the Prior Filing.

● Fees paid on the Forward Purchase Agreement were improperly classified as change in fair value of forward purchase agreement, a component of other income (expense), instead of additional paid-in capital in the Prior Filing.

The has led to an overstatement of additional paid-in capital and an overstatement of gain on forward purchase agreement modification in the Prior Filing.

● Fees that were direct and incremental to the Business Combination were not accrued for as of the Closing Date.

This has led to an understatement of accrued expenses and an overstatement of additional paid-in capital in the Prior Filing.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The impact of the restatements on the line items within the previously reported unaudited condensed consolidated financial statement as of and for the nine months ended September 30, 2024 included in the Company’s Form 10-Q filed with the SEC on December 16, 2024 are as follows:

Consolidated Balance Sheet as of September 30, 2024 (unaudited) (in thousands)

As Previously Reported

Accrued Expenses

Due to Related Party

Due to Libertas

Derivative liabilities

Total current liabilities

Total liabilities

Additional paid-in capital

Accumulated deficit

Stockholders’ deficit

Total stockholders’ deficit

Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three months ended September 30, 2024 (in thousands)

As Previously Reported

Selling, general and administrative expenses

Loss from operations

Interest expense

Loss on extinguishment of debt

Gain on extinguishment of debt

Change in fair value of forward purchase agreement

Gain on forward purchase agreement modification

Change in fair value on derivative liabilities

Total other income (expense)

Loss before income taxes

Net loss attributable to shareholders

Comprehensive loss

Comprehensive loss attributable to shareholders

Basic and diluted net loss per share, common stock

Weighted average shares outstanding of common stock

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2024 (in thousands)

As Previously Reported

Selling, general and administrative expenses

Loss from operations

Interest expense

Loss on extinguishment of debt

Gain on extinguishment of debt

Change in fair value of forward purchase agreement

Gain on forward purchase agreement modification

Change in fair value on derivative liabilities

Total other income (expense)

Loss before income taxes

Net loss attributable to shareholders

Comprehensive loss

Comprehensive loss attributable to shareholders

Basic and diluted net loss per share, common stock

Weighted average shares outstanding of common stock

Unaudited Consolidated Statement of Stockholders’ Deficit for the three months ended September 30, 2024 (in thousands)

As Previously Reported

Additional paid-in capital

Accumulated deficit

Stockholders’ deficit

Total stockholders’ deficit

Unaudited Consolidated Statement of Stockholders’ Deficit for the nine months ended September 30, 2024 (in thousands)

As Previously Reported

Additional paid-in capital

Accumulated deficit

Stockholders’ deficit

Total stockholders’ deficit

Unaudited Consolidated Statement of Cash Flows for the nine months ended September 30, 2024 (in thousands)

As Previously Reported

Loss on extinguishment of debt

Gain on extinguishment of debt

Change in fair value of forward purchase agreement

Gain on modification of forward purchase agreement

Change in fair value on derivative liabilities

Net cash used in operating activities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements are presented in United States Dollars (“USD” or $), which is the functional currency of the Company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts financial assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period .

GAAP requires management to make estimates and assumptions that affect the reported amounts of financial assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

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Accordingly, the actual results could differ significantly from those estimates.

The Company’s most significant estimates and judgments involve the identification of intangible assets in business combination, valuation of acquired assets and assumed liabilities in a business combinations, classification of financial instruments as equity or liability, valuation of equity-classified and liability-classified financial instruments, the useful lives of long-lived assets, assumptions used in assessing impairment of long-lived assets , valuation of contingent consideration obligations, and the valuation of convertible debt reported at fair value.

The Company’s most significant estimates and judgments involve the identification of intangible assets in business combination, and determination of their useful life, valuation of acquired assets and assumed liabilities in a business combination, assessment of financial instruments as equity or liability, valuation of equity-classified and liability-classified financial instruments, the useful lives of long-lived assets, goodwill, identified intangible assets, assumptions used in assessing impairment of long-lived assets and goodwill, valuation of contingent consideration obligations, and the valuation of PPA for assets acquisition, convertible debt reported at fair value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Segment reporting :

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The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources.

The CODM focuses on operating (loss) income from operations as the primary measure to manage the business.

Segment operating (loss) income from operations is (loss) income before interest expense, other expense, other income, unallocated corporate costs, and income taxes.

There are four operating and reportable segments based on the level at which the CODM reviews operating results, assesses performance and makes decisions regarding resource allocation as follows:

(1) Owned service network segment consists of our owned service providers who serve as a single point solution provider for homeowners and light commercial building owners for their electrification and decarbonization needs, including system design, installation, monitoring, maintenance and repair.

There are six operating and reportable segments based on the level at which the CODM reviews operating results, assesses performance and makes decisions regarding resource allocation as follows:

(1) Owned service network segment consists of our owned service providers who serve as a single point solution provider for enterprises, infrastructure providers, homeowners, and light commercial building owners for their electrification and decarbonization needs, including system design, installation, monitoring, maintenance and repair of solar energy systems and HVAC solutions.

The owned service providers use the Company’s technology platform, which provides maintenance, repair, and installation guidance and optimization (the “Technology Platform”), in servicing the homeowners and light commercial building owners.

(2) Managed solutions segment provides third party residential and light commercial service providers with access to the Technology Platform as well as a selection of servicing offerings that the managed solutions customer can select from, including human resources management, procurement services, omnichannel marketing and lead generation as well as access to short-term working capital loans.

(3) Distributed Energy & Renewables (“DER”) focuses on the delivery of solar energy and distributed energy solutions for commercial, residential, consumer and industrial customers in India, including project development, EPC services and ongoing energy management.

(4) Logistics segment focuses on the facilitation of business-to-business transportation of heavy goods using the Company’s last mile delivery software.

(4) Transportation segment focuses on the sale of hardware to original equipment manufacturers (“OEMs”).

(5) Transportation segment focuses on the sale of hardware, software and technical services for electric vehicles to original equipment manufacturers (“OEMs”).

OEMs have the option to buy access to the Technology Platform to remotely monitor the performance of the hardware.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(6) Corporate & Strategic Assets segment encompasses corporate-level operations and the Company’s investment in Geo Impex India Private Limited, which holds approximately 76 acres of land near Chatrapur, Odisha, India, together with related entitlements and approvals for the development of a multimodal logistics park and AI-enabled data center campus.

This segment did not generate revenue or incur material segment-level operating expenses during the periods presented.

The segment’s principal asset is the underlying landholding and associated development rights.

Cash and cash equivalents:

The Company considers all highly liquid instruments with a maturity date of three months or less at the time of purchase and money market accounts to be cash equivalents.

The Company considers all highly liquid instruments with a maturity date of three months or less at the time of purchase to be cash equivalents.

The Company had no cash equivalents at December 31, 2025 and December 31, 2024.

As of December 31, 2024, the Company had $1,319,078 that exceeded FDIC insurance limits of $ 250,000 .

As of December 31, 2025 and December 31, 2024, the Company had approximately $ 1,887,000 and $ 1,319,000 respectively, that exceeded FDIC insurance limits of $250,000.

Fair value measurements:

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● Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

● Level 3 – Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

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Accordingly, changes in fair value related to changes in the Company’s credit risk were recognized as a component of accumulated other comprehensive income while all other changes in fair value were recognized in the consolidated statements of operations and comprehensive loss.

The Company’s financial instruments with a carrying value that approximates fair value consist of cash, accounts receivable, contract asset, convertible note receivable-related party, inventory, deferred offering costs, other receivable-related party, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, accrued expenses-related party and contract liabilities due to their liquid or short-term nature or expected settlement dates of these instruments.

The Company’s financial instruments with a carrying value that approximates fair value consist of cash, accounts receivable, working capital advances, contract asset, convertible note receivable-related party, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, and contract liabilities due to their liquid or short-term nature or expected settlement dates of these instruments.

If these financial instruments were recorded at fair value, they would be based on Level 1 inputs, except for short-term borrowings and notes receivable, related parties, net which would be based on Level 2 and Level 3 inputs, respectively.

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The impairment charges recognized on non-financial assets that consist of investment, goodwill and acquired intangible assets are based on Level 3 inputs, including a comparison of the Company’s results with expectations and expectation for future profits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company’s financial instruments that are measured at fair value on a recurring basis consist of forward purchase agreement derivative asset, forward purchase agreement put option, contingent consideration obligation, convertible debt and derivative liabilities (see Note 15).

The Company’s financial instruments that are measured at fair value on a recurring basis consist of forward purchase agreement derivative asset, 3(a)(10) settlement agreement, forward purchase agreement put option, contingent consideration obligation, convertible debt and derivative liabilities (see Note 12).

Related parties:

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Any party that is deemed to be related to the Company is referred to as an “affiliate” or “related party” in these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accounts receivable and allowance for credit losses :

Accounts receivable are carried at original invoice amount, less any estimate made for credit losses.

The allowance for credit losses is based on the expected credit losses on receivables in an amount equal to the estimated probable losses net of recoveries.

The Company currently monitors financial conditions of the companies it has receivables from on a continuing basis.

After considering current economic conditions and specific and financial stability of its receivables, an allowance for credit losses is maintained in the consolidated balance sheets at a level which management believes is sufficient to cover all probable future credit losses as of the consolidated balance sheet date based on specific reserves and an expectation of future economic conditions that might impact collectability.

Changes in circumstances relating to these factors may result in the need to increase or decrease our allowance for credit losses in the future.

There was no allowance for credit losses recorded as of December 31, 2024 and 2023.

There were two customers who individually accounted for more than 10.0% of accounts receivable as of December 31, 2024.

The customers Air Temp Services and Tire Rack accounted for 18 % and 36 % of the receivable respectively.

Air Temp Services is considered a related party due to its ownership by SriSid LLC and Arumilli LLC, which are related parties to the Company.

The Company had a Managed Services Agreement in place with Air Temp during the reporting period.

Trade accounts receivable are recorded at the invoiced amount, net of allowances for expected credit losses.

The Company estimates expected credit losses on trade receivables using a current expected credit loss model in accordance with ASC 326.

The allowance is measured by applying an aging-based provision matrix over the contractual life of the receivable, considering historical loss experience, current economic conditions, and reasonable and supportable forecasts of future economic conditions.

Year Ended December 31,

Accounts receivable, current

Accounts receivable

Total accounts receivable

allowance for credit losses

( 1,213,165 )

Total accounts receivable, net

In determining the allowance, the Company groups receivables that share similar risk characteristics on a collective basis.

The Company maintains separate receivable pools for its U.S.

and India operations, as these portfolios differ with respect to customer composition, contractual terms, economic environment, and historical loss patterns.

Expected credit losses are estimated separately for each pool and aggregated to determine the consolidated allowance.

Receivables with an indication of increased credit risk are individually assessed.

Receivables are written off when the Company determines that amounts are uncollectible after all collection efforts have been exhausted.

Changes in the allowance for current expected credit losses:

Allowance for expected credit losses

Balance as of January 1, 2024

Period change for current expected credit losses

Balance as of December 31, 2024

Period change for current expected credit losses

Utilization of Expected credit loss

Balance as of December 31, 2025

During the year ended December 31, 2025, one customer individually accounted for more than 10% of the Company’s gross revenue, while the amount due from this customer was not material.

In addition, another customer accounted for less than 10% of gross revenue but represented more than 10% of the Company’s total accounts receivable balance as of December 31, 2025.

During the year ended December 31, 2024, no single customer accounted for more than 10% of the Company’s gross revenue.

As of December 31, 2024, two customers individually accounted for more than 10% of the Company’s total accounts receivable.

One of these customers is considered a related party due to ownership.

Inventories are stated at the lower of cost (determined by average cost method) or net realizable value.

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The Company recognized a provision for inventory shrinkage of $ 0 and $ 23,926 for the years ended December 31, 2025 and 2024.

Inventories consist of parts and finished goods.

Parts primarily consist of manufacturing hardware, wiring, and piping.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Inventories consist of parts and finished goods that include material, labor and manufacturing overhead costs.

Parts primarily consist of manufacturing materials, hardware, wiring, and piping.

Inventories consisted of the following:

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Prepaid expenses and other current assets include prepaid insurance, prepaid rent, and advances to service providers, which are expected to be recognized, received or realized within the next 12 months.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Working capital advances to managed solutions segment customers :

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Property improvements

Land is acquired in connection with the Geo Impex acquisition and is recorded at relative fair value in accordance with ASC 805 and is not depreciated, as it is deemed to have an indefinite useful life.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Major renewals and improvements are capitalized, while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed as incurred.

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Internally Developed Software

As it relates to customer relationships, that pattern is generally based upon the forecasted undiscounted cash flows established at the time of acquisition.

For all other intangible assets, that pattern is generally on a straight line basis.

The Company amortizes its finite-lived intangible assets on a straight-line basis over their estimated useful lives.

Software development costs:

Costs are incurred related to internally developed software that powers the Company’s platforms that are accessed by customers.

The Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms.

Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage.

Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred.

Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized.

The Company follows an agile development methodology, whereby software is developed and enhanced through iterative, feature-by-feature releases for both software capitalized under ASC 350 & ASC 985.

The Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms as per ASC 350, 350-40, Intangibles — Goodwill and Other — Internal-Use Software.

The Company analyses the nature of the development and implementation activities - i.e.

whether Subtopic 350-40 characterizes them as capitalizable application development stage activities - when deciding whether the costs of those activities should be capitalized or expensed as incurred.

Capitalized costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software.

Software development costs, when placed in service, are amortized on a straight-line basis over their estimated useful life upon initial release of the software or additional features.

During the years ended December 31, 2024 and 2023, the Company capitalized costs totaling $ 186,103 and $ 35,588 , respectively.

Software development costs, when placed in service, are amortized on a straight-line basis over the estimated useful life of the software, which is three years , upon initial release of the software or additional features.

During the years ended December 31, 2025 and 2024, the Company capitalized costs amounting to $ 91,217 and $ 91,292 , respectively.

For the costs incurred in developing the firmware embedded in the hardware devices that the Company sells and leases to its customers, the Company applies the principles of FASB Accounting Standards Codification (“ASC”) 985-20, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”).

ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established.

Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the related product.

The Company estimates the useful life of the software to be three ( 3 ) years.

During the years ended December 31, 2025 and 2024, the Company capitalized software development costs totaling $ 0 and $ 94,811 , respectively.

Business combination and asset acquisition:

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

If the screen is met, the transaction is accounted for as an asset acquisition.

If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805 Business Combinations (“ASC 805”), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point.

Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition.

The Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Business combination:

The Company accounts for business combinations using the acquisition method of accounting.

Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value.

Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities.

Determining the fair value of assets acquired, liabilities assumed, and noncontrolling interest requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items.

The results of operations for an acquired business are included in the Company’s consolidated financial statements from the date of acquisition.

The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events.

The obligations for such contingent consideration payments are recorded at fair value on the acquisition date.

The contingent consideration obligations are then evaluated each reporting period.

Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of contingent consideration liabilities in the consolidated statements of operations and comprehensive loss.

If determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the acquiring entity in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given.

No gain or loss is recognized as of the date of acquisition unless the fair value of non-cash assets given as consideration differs from the assets’ carrying amounts on the acquiring entity’s books.

Consideration transferred that is non-cash will be measured based on either the cost (which shall be measured based on the fair value of the consideration given) or the fair value of the assets acquired and liabilities assumed, whichever is more reliably measurable.

Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values.

Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.

Investments in Joint Ventures:

The Company accounts for investments in joint ventures under the equity method of accounting in accordance with ASC 323, Investments—Equity Method and Joint Ventures, when it has the ability to exercise significant influence over the operating and financial policies of the investee but does not control it.

Under the equity method, the Company’s share of the joint venture’s earnings or losses is recognized in the consolidated statements of operations within other income (expense).

The carrying value of equity method investments is reported within other noncurrent assets on the consolidated balance sheets.

The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable.

Transactions and balances related to joint ventures were insignificant for the year ended December 31, 2025 and were not applicable for the year ended December 31, 2024.

Deferred offering costs:

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Offering costs totaling approximately $ 3,960,397 were reclassified to additional paid-in capital upon the closing of the Business Combination (see Note 5).

Impairment of long-lived assets:

Impairment of long-lived assets and finite- lived Intangible asset:

In accordance with ASC 360, Impairment or Disposal of Long-Lived Assets (“ASC 360”), the Company reviews the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.

In performing this assessment, the Company evaluates various indicators of impairment, including (i) significant adverse changes in general economic or market conditions, (ii) adverse changes in the industry or competitive environment, (iii) increases in market-based discount rates, (iv) declines in the Company’s market capitalization relative to its net assets, (v) actual or projected operating results that are below prior expectations, and (vi) entity-specific factors such as changes in business strategy or the manner in which the assets are utilized.

Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets using the projected discounted cash flow method at the asset group level.

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The impairment to be recognized is measured by the amount by which the carrying values of the assets exceed the fair value of the assets.

The Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment on the long-lived assets during the years ended December 31, 2024 and 2023.

Impairment indicators identified at December 31, 2024 were recurring losses for two consecutive years at two subsidiaries and significantly declining sales at one of those subsidiaries.

Impairment indicators at December 31, 2023 were the decisions to wind down the operations of two subsidiaries during the year ended December 31, 2023.

An impairment loss of approximately $ 1,568,000 and $ 157,103 was recognized on goodwill for the years ended December 31, 2024 and 2023, respectively.

An impairment loss of approximately $ 836,000 and approximately $ 25,000 was recognized on intangibles for the years ended December 31, 2024 and 2023, respectively due to covenants not met for a non-compete agreement.

The Company assessed its long-lived assets for impairment indicators as of December 31, 2025 and 2024.

The Company concluded that indicators of impairment existed as of December 31, 2025 and December 31, 2024;

refer to Note 6:

Goodwill and Intangible Assets, net.

The assumptions used in the impairment analyses represent Level 3 inputs.

Impairment of Goodwill :

Goodwill represents an excess of the cost over the fair market value of net assets acquired in business combinations.

In accordance with Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested for impairment at least annually, or more frequently if indicators of potential impairment exist.

Goodwill is tested for impairment at the reporting unit

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company’s reporting units have discrete financial information available, and management regularly reviews the operating results.

For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the Company’s reporting structure.

Our reporting units are the same as our reportable segments and consistent with the reporting units tested for impairment in prior years.

Assets, liabilities and goodwill have been assigned to reporting units based on assets acquired and liabilities assumed as of the date of acquisition.

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments, and financial performance of the reporting units.

If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

Alternatively, the Company may proceed directly to the quantitative test.

Under the quantitative test, the estimated fair value of each reporting unit is compared to it carrying value, including goodwill.

If the carrying value of the reporting unit, including goodwill, exceeds its fair value, an impairment charge equal to excess is recognized, up to the maximum amount of goodwill allocated to that reporting unit.

Refer note 6- Goodwill and Intangible assets, net.

Derivative financial instruments:

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Derivative assets and liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the consolidated balance sheet date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Notes payable and notes payable – related party:

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Convertible notes payable:

The Company evaluates convertible notes payable in accordance with ASC 470, “ Debt with Conversion and Other Options ” (“ASC 470”) to determine if embedded conversion features present in the convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital.

Debt issuance costs are allocated proportionately to the debt host and conversion feature

Convertible notes payable are reflected at fair value as the Company elected to measure these financial instruments with the fair value option.

Each period, the fair value of the convertible notes payable is calculated and the resulting gains and losses from the change in fair value of the convertible notes associated with non-credit components were recognized in income, while the change in fair value associated with credit components were recognized in accumulated other comprehensive income (“AOCI”), and subsequently released from AOCI upon maturity (see Note 10 and Note 14).

The change in fair value (inclusive of any Day 1 Gains or Losses) of $1,572,861 and $ 25,446 was recorded as a component of other income (expense) in the accompanying consolidated statements of operations and comprehensive loss as the change in fair value of the convertible debt was not attributable to instrument specific credit risk during the years ended December 31, 2024 and 2023.

The Company has elected the fair value option under ASC 825-10 to measure its convertible notes payable at fair value at each reporting date, with changes in fair value recognized in the consolidated statements of operations.

As a result of this election, the Company is not required to separately evaluate or bifurcate embedded conversion features under ASC 470, as the entire hybrid instrument is carried at fair value.

Debt issuance costs associated with convertible notes for which the fair value option has been elected are expensed as incurred rather than deferred and amortized.

The change in fair value (inclusive of any Day 1 Gains or Losses) of approximately $ 2,146,000 and $ 1,708,000 was recorded as a component of other income (expense) in the accompanying consolidated statements of operations and comprehensive loss as the change in fair value of the convertible debt was not attributable to instrument specific credit risk during the years ended December 31, 2025 and 2024.

When convertible notes are converted into equity in accordance with their original contractual terms, the Company reclassifies the carrying amount of the liability to equity, and no gain or loss on extinguishment is recognized.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Gains and losses on extinguishment of liabilities:

The Company recognizes gains and losses on extinguishment of liabilities, including accounts payable and debt obligations, with unrelated parties as the difference between the reacquisition price and the net carrying amount of the associated obligation, as a component of other expense (income), net in the consolidated statements of operations.

When a modification or exchange of a debt instrument introduces a substantive conversion option that did not previously exist, the Company accounts for the transaction as an extinguishment of the original debt, with the difference between the net carrying amount and the fair value of consideration issued recognized as a gain or loss on extinguishment.

The Company classifies the gains and losses on extinguishment of liabilities with related parties as a reduction of capital in the accompanying statements of changes in stockholders’ deficit or as a component of other expense (income), net in the accompanying consolidated statements of operations and comprehensive loss based on the facts and circumstances of each extinguishment transaction.

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Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services.

The Company’s revenue is generated from customers located in the U.S, India, the United Kingdom and the United Arab Emirates.

The Company’s revenue is generated from customers located in the U.S.

Revenue is recognized based on a five step model that includes (1) Identification of the contract with a customer, (2) Identification of the performance obligations in the contract, (3) Determination of the transaction price, (4) Allocation of the transaction price to the performance obligations in the contract, (5) Recognition of revenue when, or as, the Company satisfies a performance obligation.

Installation and Maintenance Services

Installation and maintenance services consists of equipment sales, installation of equipment and service agreements associated with equipment sold to customers (i.e., maintenance visits, remote technical support, etc.).

Our installation services encompass both solar energy systems and HVAC solutions, including system design, procurement and delivery of key components, and full installation.

Solar energy system components typically include photovoltaic modules, inverters, battery storage systems, and related equipment, while HVAC installations include heating, ventilation, and air conditioning units, ductwork, and control systems.

These services also include activities required to integrate the systems with existing infrastructure and, where applicable, facilitate connection to the electrical grid.

These services represent multiple performance obligations that are combined into a single unit of accounting.

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Discounts, if any, are generally explicitly stated in a contract as a fixed percentage of the transaction price related to the performance obligations within the contract.

As projects are expected to be completed within one year, the practical expedient to recognize revenue in the amount billable to the end consumer was elected.

Performance obligations related to our managed solutions contracts are generally satisfied over time.

For services transferred over time, revenue is recognized based on amounts invoiced to the end consumer as the Company has concluded that the invoice amount directly corresponds with the value of services provided to the end consumer.

Management considers this a faithful depiction of the transfer of control as services are substantially the same and have the same pattern of transfer over the life of the contract.

As such, revenue related to unsatisfied performance obligations that will be billed in future periods has not been disclosed.

Our operations are organized into two primary categories:

Solar and HVAC installation and maintenance services to customers.

For all installation and maintenance contracts as mentioned above, we recognize revenue over time.

Our over-time revenue recognition begins when the solar power systems and HVAC solutions are fully installed (as it is at this point that control of the assets begins to be transferred to the customer and the customer retains the significant risks and rewards of ownership).

For certain Installation and maintenance services which have significant installation period, we recognize revenue using the input method based on direct costs to install the systems and defer the costs of installation until such time that control of the assets transfers to the customer (installation).

In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred for installation and obtaining the permission to operate, each relative to the total estimated cost to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize.

Cost based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy these certain specific Installation and maintenance contracts and therefore reflect the transfer of goods to a customer under such contracts.

Costs incurred towards contract completion may include costs associated with modules, direct materials, labor, subcontractors, and other indirect costs related to contract performance

Certain specific installation and maintenance contracts with very short installation period are typically completed within one to two weeks, and invoicing generally occurs upon completion of performance.

Given the short-term nature of these contracts, the Company has elected to apply the “as-invoiced” practical expedient under ASC 606-10-55-18, as the invoiced amount corresponds directly with the value of the services transferred to the customer at each billing.

The output method is considered the most faithful depiction of the Company’s performance for these contracts because, unlike the input method used for longer-duration installation and maintenance contracts, the short contract duration and direct correspondence between invoiced amounts and value delivered to the customer make cost-based progress measurement unnecessary.

Accordingly, revenue is recognized in the amount invoiced.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company also sells a range of ConnectM-branded heat pump products directly to customers, including under specific distribution agreements such as with Greentech Renewables.

Revenue from heat pump product sales is recognized at a point in time when control transfers to the customer, which generally occurs upon delivery.

The Company sells solar energy and battery storage systems and heat pump products to residential and commercial customers and recognizes revenue net of sales taxes collected from customers and remitted to government authorities.

During the year ended December 31, 2025, the Company changed its method of measuring progress for revenue recognized over time in its certain Installation and maintenance services with significant installation period from the “as-invoiced” practical expedient to an cost based input method.

Under the revised approach, revenue is recognized based on the Company’s measure of progress toward complete satisfaction of the performance obligation, reflecting the transfer of delivery services to customers as such services are performed.

The change is considered preferable because the cost based input-based method more accurately reflects the pattern of transfer of control and the underlying performance of delivery services and provides greater consistency with the principles of ASC 606 and industry practices for similar service arrangements.

The impact of this change in accounting principle was not material to the Company’s financial statements for the current period.

Accordingly, prior period financial statements have not been retrospectively adjusted.

Logistics Services

Logistic services revenue consists of delivery fees paid by customers for completed deliveries.

The Company generates revenues at the point in time when the products requested by the Company’s customer are delivered to the end destination.

Revenue is generally billed weekly and collected within a week of when a product delivery is completed.

Product sales

Logistics Services

Logistics services revenue consists of delivery fees paid by customers for completed deliveries through DeliveryCircle’s proprietary Decios platform.

DeliveryCircle acts as a principal in its delivery arrangements, as it controls the delivery service before it is transferred to the customer, directs the carriers who perform the deliveries, bears primary responsibility for fulfillment, has discretion in establishing pricing, and assumes inventory and credit risk.

Accordingly, delivery service revenue is presented gross.

Each customer order submitted into the Platform constitutes a single performance obligation representing a delivery service from a single point of origin to a limited number of destinations.

The Company has determined that delivery services qualify for over-time revenue recognition under ASC 606-10-25-27(a), as the customer simultaneously receives and consumes the benefits of DeliveryCircle’s performance as each delivery is performed — the service results in transportation of the customer’s parcels to end locations, and if DeliveryCircle were to cease performing at any point, another provider would not need to reperform the work already completed to date.

The Company measures progress toward satisfaction of the performance obligation using the output method based on deliveries completed, applying the right-to-invoice practical expedient under ASC 606-10-55-18.

Since the duration of each delivery service is short and the invoice amount is contractually determined at the time the order is submitted, the invoiced amount corresponds directly with the value of the Company’s performance completed to date and faithfully depicts the transfer of services.

The output method is considered the most faithful depiction of the transfer of services because each completed delivery represents a discrete, directly observable unit of value transferred to the customer, and the very short performance period makes cost-based input measures unnecessary for faithfully depicting transfer of control.

The transaction price for each delivery order is substantially fixed at the time the order is submitted into the Platform, as the number of items, destination zones, and applicable per-unit rates are established at that point.

Delivery service fees and per-order minimum purchase requirements represent fixed consideration determined on a per-order basis.

Fuel surcharges, while adjusted monthly based on a national average fuel rate, are fixed at the time each order is entered and do not represent variable consideration.

Waiting fees, which are incurred when a carrier waits beyond a specified time at pick-up or drop-off locations, represent variable consideration as the amounts are not determinable until delivery is completed.

The Company includes variable consideration in the transaction price only to the extent that it is probable that a significant reversal in cumulative revenue recognized will not occur when the uncertainty is subsequently resolved.

Given the short-term nature of each delivery, the limited magnitude of waiting fees relative to total delivery fees, and the Company’s historical experience, the constraint on variable consideration has not had a material impact on revenue recognized during the periods presented.

Revenue is generally billed on a weekly basis with payment terms of net 14 days.

The Company excludes from revenue the taxes collected from customers and remitted to government authorities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Change in Accounting Policy.

During the year ended December 31, 2025, the Company changed its method of revenue recognition for its Logistics segment from recognizing revenue at a point in time upon delivery completion to recognizing revenue over time as delivery services are performed, consistent with the as-invoiced practical expedient.

The change is considered preferable because the over-time method more faithfully reflects the continuous transfer of delivery services to customers and provides greater consistency with the underlying principles of ASC 606.

Notwithstanding the change in policy classification, because each delivery performance obligation is completed within a short period (generally within two days or less and often within several hours), the timing of revenue recognition under either method does not result in a materially different pattern or amount of revenue recognized in any reporting period.

Accordingly, the impact of this change was not material to the Company’s financial statements, and prior-period financial statements have not been retrospectively adjusted.

Product sales (Hardware Supply with the embedded software)

Product sales are made to original equipment manufacturers (“OEMs”).

Revenue is recognized upon transfer of control of goods to the customer, which occurs when title to goods is passed and risk of loss is transferred to the customer, which is generally upon shipment of goods to the customer.

Some of the Company’s 4G telematics units include both hardware and embedded software components that function together to deliver the products’ essential functionality.

In these instances, the hardware generally cannot be used apart from the embedded software and is considered one distinct performance obligation.

Revenue is recognized at a point in time upon transfer of control of goods to the customer in accordance with the International Commercial Terms (Incoterms) described in the respective contracts.

Annual maintenance and support services provided to customers for installed hardware/software solutions, including periodic inspection, servicing, and technical support to ensure continued functioning of the systems is recognized over time as maintenance and support services are provided over the contract period, as the customer simultaneously receives and consumes the benefits.

The amount of revenue recognized is net of discounts that the Company may offer to a customer.

Based on historical experience, estimated returns are determined not material as of December 31, 2024 and 2023 and as such no reserve for future estimated returns has been recorded for the years then ended.

Based on historical experience, estimated returns are determined to be not material as of December 31, 2025 and 2024, and as such no reserve for future estimated returns has been recorded for the years then ended.

The Company excludes from revenue taxes collected from customers and remitted to government authorities related to sales of the Company’s inventory.

Shipping and handling costs that are billed to customers are included in net sales.

Software Subscriptions

We derive subscription revenue from software access fees, which comprise subscription fees from customers accessing our IIoT platform.

Our contract terms are generally for a twelve-month term and access fees are billed annually in advance and generally recognized over the term of the service period.

Subscription revenue gives the customer the right to access our platform.

In accordance with ASC 606, a ‘right to access’ license is recognized over the license period.

We derive usage fees based on actual customer users accessing the IIoT platform during a given month.

Usage fees are billed monthly in arrears and recognized in the month the user access offered.

Software Services

The Company provides software manpower consultancy services and software subscriptions through its Transportation segment.

Manpower Consultancy Services .

Software manpower consultancy services include system and software development, implementation, and customization delivered through deployment of technical resources for customer projects.

Contracts may be short-term, project-based arrangements or long-term, annual resource deployment contracts.

The customer simultaneously receives and consumes the benefits of the Company’s performance as the services are rendered.

Revenue from manpower consultancy services is recognized over time using the right-to-invoice practical expedient under ASC 606, as the amounts invoiced correspond directly to the value of services transferred to the customer during each billing period.

Software Subscription Services .

The Company derives subscription revenue from software access fees comprising subscription fees from customers accessing the Company’s IIoT platform.

Subscription revenue gives the customer the right to access the Company’s platform over the contract term, which is generally twelve months .

The customer simultaneously receives and consumes the benefits of the platform access as the service is provided.

Subscription fees are billed periodically monthly, quarterly and annually.

For billing arrangements where invoicing corresponds directly with the value of services provided during each period (e.g., monthly billing), revenue is recognized based on invoiced amounts using the right-to-invoice practical expedient under ASC 606.

For contracts with quarterly or annual billing where payments are received in advance, revenue is recognized on a straight-line basis over the applicable service period, as the customer simultaneously receives and consumes the benefits of the service.

Managed Solutions

Managed solutions revenue represents support services provided to a customer, including human resources management, procurement services, omnichannel marketing and lead generation.

These services represent multiple performance obligations that are combined into a single unit of accounting.

The Company is primarily responsible for fulfilling the promise to provide the specified good or service to the customer.

Through its provision of human resources management services, the Company was determined to have the control over direction the actions of the customer’s employees and as such was also determined to be primarily responsible for fulfilling the promise to provide the customer’s specified good or service to the customer’s end consumer.

Accordingly, the Company is a principal in transactions and presents revenue on a gross basis.

Judgment is required in determining whether the Company is the principal or the agent in the provision of managed solutions services.

The Company evaluates the presentation of revenue on a gross or net basis based on whether it is responsible for fulfilling the promise (gross) or whether the customer is responsible for fulling the promise to the customer’s end consumer (net).

The Company is contractually obligated to provide the service offerings selected by a customer, which as of December 31, 2024 include human resources management, procurement services, omnichannel marketing and lead generation for all customers.

In performing the human resources management services, the Company has complete authority over the customer’s employees as the customer’s employees become employees of the Company, at which point the responsibility of directing the customer’s employees’ actions becomes solely that of the Company.

The Company has the authority to make changes to the pricing guidelines and therefore sets the price of the customer’s products and services to the end consumer.

Additionally, the credit risk associated with collectability of the customer’s end consumer is solely that of the Company based on the terms of the agreements between the Company and the customer.

As a result, the Company acts as the principal by providing the ongoing service support that enables its customers to conduct business without interruption.

The Company’s performance obligation mirrors that of the customer’s performance obligation to the customer’s end consumer.

Accordingly, the Company recognizes revenue based on when the Company’s customer considers its performance obligation is satisfied.

As projects are expected to be completed within one year, the practical expedient to recognize revenue in the amount billable to the end consumer was elected.

Performance obligations related to our managed solutions contracts are generally satisfied over time.

For services transferred over time, revenue is recognized based on amounts invoiced to the end consumer as the Company

Managed solutions revenue represents support services provided to a customer, including human resources and payroll administration, procurement and vendor management, marketing and lead generation, working capital and financing facilitation, and business implementation services including technology platform onboarding.

While each of these services is individually capable of being distinct — as the customer could benefit from each service on its own or together with other readily available resources under

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

has concluded that the invoice amount directly corresponds with the value of services provided to the end consumer.

Management considers this a faithful depiction of the transfer of control as services are substantially the same and have the same pattern of transfer over the life of the contract.

As such, revenue related to unsatisfied performance obligations that will be billed in future periods has not been disclosed.

Pricing for our services is established in the customer contract and is set as a percentage of the customer’s revenue for a week.

ASC 606-10-25-19(a) — the Company has determined that the services are not separately identifiable within the context of the contract under ASC 606-10-25-19(b) and are therefore combined into a single performance obligation.

Specifically, the Company provides a significant service of integrating the individual services into a single, unified managed services model, and is responsible for coordinating, managing, and overseeing all service elements.

The services are highly interdependent and interrelated, are designed to be delivered together, and no individual service provides meaningful standalone benefit within the context of the contract;

removing or modifying any individual service would significantly affect the overall arrangement and the customer’s ability to obtain the intended benefit under the MSA.

Performance obligations related to managed solutions contracts are satisfied over time, as the customer simultaneously receives and consumes the benefits of the services as they are performed, and each period of service is substantially the same with the same pattern of transfer over the life of the contract.

Revenue is recognized based on amounts invoiced to the customer using the right-to-invoice practical expedient under ASC 606, as the amounts invoiced correspond directly to the value transferred to the customer.

Pricing for the Company’s managed solutions services is established in the customer contract and is set as a percentage of the customer’s revenue for a month.

Quarterly, a working capital true-up adjustment may be processed if costs incurred by the customer exceed the percentage of the customer’s revenue.

If a working capital true up adjustment is determined necessary, it is recorded as a reduction of sales, general and administrative expenses as it represents the customer’s reimbursement of costs incurred by the Company.

If a working capital true-up adjustment is determined necessary, it is recorded as a reduction of selling, general and administrative expenses as it represents the customer’s reimbursement of costs incurred by the Company.

Distributed Energy & Renewables (“DER”)

The Company’s Distributed Energy & Renewables (“DER”) segment focuses on the delivery of solar and distributed energy solutions for commercial, residential, consumer, and industrial customers in India through the Company’s Cambridge Energy Resources subsidiary, including project development, engineering, procurement, and construction (“EPC”) services, as well as ongoing energy management.

EPC Services .

The Company provides turnkey EPC services for solar energy and distributed energy installations, including system design, procurement of photovoltaic modules and related equipment, installation, testing, and commissioning.

The equipment and installation services are not distinct within the context of the contract because the Company provides a significant integration service and the customer’s objective is to receive a completed, functional energy system.

Accordingly, equipment supply and installation services are combined into a single performance obligation.

Revenue from EPC contracts is recognized over time using the cost-based input method, as it provides a faithful depiction of the Company’s efforts to satisfy the performance obligation.

Our over-time revenue recognition begins when the solar power systems are fully installed (as it is at this point that control of the assets begins to be transferred to the customer, and the customer retains the significant risks and rewards of ownership).

Power Sales — PPAs and BTS Energy Service Agreements .

A portion of the segment’s revenue is earned through the sale of electricity, measured in kilowatt-hours, pursuant to the terms of Power Purchase Agreements (“PPAs”) and Base Transceiver Station (“BTS”) energy service agreements.

The Company has evaluated its PPA and BTS arrangements and determined that none qualify as leases under ASC 842, Leases , or as derivatives under ASC 815, Derivatives and Hedging .

Accordingly, all such arrangements are accounted for under ASC 606, Revenue from Contracts with Customers .

The Company considers the delivery of energy under PPAs and BTS agreements to represent a series of distinct goods that are substantially the same and have the same pattern of transfer, and revenue is recognized over time using the output method based on energy units delivered.

The Company applies the right-to-invoice practical expedient, as the amount invoiced corresponds directly to the volume of energy delivered multiplied by the applicable contract rate.

Certain of the Company’s PPAs contain fixed rates, while others contain floating or escalating rate provisions that adjust periodically based on contractual terms.

To the extent that contract rates are subject to adjustment based on indices or other variable factors, the resulting variability in consideration is assessed under the variable consideration guidance in ASC 606-10-32-5 through 32-13.

For fixed-rate PPAs and BTS agreements, the transaction price is determinable at contract inception and does not give rise to variable consideration.

For floating-rate arrangements, the Company applies the allocation exception under ASC 606-10-32-40, allocating the variable consideration to the distinct period of energy delivery to which it relates, as the terms of the variable payment relate specifically to the Company’s efforts to satisfy the performance obligation in that period.

Given the nature of the arrangements — where consideration is based on actual energy delivered at contractually specified rates and uncertainty is resolved at the time of each delivery — the constraint on variable consideration under ASC 606-10-32-11 has not had a material impact on revenue recognized during the periods presented.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

PPAs and BTS contracts are generally invoiced on a monthly basis.

Contract Assets and Liabilities

Contract liabilities include deferred revenues related to advanced payments for services and the amount contract billings exceed recognized revenue on a contract.

As of December 31, 2024 and 2023, contract liabilities consisted solely of advanced payments received from customers.

Contract assets include certain costs that were incurred on contracts in advance of the satisfaction of the performance obligation and the amount recognized revenue exceeds contract billings on a contract.

Contract assets consisted of commissions, labor, and material costs that were incurred for projects where the performance obligation was not complete as of December 31, 2024 and 2023.

These costs will be reclassified to cost of revenues and recognized in the same manner as the corresponding performance obligation.

Any costs to fulfill where the period of benefit is less than one year are expensed as incurred.

The portion of contract assets and liabilities that will be recognized within one-year of the reporting periods are reflected within current assets and current liabilities, respectively, on the accompanying consolidated balance sheets.

The remaining portion to be recognized beyond one-year of the reporting period will be recognized as a non-current asset and a non-current liability.

Contract liabilities represent obligations to transfer goods or services to a customer for which the Company has received consideration in advance of performance.

Contract liabilities include advance payments received from customers and amounts billed to customers in excess of revenue recognized to date on the related contract.

As of December 31, 2025 and 2024, contract liabilities consisted solely of advance payments received from customers.

Contract assets represent the Company’s right to consideration in exchange for goods or services that have been transferred to a customer but for which the right to payment is not yet unconditional.

Contract assets arise when (i) revenue recognized to date on a contract exceeds the amount billed to the customer (i.e., unbilled receivables), or (ii) the Company has incurred costs to fulfill a contract in advance of satisfying the related performance obligation.

As of December 31, 2025 and 2024, contract assets consisted of commissions, labor, and material costs incurred for projects where the performance obligation was not yet complete.

These costs will be recognized in cost of revenues in the same period and manner as the corresponding performance obligation is satisfied.

The portion of contract assets and liabilities expected to be recognized within one year of the reporting date is reflected within current assets and current liabilities, respectively, on the accompanying consolidated balance sheets.

The remaining portion expected to be recognized beyond one year is classified as a non-current asset or non-current liability, as applicable.

The following table summarizes the contract asset activity for the years ended December 31, 2025 and 2024:

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Recognition of revenue recorded as a contract liability as of January 1, 2024

( 1,075,911 )

Customer advance payments

1 unchanged sentence

Recognition of revenue recorded as a contract liability as of December 31, 2024

( 1,075,911 )

Adjustments for the cancelled contract

Customer advance payments

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Costs to Obtain a Contract

The Company incurs costs to obtain contracts in the form of commissions paid to its sales personnel, a third party service provided and a third party financing company made available to our customers, which are eligible to be capitalized as an asset and

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

amortized over the life of the contract.

The Company incurs costs to obtain contracts in the form of commissions paid to its sales personnel, a third party service provided and a third party financing company made available to our customers

As all projects are completed within a year, the practical expedient to expense costs to obtain contracts as they are incurred was elected.

The commission and financing fee expenses for the years ended December 31, 2024 and 2023 were $ 608,433 and $ 264,270 , respectively, and are recorded as a component of selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss.

The commission and financing fee expenses for the years ended December 31, 2025 and 2024 were $ 1,853,300 and $ 608,433 ,

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

respectively, and are recorded as a component of selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss.

Costs to fulfill contracts

Costs to fulfill a contract are capitalized when they relate directly to an existing contract or a specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations, and are recoverable.

Such costs generally represent contract setup and fulfillment costs, which include any direct costs incurred at the inception of a contract to enable the delivery of HVAC solutions, solar panels, or related services, including materials, labor, and subcontractor costs directly associated with satisfying the performance obligation.

These costs are expensed as the related revenue is recognized in accordance with the Company’s revenue recognition policy.

The Company determines if an arrangement is a lease at inception of the contract.

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Selling, general and administrative expenses include payroll and benefit costs of employees who are not directly involved with the satisfaction of a performance obligation, facility costs, leasehold improvement amortization, utility costs, repair and maintenance, advertising, insurance, equipment depreciation and professional fees.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Advertising expenses:

Advertising costs are expensed as incurred.

Advertising expenses include the costs incurred to promote the products, services, or brand to the public.

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The Company issues stock option awards to employees and nonemployees.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company utilizes the Black-Scholes model to determine the fair value of the stock option awards, which requires the input of subjective assumptions.

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Comprehensive loss is comprised of net loss and all changes to the consolidated statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders.

For the Company, comprehensive loss for the years ended December 31, 2024 and 2023 consisted of net loss and unrealized loss from foreign currency translation adjustment.

For the Company, comprehensive gain (loss) for the years ended December 31, 2025 and 2024 consisted of net gain (loss) and unrealized gain (loss) from foreign currency translation adjustment.

N et loss per share:

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For the years ended December 31, 2025 and 2024, potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options and warrants (using the treasury stock method) and the conversion of convertible notes payable.

Conversion features of notes payable may have a variable conversion feature, amending the number of conversion shares based on the market price of the stock.

Conversion features of notes payable may have a variable conversion feature, amending the number of conversion shares based on the

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

market price of the stock.

In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.

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Given the Company is in a net loss position for the years ended December 31, 2025 and 2024, there is no difference between basic and diluted net loss per share.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the potentially dilutive securities excluded from the computation of diluted shares outstanding because the effect of including these potential shares was anti-dilutive:

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The function currency for all consolidated entities is the U.S.

dollar, with the exception of one subsidiary which is located in India, whose function currency is the Indian Rupee (INR).

dollar, with the exception of subsidiaries which is located in India, whose function currency is the Indian Rupee (INR).

Assets and liabilities of the Company are translated into the reporting currency using the exchange rate in effect at the consolidated balance sheet dates.

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The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized.

The Company recognizes interest and penalties related to income tax matters in general and administrative expense The Company has not identified any uncertain income tax positions as of December 31, 2024 and 2023.

The Company operates within multiple taxing jurisdictions and in the normal course of business its tax returns are examined in various jurisdictions.

The reversal of the accruals for uncertain tax positions is recorded when examinations are effectively settled, statutes of limitation are closed, or tax laws are changed.

We are no longer subject to U.S.

federal, state and local, or non-U.S.

income tax examinations by tax authorities for years before 2020.

At December 31, 2025 and 2024, the Company did not have any reserves for uncertain tax positions recognized.

The Company’s policy is to recognize interest and penalties related income tax matters in income tax expense.

The Company operates within multiple taxing jurisdictions and in the normal course of business its tax returns are examined in various jurisdictions The Company currently has no federal, state or international tax examinations in progress.

The Company is subject to U.S.

Federal and state income tax examination for tax years 2022 and forward.

Tax returns for years prior to 2022 may remain open with respect to the net operating loss carryforwards that are utilized in a later years, as tax attributes from prior years can be adjusted during an audit of a later year.

We determined that income taxes involve critical accounting estimates because management makes significant estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets, and to the extent that our estimates and assumptions materially change, or if actual circumstances differ materially from those in the assumptions, our financial statements could be materially impacted.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We utilize the asset and liability method for computing our income tax provision.

Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates.

We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance.

Assessing the need for a valuation allowance requires a great deal of judgement and we consider all available evidence, both positive and negative, to determine whether it is more likely than not that our deferred tax assets are recoverable.

We evaluate all available evidence including, but not limited to, history of earnings and losses, forecasts of future taxable income, and the weight of evidence that can be objectively verified.

See Note 17 - Income taxes of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for details of changes in our valuation allowance for the years ended December 31, 2025 and 2024.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

Interest and penalties related to unrecognized tax benefits are recognized within provision for income taxes.

The TCJA also includes provisions for a tax on global intangible low-taxed income (GILTI).

GILTI is described as the excess of a U.S.

shareholder’s total net foreign income over a deemed return on tangible assets, as provided by the TCJA.

In January 2018, the FASB issued guidance that allows companies to elect as an accounting policy whether to record the tax effects of GILTI in the period the tax liability is generated (i.e., “period cost”) or provide for deferred tax assets and liabilities related to basis differences that exist and are expected to affect the amount of GILTI inclusion in future years upon reversal (i.e., “deferred method”).

The accounting policy of the Company is to record any taxes on GILTI in the provision for income taxes in the year it is incurred.

However, the Company has not GILTI inclusion for year ended December 31, 2025.

Recently issued accounting pronouncements, adopted

6 unchanged sentences

The Company adopted ASU 2023-07 effective January 1, 2024, and the adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

Improvements to Income Tax Disclosures- In December 2023, the FASB issued this ASU to update income tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information.

The Company adopted ASU 2023-09 prospectively from January 1, 2025, and the adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements, not yet adopted

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board.

Management periodically reviews newly issued accounting standards to determine their potential impact on the Company’s consolidated financial statements and related disclosures.

ASU 2023-06, Disclosure Improvements:

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The Company is currently evaluating the potential impact of this guidance on its disclosures.

ASU 2023-09, Income Taxes (“ASU 2023-09”), requires disclosure of specific categories and disaggregation of information in the rate reconciliation table and expands disclosures related to income taxes paid.

The new standard is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively.

The Company is currently evaluating the impact, if any, adoption will have on its consolidated financial statements and disclosures.

ASU 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (“ASU 2024-02”) updates accounting standards for revenue recognition (ASC 606), lease accounting (ASC 842), and impairment of long-lived assets (ASC 360).

ASU 2024-02 provides enhanced guidance for estimating variable consideration, accounting for contract modifications, determining lease terms, and simplifying impairment testing for long-lived assets.

It also introduces increased disclosure requirements for financial instruments and derivatives.

ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact, if any, adoption will have on its consolidated financial statements and disclosures.

ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), requires public companies to disaggregate key expense categories, such as inventory purchases, employee compensation and depreciation in their financial statements.

This aims to improve investor insight into company performance.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the impact, if any, adoption will have on its consolidated financial statements and disclosures.

The Company does not believe that any other recently issued accounting pronouncements not yet adopted will have a material effect on its consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In March 2024, the SEC issued its final climate disclosure rules (Rule 1), which require the disclosure of climate-related information in annual reports and registration statements, beginning with annual reports for the year ending December 31, 2025.

The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material.

We are currently evaluating the impact of the new rules and continue to monitor the status of the related legal challenges.

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.

In November 2024, the FASB issued this ASU that requires more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expense and depreciation expense.

The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The guidance does not affect recognition or measurement in our consolidated financial statements.

ASU 2024-04 Debt - Debt with Conversion and Other Options - Induced Conversions of Convertible Debt Instruments.

In November 2024, the FASB issued this ASU which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or extinguishments.

The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06.

We are currently evaluating the impact this guidance will have on our consolidated financial statements.

In May 2025, the FASB issued Accounting Standards Update No.

2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”).

ASU 2025-03 changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities.

The new guidance requires considering the factors used for other acquisition transactions to assess which party is the accounting acquirer.

ASU 2025-03 is effective for the Company’s annual reporting periods beginning on January 1, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

In May 2025, the FASB issued Accounting Standards Update No.

2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts With Customers (Topic 606):

Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”).

ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and clarifies that the variable consideration constraint in Topic 606 does not apply to share-based consideration payable to customers.

The new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting conditions and ensuring alignment with Topic 606 and Topic 718.

ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06- Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which is intended to simplify the capitalization guidance for internal-use software by removing references to project stages and clarifying when the capitalizing of eligible costs is required.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years.

Early adoption is permitted.

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have had a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

The Company does not believe any other new accounting pronouncements issued by the FASB that have not become effective will have a material impact on its consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GOING CONCERN

The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

As of December 31, 2024, the Company had cash of approximately $ 2,408,000 .

The Company had a working capital deficit of approximately $ 26,247,000 at December 31, 2024.

The Company incurred a net loss and generated negative cash flow from operating activities of approximately $ 22,508,000 and $ 5,959,000 , respectively, for the year ended December 31, 2024.

These are indicators of substantial doubt as to the Company’s ability to continue as a going concern for at least one year from issuance of these consolidated financial statements.

The Company’s ability to continue as a going concern is dependent upon the management of expenses and ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.

On May 6, 2025, the Company received a determination letter (the “Delisting Notification”) from the Nasdaq Hearings Advisor stating that the Panel has determined to delist the Company’s common stock, par value $ 0.0001 per share from the Nasdaq Capital Market, and Nasdaq suspended the trading of the Company’s Common Stock on May 7, 2025 because the Company has not demonstrated compliance with the MVLS Rule, nor does it meet any of the alternative requirements under Nasdaq Listing Rule 5550(b) and has failed to demonstrate that additional time to regain compliance is appropriate.

As of the date of this filing, the Company has not made certain scheduled payments under the SEPA Convertible Note and is therefore in technical default under the agreement.

However, Yorkville has not issued a formal notice of default, and the Company remains in ongoing discussions with Yorkville regarding a potential resolution and restructuring of the outstanding obligations.

The Company is required to maintain a minimum cash balance equal to the lesser of (a) $ 2,000,000 and (b) the sum of the next three Installment Payments, as defined in the promissory note, coming due.

As of December 31, 2024, the minimum cash balance required was approximately $ 833,000 .

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

If additional equity or debt financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all.

If the Company is unable to raise additional capital on acceptable terms when needed, its results of operations and financial condition would be materially and adversely affected.

Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact the Company’s business.

Based on the foregoing, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities should the Company be unable to continue as a going concern.

Conditions and Events Raising Substantial Doubt

As of December 31, 2025, the Company had cash of approximately $2,904,000 and a working capital deficit of approximately $ 24,739,000 .

The Company incurred a net loss of approximately $ 16,058,000 and net cash used in operating activities of approximately $ 9,792,223 for the year ended December 31, 2025.

In addition, the Company’s common stock was delisted from the Nasdaq Capital Market in May 2025, which may limit access to capital markets and adversely impact the Company’s ability to raise additional financing.

These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

Management’s Evaluation

Management has evaluated the significance of these conditions in relation to the Company’s ability to meet its obligations as they become due within one year after the issuance date of these consolidated financial statements.

The Company’s recurring losses from operations, negative operating cash flows, working capital deficit and limited liquidity are expected to continue to require additional funding to support ongoing operations and satisfy existing obligations.

The delisting of the Company’s common stock further constrains access to capital and may increase the cost of financing.

As a result, management has concluded that, absent the successful execution of its plans, the Company may be unable to meet its obligations as they become due.

Management’s Plans to Alleviate Substantial Doubt

Management is actively pursuing multiple initiatives intended to improve liquidity and support the Company’s ability to continue as a going concern, including:

● raising additional capital through equity and/or debt financing arrangements;

● continuing to expand revenue-generating activities across its Owned Service Network, Managed Solutions, Distributed Energy & Renewables and Transportation segments;

● improving operating margins through cost management initiatives, including reductions in discretionary spending and optimization of operating expenses;

● pursuing strategic partnerships, customer contracts and other business arrangements to enhance cash flows.

While management believes these plans are reasonable and within its control, there can be no assurance that such plans will be successfully implemented or will generate sufficient liquidity to meet the Company’s obligations.

Accordingly, substantial doubt about the Company’s ability to continue as a going concern remains.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

REVERSE RECAPITALIZATION

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Upon the closing of the Business Combination, MCAC’s certificate of incorporation was amended and restated to, among other things, set the total number of authorized shares of capital to 110,000,000 shares, of which 100,000,000 were designated as common stock, $ 0.0001 par value per share, and of which 10,000,000 shares were designated as preferred stock, $ 0.0001 par value per share.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Immediately prior to the closing of the Business Combination,

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Legacy Options are granted under the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) (see Note 10), and as such are excluded from the Share Consideration.

Outstanding warrants to purchase shares of Legacy ConnectM common stock (“Legacy Warrants”) converted into warrants for shares of the Company’s common stock upon the same terms and conditions that were in effect with respect to the Legacy Warrants immediately prior to the Business Combination after giving effect to the Exchange Ratio (see Note 12).

Outstanding warrants to purchase shares of MCAC Class A common stock will remain outstanding at the Closing Date.

The warrants will become exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation (see Note 12).

In connection with the Business Combination,

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● certain MCAC shareholders who held rights issued at MCAC’s IPO automatically received 920,000 shares of MCAC Class A common stock, which was one-tenth of one share of MCAC common stock.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

● an investor purchased 3,248,466 shares of MCAC Class A common stock on the Closing Date in the open market from certain MCAC shareholders from those who elected to redeem shares of MCAC pursuant to the terms of a forward purchase agreement entered into effective December 31, 2022 (see Note 14).

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S.

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In addition, the Company incurred offering costs of $ 3,968,063 , which were also treated as a reduction of additional paid in capital.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of changes in stockholders’ deficit for the year ended December 31, 2024:

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Net Business Combination financing

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The number of shares of the Company’s common stock issued immediately following the consummation of the Business Combination were:

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The number of Legacy ConnectM shares was determined as follows:

Legacy ConnectM shares

Legacy ConnectM shares, effected for Exchange Ratio

Recapitalization applied to common stock outstanding at December 31, 2022

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Shares of common stock reserved for issuance for the exercise of the Legacy Options and Legacy Warrants totaled 473,929 and 77,494 , respectively, after giving effect for the Exchange Ratio.

BUSINESS COMBINATIONS

Amperics Acquisition

On November 3, 2025, the Company completed the acquisition of certain assets of Amperics Holdings LLC and Amperics Inc.

(collectively, “Amperics”) pursuant to an Asset Purchase Agreement.

The sole asset acquired was proprietary technology related to Amperics’ nanotechnology-based energy-storage business, which will be integrated into Keen Labs, the Company’s AI and technology subsidiary.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company issued 2,700,000 shares of common stock to the seller in exchange for the acquired proprietary technology of Amperics, valued at the closing market price of $ 0.32 per share on the acquisition date, for a total purchase consideration of approximately $ 864,000 .

No cash was paid.

The agreement contains no earn-outs or other contingent consideration.

Proprietary know-how and technical documents

Total assets acquired

The only asset acquired in the Transaction was the proprietary technology (including proprietary know-how and technical documentation) with a useful life of 10 years .

We assumed only post-closing obligations under the assumed contracts and assigned intellectual property.

All pre-closing liabilities, taxes, indebtedness, and other obligations remained with the sellers.

The transaction was evaluated under ASC 805 and was accounted for as an asset acquisition.

Further, in accordance with ASC 280, Segment Reporting, the Company has concluded that Amperics is included within “Others” as it does not meet the quantitative thresholds to qualify as a reportable segment.

Geo Impex Acquisition

On November 3, 2025, we acquired control of Geo Impex through an Exchange and Acquisition Agreement.

Under the agreement, (i) We acquired approximately 86.22 % of the voting equity interests of Geo Impex India in exchange for newly issued shares of our common stock and promissory notes indirectly through our wholly owned subsidiary in India.

The remaining 13.78 % is held by third-party shareholders and is reported as non-controlling interest of $ 984,025 .

As part of the consideration, we issued 33,300,000 shares of our common stock valued at approximately $ 10,656,000 based on the closing price on the acquisition date and a promissory note with a principal amount of $ 788,900 for a total purchase price of $ 11,444,900 .

The agreement contains no earn-outs or other contingent consideration.

The number of shares issued is subject only to an equitable adjustment for stock splits between signing and closing.

The promissory note has a fixed principal and no variable features.

The transaction was evaluated under ASC 805, Business Combinations.

The Company concluded that the transaction did not meet the definition of a business combination and was accounted for as an asset acquisition under U.S.

The allocation of purchase consideration to identifiable assets (including land and related rights) and liabilities have been determined based on their relative fair values at the acquisition date.

No goodwill was recognized.

Total fair value of the consideration transferred was approximately $ 12,428,924 allocated as follows:

Date of Acquisition(s)

November 03, 2025

Prepaid expenses and other current assets

Property and equipment, net

Total assets acquired

Accounts payable

Debt, net of current portion

Deferred tax liabilities

Total liabilities assumed

Net assets acquired

Non-controlling interest

The total cost of the acquisition comprising the fair value of the consideration transferred and the non-controlling interest — was allocated to the qualified and other identifiable assets and liabilities assumed on the basis of fair values / book value as applicable.

Further, in accordance with ASC 280, Segment Reporting, the Company has concluded that Geo Impex is included within “Corporate & Strategic Assets” as it meets the quantitative thresholds to qualify as a reportable segment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ATS and SESB acquisitions

On April 28, 2025, the Company entered into a stock purchase agreement with W4 Partners LLC (the “Seller”), for the purposes of acquiring from the Seller all of the issued and outstanding equity securities of Air Temp Service Co, Inc.

(“ATS”) and Solar Energy Systems of Brevard, Inc (“SESB”).

ATS is engaged in the business of the maintenance, repair, installation and sale of residential and commercial heating and cooling systems and other products and related services and SESB is engaged in the business of the maintenance, repair, installation and sale of solar heating systems and related services.

Prior to the closing of this acquisition, both ATS and SESB were customers in the Company’s Managed Solutions reporting segment.

In connection with the transaction, the Company:

● Issued 2,200,000 shares of its common stock at closing, and

● Issued an additional 2,700,000 shares upon the Company’s delisting from Nasdaq on May 7, 2025 (within 90 days of closing), as required under the Stock Purchase Agreement.

The transaction was evaluated under ASC 805, Business Combinations.

The Company concluded that substantially all of the fair value of the gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets.

In addition, the acquired set includes inputs, a substantive process (an organized workforce capable of producing outputs), and outputs.

Accordingly, each of ATS and SESB meets the definition of a business, and the acquisitions were accounted for using the acquisition method under ASC 805.

Contingent Consideration:

The contingent share issuance ( 2,700,000 shares triggered by Nasdaq delisting within 90 days ) was evaluated under ASC 480 and ASC 815-40 and classified as equity.

The arrangement is indexed to the Company’s own stock (fixed number of shares, not a fixed monetary value) and meets the equity classification criteria under ASC 815-40-25 (settlement in shares only, no cash settlement provision, sufficient authorized shares).

Equity-classified contingent consideration is not remeasured subsequent to the acquisition date.

The additional shares were recognized at fair value on the date of the delisting event, with the change from the acquisition-date fair value recorded as a measurement-period adjustment to goodwill.

The total fair value of consideration transferred was approximately $ 3,646,839 and consisted of the fair value of 4,900,000 shares of the Company’s common stock issued to the Seller, adjusted for the settlement of a preexisting relationship, as detailed below:

Fair value of common stock issued ( 2,200,000 shares at $ 0.6534 )

Fair value of common stock issued ( 2,700,000 shares at $ 0.6534 )

Total fair value of shares issues

Settlement of preexisting relationship (accounts receivable / payable)

Total Consideration

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the shares was determined based on the Company’s closing stock price on the respective dates of obligation.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Date of Acquisition(s)

April 28, 2025

Accounts receivable

Prepaid expenses and other current assets

Property and equipment, net

Right-of-use asset – operating lease

Customer relationships

Total assets acquired

Accounts payable

Accrued expenses and other current liabilities

Debt, net of debt discount

Contract liabilities

Operating lease liabilities

Debt, net of current portion

Total liabilities assumed

Net assets acquired

The fair value of acquired customer relationships was estimated using a discounted cash flow approach based on projected earnings attributable to these relationships, with estimated useful lives of 15 years and 11 years for ATS and SESB, respectively.

The fair value of acquired trade names was estimated using a relief-from-royalty method under the income approach, with estimated useful lives of 10 years for both ATS and SESB.

Working capital items and property and equipment were recorded at carrying value, which approximated fair value due to their short-term nature.

Deferred revenue (contract liabilities) was recognized at carrying value in accordance with ASU 2021-08.

Goodwill recognized in connection with the acquisitions primarily reflects the Company’s ability to generate synergies through the integration of these businesses, expand and deepen customer relationships, establish beachheads in strategic geographies, and realize operational efficiencies that are not separately recognized as identifiable intangible assets.

In accordance with ASC 280, Segment Reporting, the company has assessed ATS and SESB acquisitions to be part of the Owned Service Network.

CER acquisition

On April 25, 2025, ConnectM Technology Solutions Pvt.

(“ConnectM India” or “CMI”), a wholly owned subsidiary of the Company, acquired 100 % of the equity shares of Cambridge Energy Resources Pvt.

(“CER”) and controlling interests in its two subsidiaries and one joint venture with equal control:

(i) CER Microgrids Private Limited (“CER Microgrids”) ( 100 %), (ii) CER Rooftop Private Limited (“CER Rooftop”) ( 55.64 %), and (iii) CER Renewtech Private Limited (“CER Renewtech”) ( 50 %).

This acquisition was executed under a court-supervised insolvency resolution plan approved by India’s National Company Law Tribunal (“NCLT”) under the Insolvency and Bankruptcy Code, resulted into a bargain purchase gain of approximately $ 2,121,079 which was reported in the accompanying Consolidated Statement of Operations and other comprehensive loss.

Prior to acquisition, CER was under financial distress and undergoing insolvency proceedings.

Under the NCLT-approved resolution plan:

All outstanding equity shares of CER were cancelled, and ConnectM India became the sole legal and beneficial owner of CER as of the acquisition date.

Certain liabilities were restructured and settled in accordance with the approved resolution plan.

Control of operations, assets, and liabilities was transferred to ConnectM India at values established in the approved resolution plan.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ConnectM India committed to provide approximately $ 1,137,818 as a capital infusion in exchange for all of CER’s equity, of which approximately $ 719,897 had been funded as of December 31, 2025, with the remaining payments due for payment along with late payment surcharge levied at 9 % p.a.

Pursuant to the court-approved resolution plan, these funds were used to settle approved creditor claims and to recapitalize CER.

CER expands the Company’s operating presence in India’s rooftop solar distributed energy (solar and battery) and telecommunications enterprise energy-management sectors.

Based on review of existing segments in accordance with ASC 280 – Segment Reporting, the operations of CER are included within the ‘Distributed Energy & Renewables’ segment.

CER provides enterprise infrastructure solutions, including the setup, operation, and maintenance of rooftop and ground-based mobile network towers, primarily serving the telecommunications sector.

Through its subsidiaries, CER also delivers distributed energy solutions for telecommunications towers, including energy storage, backup power, and hybrid microgrid systems to ensure uninterrupted tower operations.

CER Rooftop focuses on the installation and maintenance of rooftop towers for telecommunications providers, while CER Microgrids develops and operates battery storage and hybrid microgrid systems that complement the Company’s broader solar and battery offerings.

The Company determined that the fair value of the consideration transferred as of the acquisition date was $ 1,108,640 .:

Settlement of liabilities with NCLT plan

Deferred consideration

Present value of deferred consideration

The Company estimated the fair value of acquired assets and liabilities as of the effective time of the business combination based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses.

As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Business Combination.

The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized.

Final determination of the fair values may result in further adjustments to the values presented in the following table.

Presented below is the purchase price allocation for the acquisitions noted above.

Date of Acquisition(s)

April 25, 2025

Accounts receivable

Prepaid expenses and other current assets

Property and equipment, net

Customer relationships

Total assets acquired

Accounts payable

Accrued expenses and other current liabilities

Deferred tax liability

Total liabilities assumed

Net assets acquired

Bargain purchase gain

Non-controlling interest

The fair value of the customer relationship intangible asset at CER Rooftop was estimated using the multi-period excess earnings method (“MPEEM”), which isolates the cash flows attributable specifically to the customer relationship after deducting contributory asset charges, and has been assigned an estimated useful life of 25 years .

The valuation considered projected revenues from existing customers under long-term power purchase arrangements, expected operating margins, contributory asset charges, and a discount rate

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

of approximately 20 %.

The customer relationship intangible has been recognized separately from goodwill in accordance with ASC 805-20-25-10.

The acquired accounts receivable were recorded at fair value, representing amounts that have subsequently been collected or are expected to be collected from customers.

Property and equipment acquired primarily represent installation and service equipment located at CER and its subsidiaries.

Further, in accordance with ASC 280, Segment Reporting, the company has assessed CER acquisitions to be part of the Distributed Energy & Renewables segment.

Delivery Circle

1 unchanged sentence

DC is engaged in the business of providing dispatch and delivery services and related software.

Pursuant to the Purchase Agreement, ConnectM purchased from the Seller certain membership interests in DC, comprised of 842,157 Class A Units, 207,843 Class P Units and 3,063 Series A Units (the “Acquired Interests”), which account for forty-six percent ( 46.0 %) of the equity interests and fifty-seven percent ( 57.0 %) of the voting interests of DC.

In addition, in connection with ConnectM’s acquisition of the Acquired Interests, ConnectM will have the right to appoint four out of the seven voting members to DC’s board of directors.

Pursuant to the Purchase Agreement, ConnectM purchased from the Seller certain membership interests in DC, comprised of 842,157 Class A Units, 207,843 Class P Units and 3,063 Series A Units (the “Acquired Interests”), which account for approximately forty-six percent ( 46.0 %) of the equity interests.

In addition, in connection with ConnectM’s acquisition of the Acquired Interests, ConnectM will have the right to appoint four out of the seven voting members to DC’s board of directors, who will be having power to take all the decisions of operations of the entity.

ConnectM purchased the Acquired Interests in exchange for $ 520,000 cash consideration plus contingent consideration.

1 unchanged sentence

The Company used a Monte Carlo simulation model to calculate the contingent consideration’s fair value of approximately $ 575,690 (see Note 14).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the purchase consideration in the acquisition is as follows:

8 unchanged sentences

Total identifiable net assets

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

After allocating the purchase price to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, the Company recorded goodwill of approximately $ 791,000 .

8 unchanged sentences

The Company recorded a payable for the cash consideration the date of closing and subsequently paid $ 350,000 in December 2024.

As of December 31, 2024, the unpaid cash consideration payable totaled $ 170,000 and is included as a component of accounts payable on the accompanying consolidated balance sheets.

As of December 31, 2025, there was no unpaid cash consideration outstanding, as the full amount had been paid.

In January 2025, the Company entered into a promissory note (the “January 2025 Note”) with the individual from whom the Company acquired a business from in August 2024 which converts the unpaid cash consideration of $ 170,000 and accrued interest of approximately $ 6,000 from accounts payable to a sellers note that matures on June 30, 2025.

1 unchanged sentence

An event of default is to have occurred if the unpaid principal and accrued interest thereon is not paid in full prior to the maturity date, if the Company makes an assignment for the benefit of creditors, or if the Company files for bankruptcy or another similar proceeding.

As of June 30, 2025, the original principal of approximately $ 176,000 and accrued and unpaid interest of approximately $ 14,000 remained outstanding.

In July 2025, the Company entered into the first amendment to the January 2025 Note (the “Amended January 2025 Note”), under which the Company is required to pay the lender approximately $ 26,000 towards the principal, approximately $ 14,000 of accrued interest, and the lender’s legal fees of approximately $ 3,000 .

The Amended January 2025 Note extended the maturity date from June 30, 2025 to August 8, 2025 and increased the interest rate to 18.0 % effective July 1, 2025.

In August 2025, the Company entered into a Second Amendment to the January 2025 Note (the “Second Amended January 2025 Note”), which extended the maturity date from August 8, 2025 to September 30, 2025 and required payment of an approximately $ 10,000 forbearance fee to the lender.

These seller notes extensions were accounted for as debt modifications under ASC 470.

On October 21st, 2025, the Company fully repaid the note with a payment of $ 153,126 , consisting of $ 149,790 in principal and $ 3,336 in accrued interest.

Following this payment, the note was retired in full and all related obligations were satisfied.

In accordance with ASC 280, Segment Reporting, the company has assessed Delivery Circle to be part of the Logistics segment.

Green Energy Gains

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company common stock with a fair value of $ 161,440 as determined using the closing share price on the date of issuance.

On October 9, 2024, ConnectM entered into a purchase agreement with the owners of Green Energy Gains (“GEG”), whereby the Company has acquired all of the issued and outstanding capital stock of GEG in exchange for the issuance of 160,000 shares of the Company common stock with a fair value of $ 161,440 as determined using the closing share price on the date of issuance.

As of acquisition date, one of the indirect owners of GEG was also the related party investor of the Company (see Note 15).

3 unchanged sentences

In connection with the acquisition, the pre-existing obligations owed to the Company from GEG were settled and total consideration was increased accordingly.

In accordance with ASC 280, the company has assessed Green Energy Gains to be part of the Owned Network Service.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the purchase consideration in the acquisition is as follows:

20 unchanged sentences

The two members of Srimulli Renewables LLC are also ConnectM shareholders, each holding more than 4.9 % of total shares outstanding.

The results of these acquired entities are presented within the Company’s operating segments as follows:

● ATS – reported within the Owned Service Network segment.

ATS contributed approximately $ 1,288,000 and $ 483,000 of revenue and net loss respectively from the acquisition date through December 31, 2025.

● SESB – reported within the Owned Service Network segment.

SESB had $ 0 and $ 225,000 revenue and net loss respectively from the acquisition date through December 31, 2025.

● CER – reported within the Distributed Energy & Renewables segment.

CER contributed approximately $ 128,000 and $ 369,000 of revenue and net loss respectively from the acquisition date through December 31, 2025.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Service Network

Transportation

Balance as of January 1, 2023

Balance as at December 31, 2023

Balance as at January 1, 2024

( 1,568,309 )

1 unchanged sentence

Balance as at December 31, 2024

Balance as at December 31, 2025

Goodwill is not amortized but is tested for impairment at least annually, or more frequently if events occur or circumstances change that indicate the carrying amount of the related reporting unit may not be recoverable.

For the year ended December 31, 2025, goodwill was recognized in connection with the Company’s acquisition of Air Temp Service Co., Inc.

(“ATS”) and Solar Energy Systems of Brevard, Inc.

ASC 350, Intangibles - Goodwill provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount.

If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the one-step quantitative impairment test, otherwise no further analysis is required.

An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the one-step quantitative impairment test.

The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether an entity chooses to perform the qualitative assessment or proceeds directly to the one-step quantitative impairment test.

As permitted under ASC 350, Intangibles—Goodwill and Other , the Company elected to first perform a qualitative assessment of goodwill impairment for each of its reporting units for the year ended December 31, 2025 to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

For Owned Service network (‘OSN’) reporting unit, the qualitative assessment indicated that it was more likely than not that the fair value could be less than the carrying amount, and accordingly, a quantitative impairment test was performed.

For Logistics reporting unit, the qualitative assessment did not indicate potential impairment, and therefore no quantitative test was necessary.

Under the quantitative approach, the Company estimated fair value of the reporting unit using discounted cash flow model under income approach.

The resulting fair value measurements are classified within Level 3 of the fair value hierarchy because they rely on significant unobservable inputs and reflect management’s own assumptions about the views of market participants.

Under the income approach, the fair value of each reporting unit is based on the present value of estimated future cash flows.

The income approach is dependent on a number of significant management assumptions including the discount rate, revenue growth rates, and projected EBITDA margins.

We estimate future cash flows for each of our reporting units based on our projections for the respective reporting unit.

These projected cash flows are discounted to the present value using a weighted average cost of capital (discount rate).

The discount rate is commensurate with the risk inherent in the projected cash flow and reflects the rate of return required by an investor in the current economic conditions.

For our annual impairment test, we used a discount rate of 20 % for OSN reporting unit.

An increase or decrease of 5 % in the discount rate would have impacted the estimated fair value of each reporting unit by approximately $ 2,300,000 .

The projections are based on both past performance and the expectations of future performance and assumptions used in our current operating plan.

We use specific revenue growth and EBIDTA margins for reporting unit based on history and economic conditions.

Under the market approach, the fair value of each reporting unit is determined based upon comparisons to public companies engaged in similar businesses and is dependent on the significant management assumption for the selection of multiples.

The Company recorded a goodwill impairment of $ 0 and $ 1,568,309 during the twelve months ending December 31, 2025, and December 31, 2024 respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets, net

As of December 31, 2025, the Company performed an evaluation of its long-lived intangible assets to determine whether events or changes in circumstances indicated that their carrying amounts may not be recoverable in accordance with ASC 360.

In conducting this assessment, the Company considered multiple impairment indicators, including (i) significant adverse changes in general economic or market conditions, (ii) adverse changes in the industry or competitive environment, (iii) increases in market-based discount rates, (iv) declines in the Company’s market capitalization relative to its net assets, (v) actual or projected operating results that are below prior expectations, and (vi) entity-specific factors such as changes in business strategy or the manner in which assets are utilized.

For ATS, the primary trigger, consistent with ASC 360-10-35-21(f), was the subsequent strategic transfer of the HVAC business assets and operations and associated intangibles at no consideration, resulting in expected early disposal.

For the SESB asset group, impairment indicators were identified in accordance with ASC 360-10-35-21(a)–(e) due to lower-than-projected 2025 revenue, reduced utilization resulting from the strategic decision to scale down solar operations in Florida, and adverse changes in the regulatory and industry environment affecting expected cash flows.

Based on this evaluation, the Company concluded that impairment indicators were present, primarily associated with the ATS and SESB asset groups.

Accordingly, a recoverability test was performed.

The results indicated that the carrying amounts of these asset groups were not recoverable, as the estimated undiscounted future cash flows were less than their respective carrying values.

As a result, the Company recognized a full impairment charge of approximately $ 548,000 for the year ended December 31, 2025, reducing the carrying value of the trade name and customer relationship intangible assets related to ATS and SESB to zero .

This non-cash impairment charge was recorded within the intangible asset impairment expense in the consolidated statements of operations and comprehensive loss.

The assumptions used in estimating the undiscounted future cash flows are based on currently available data and management’s best estimates of future income statement and working capital elements.

A change in market conditions or other factors could have a material effect on the estimated values.

Fair value was determined based on discounted cash flows requiring judgement.

These factors include, among others, the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies and market multiples.

The measurements used in the impairment review of finite-lived intangible assets are Level 3 measurements.

There are inherent uncertainties related to the assumptions used and to management’s application of these assumptions.

Identifiable intangible assets consist of the following at December 31, 2025:

Weighted Average Remaining Amortization Period (years)

Accumulated Amortization

Weighted Average Remaining

Period (years)

Customer relationships

Noncompetition agreements

( 1,020,532 )

Noncompetition agreement

Intellectual property

Acquired technology

Intangible assets:

Proprietary technology

Internally developed software

Intangible assets:

Developed technology

Total intangible assets, net

( 2,238,818 )

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Identifiable intangible assets consist of the following at December 31, 2024*:

Accumulated Amortization

Weighted Average

Remaining Amortization

Period (years)

Customer relationships

1 unchanged sentence

Intellectual property

Acquired technology

Internally developed software

Total intangible assets, net

( 1,127,928 )

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

* Prior period amounts are presented on a net basis and reflect the impact of an $ 835,319 impairment charge on intangible assets recorded during the year ended December 31, 2024.

This presentation has no impact on the consolidated financial statements as the net carrying value of the reported assets remains unchanged.

Intangible assets are amortized over their estimated useful lives of 3 to 25 years using the straight-line method.

Amortization expense was $ 480,012 and $ 517,175 for the years ended December 31, 2024 and 2023, respectively.

Amortization expense was approximately $ 424,000 and $ 480,000 for the years ended December 31, 2025 and 2024, respectively.

Amortization expense over the next five years and thereafter is as follows:

Year ending December 31,

The above does not include $ 168,397 of capitalized costs for internally developed software that are still in the development stage and not subject to amortization.

As of December 31, 2024, the weighted average remaining amortization period of intangible assets is approximately 7.3 years.

The Company recorded a goodwill and intangible impairment of $ 2,403,628 and $ 181,853 during the twelve months ending December 31, 2024, and December 31, 2023

Years ending December 31,

The above amounts do not include $ 160,400 of capitalized costs for internally developed software that are still in the development stage and not yet subject to amortization.

As of December 31, 2025 and 2024, unamortized software development costs for software capitalized under ASC 985-20 amounted to $ 57,002 and $ 92,361 respectively.

Total amortization charged for software capitalized under ASC 985-20 was $ 35,359 and $ 35,359 for the year ended December 31, 2025 and 2024, respectively.

For the years ended December 31, 2025 and 2024, the Company recognized an impairment charge of $ 548,492 and $ 836,000 respectively related to intangible assets.

PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following at fair value as of December 31:

Property and equipment consist of the following as of December 31:

Furniture and fixtures

3 unchanged sentences

Accumulated Depreciation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2025, the Company recorded a loss on disposal of approximately $ 28,000 for a vehicle that was repossessed by the lender.

The Company reduced the carrying value of the associated vehicle loan by the estimated fair value of the vehicle of approximately $ 56,500 as of the date of the repossession.

During the year ended December 31, 2023, the Company abandoned vehicles with a net book value of $ 29,242 which is included in selling, general and administrative expenses on the accompanying consolidated statements of operations.

Depreciation expense was $ 265,652 and $ 259,222 for the years ended December 31, 2024 and 2023, respectively.

ACCUMULATED OTHER COMPREHENSIVE INCOME

Shareholders’ equity includes certain items classified as accumulated other comprehensive income in the Consolidated Balance Sheets, including:

● Cumulative translation adjustment (CTA) relates to our non-U.S.

subsidiary companies that have designated a functional currency other than the U.S.

We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates.

This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

The Company recorded $ 166,007 and $ 114,624 of accumulated other comprehensive income as of December 31, 2024 and December 31, 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2024, the Company recorded a loss on disposal of approximately $ 8,000 for a vehicle that was repossessed by the lender.

The Company reduced the carrying value of the associated vehicle loan by the estimated fair value of the vehicle of approximately $ 23,000 as of the date of the repossession.

Depreciation expense was approximately $ 420,000 and $ 266,000 for the years ended December 31, 2025 and 2024, respectively.

CONVERTIBLE DEBT

Convertible debt consisted of the following as of December 31:

Amended 2022 Convertible Notes

The fair value of convertible debt as on December 31:

2025 convertible notes

2024 convertible notes

Assumed 2024 Note

Assumed 2024 notes

SEPA Convertible note

Convertible notes payable

2022 and 2023 Convertible Notes

In September of 2022, the Company issued convertible notes for gross proceeds of $ 1,350,000 , as amended on February 22, 2023 to clarify the mechanics of the conversion feature (the “Amended 2022 Convertible Notes”).

The Amended 2022 Convertible Notes include an automatic conversion upon the occurrence of a Qualified Financing (as defined in the agreement), whereby the Amended 2022 Convertible Notes convert at a quotient, the numerator of which is the entire principal of the convertible notes and any interest accrued and the denominator is the lesser of 80 % of the price per share to be sold in a financing event, or $ 7.00 per share, adjusted for stock dividend, stock split, combination, or other similar recapitalization with respect to such class or series.

The amendment was accounted for as a modification.

The Amended 2022 Convertible Notes mature on the earlier of two years from the date of issuance (September 2024), or upon the consummation of a Qualified Financing.

Interest is charged at an annual simple rate of 5.0 %, which increases to 8.0 % upon the occurrence of an event of default as defined in the agreement.

The Company is not required to make principal payments on these notes.

During the year ended December 31, 2023, the Company issued an additional $ 900,000 of convertible notes with the same terms as described above (the “2023 Convertible Notes”).

The Company elected the Fair Value Option for the Amended 2022 Convertible Notes and the 2023 Convertible Notes, and therefore measured the Amended 202 Convertible Notes and the 2023 Convertible Notes at issuance and each subsequent reporting period, with changes in fair value recognized in earnings (see Note 14).

The Amended 2022 Convertible Notes and the 2023 Convertible Notes, including accrued interest, converted into 1,067,592 shares of the Company’s stock at the close of the Business Combination at a fair value of $ 3,779,116 (see Note 5).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

* The amount as on December 31, 2024, includes the SEPA option derivative liability of $ 65,114 .

2024 Convertible Notes

The Company issued eleven individual convertible notes in exchange for gross proceeds of $ 2,440,000 to various lenders in 2024 (the “2024 Convertible Notes”).

The 2024 Convertible Notes bear interest rate at a rate of 20.0 % per annum.

A summary of the individual convertible notes was:

Issuance Date

Gross Proceeds

Conversion Price

Conversion Option Period of Exercisability

(from issuance date)

Maturity Date

(from issuance date)

* These notes are with an investor who owns more than 5 % of the Company’s stock

The 2024 Convertible Notes are convertible at the option of the holder into shares of the Company’s common stock at a conversion price.

The number of shares issuable upon conversion is determined by dividing the sum of the outstanding principal and accrued interest by the conversion price.

During 2024, the Company extended the period the conversion option was exercisable.

The extensions to the conversion periods were accounted for as modifications.

The 2024 Convertible Notes may be prepaid in full or in part by the Company at any time without penalty.

The Company elected the fair value option for the 2024 Convertible Notes and therefore measured the 2024 Convertible Notes at fair value at issuance and each subsequent reporting period, with changes in fair value recognized in earnings.

Nine of these convertible notes totaling $ 1,840,000 were extinguished in exchange for the issuance of shares of the Company’s common stock in May 2025 pursuant to note exchange agreements (see Note 21).

The 2024 Convertible Notes were convertible into 1,759,945 shares of the Company’s common stock at December 31, 2024.

Assumed 2024 Note

During the year ended December 31, 2025, the Company extended the maturity dates and the period the conversion option was exercisable for certain convertible notes because of the volatility the Company’s common stock price was experiencing.

The Company evaluated these modifications and concluded that the amended terms were not substantially different from the original terms;

accordingly, the modifications were accounted for as modifications under ASC 470-50, and no extinguishment gain or loss was recognized in connection with the extensions.

The Company subsequently converted all the 2024 Convertible Notes into the Company’s common stock.

During the year ended December 31, 2025, the Company converted $ 2,725,214 of convertible note principal (inclusive of accrued interest) through the issuance of 8,260,923 shares of common stock.

The convertible notes contained original conversion windows that expired without exercise.

Subsequently, the Company entered into debt-for-equity exchanges with the holders under Section 3(a)(9) of the Securities Act at conversion prices based on a discount to the volume-weighted average price of the Company’s common stock.

Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting.

Accordingly, the Company accounted for these exchanges as debt extinguishments under ASC 470-50, recognizing a gain on extinguishment of $ 89,731 equal to the difference between the fair value of the common stock issued and the carrying amount of the converted debt, including any unamortized discount or premiums.

Ass umed 2024 Note

On the Closing Date, the Company assumed MCAC’s promissory note totaling $ 3,680,000 (the “Assumed 2024 Note”) that matures in July 2025.

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The Company has not received written notice from the holder of the Amended 2024 Note in regards to the missed initial mandatory payment as of December 31, 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Assumed 2024 Convertible Note is non-interest bearing, except in the case of an Event of Default (as defined in the agreement), at which point the interest rate increases to a rate of 10.0 % per annum until such event of default is cured.

The Company paid $ 50,000 of the initial mandatory payment of $ 500,000 within thirty calendar days of the effective date of the Assumed 2024 Note, and as such,

The Company paid $ 50,000 of the initial mandatory payment of $ 500,000 within thirty calendar days of the effective date of the Assumed 2024 Note, and such triggered an event of default.

During the year ended December 31, 2025, the Assumed 2024 Note was extinguished in full through debt-for-equity exchanges pursuant to the Company’s 3(a)(10) program with Last Horizon, as described below.

2025 Convertible Notes

The Company entered into thirty-four convertible note agreements in exchange for aggregate gross proceeds of $8,762,250 during the year ended December 31, 2025 (the “2025 Convertible Notes”).

The 2025 Convertible Notes bear interest at rates ranging from 10.0 % to 20.0 % per annum, with certain notes bearing a one-time interest charge of 10.0 % and the remaining notes bearing interest at 20.0 % per annum.

The 2025 Convertible Notes have maturity dates that range from 30 days to one year from the convertible note issuance date, optional conversion periods that range from 30 to 210 days , and conversion prices that range from $ 0.0325 to $ 1.15 for fixed-price notes.

Certain notes contain variable conversion price provisions as described below.

The summary of the individual convertible notes outstanding as of December 31, 2025, is as follows:

Conversion Option

Maturity Date

of Exercisability

(from issuance

Issuance Date

Gross Proceeds

(from issuance date)

5/26/2025 (1)

10/1/2025 (2)

10/7/2025 (2)

10/23/2025 (3)

11/25/2025 (5)

11/25/2025 (4)

12/2/2025 (4)

12/8/2025 (4)

12/16/2025 (4)

(1) From issuance until day 180, the Note’s outstanding principal and accrued interest are convertible, at the holder’s option, into common shares at a price equal to 90 % of the lowest daily VWAP of the Company’s common stock during the three trading days immediately preceding the conversion date.

(2) These convertible notes are convertible at a price equal to the greater of (i) $ 0.05 or (ii) 65 % multiplied by the lowest trading price for the common stock during the ten trading days immediately preceding the conversion date.

(3) This convertible note is convertible at a price equal to 75 % multiplied by the lowest closing bid price for the common stock during the fifteen trading days immediately preceding the conversion date.

(4) For the first 210 days following issuance, the outstanding principal and accrued interest on each Note are convertible, at the holder’s option, into Common Stock at a price equal to the lower of (1) quotient (rounded down to the nearest whole share) obtained by dividing (x) the sum of the Principal Amount and any interest accrued thereon by (y) 90 % of the lowest daily volume weighted average price (the “VWAP”) of the Common Stock on the primary trading market of the Common Stock during the 3 trading day period immediately prior to the applicable measurement date or (2) a fixed conversion price of $ 0.25 .

After the 180 - day period, the Notes may convert at their fixed stated conversion price of $ 0.25 .

The Notes are expected to be converted into shares of our Common Stock.

(5) These convertible notes are convertible at a price equal to 65 % multiplied by the lowest trading price for the common stock during the ten trading days immediately preceding the conversion date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

triggered an event of default.

During February 2025, the Note was extinguished as part of a settlement agreement that the Company entered into with a third party to settle its liabilities that were past due and/or in default (see Note 21).

The Company elected the fair value option for the Note and therefore measured the Note at fair value at assumption and each subsequent reporting period, with changes in fair value recognized in earnings (see Note 15).

The shares of the Company’s common stock to be issued to settle the above liabilities is dependent on the share price at a future date, and as such, it is not an amount that can be estimated as of December 31, 2024.

There is no limit to the number of shares that can be issued to settle the agreements in the respective arrangements.

The 2025 Convertible Notes are generally convertible at the option of the holder into shares of the Company’s common stock at the applicable conversion price, with the number of shares issuable upon conversion determined by dividing the sum of outstanding principal and accrued interest by the conversion price.

Certain notes are convertible only upon the occurrence of an event of default.

The 2025 Convertible Notes may generally be prepaid in full or in part by the Company at any time without penalty;

however, certain notes provide for a prepayment discount ranging from 2 % to 5 % of the outstanding balance on a sliding scale based on early repayment between 60 and 180 days prior to maturity.

During the year ended December 31, 2025, the Company converted $ 6,155,891 of convertible note principal (inclusive of accrued interest) through the issuance of 35,011,418 shares of common stock.

For convertible notes that are settled in accordance with their original contractual terms, changes in fair value up to the date of conversion are recognized in earnings.

With respect to other convertible notes containing original conversion windows that expired without exercise, the Company entered into debt-for-equity exchanges with the holders under Section 3(a)(9) of the Securities Act at conversion prices based on a discount to the volume-weighted average price of the Company’s common stock.

Accordingly, the Company accounted for these exchanges as debt extinguishments under ASC 470-50, recognizing gain on extinguishment of $ 2,261,222 equal to the difference between the fair value of the common stock issued and the carrying amount of the converted debt, including any unamortized discount or premiums.

The Company elected the fair value option for the 2025 Convertible Notes and therefore measured the 2025 Convertible Notes at fair value at issuance and each subsequent reporting period, with changes in fair value recognized in earnings.

As of issuance and at December 31, 2025, the fair value of the remaining 2025 Convertible Notes was determined to be $ 3,212,250 and $ 3,778,303 respectively (see Note 12).

The remaining 2025 Convertible Notes were convertible into 10,124,724 shares of the Company’s common stock on December 31, 2025.

SEPA Convertible Note

In December 2024, in connection with and pursuant to the terms of its Standby Equity Purchase Agreement (the “SEPA”) entered into with YA II PN, LTD., an exempt limited partnership from the Cayman Islands (“Yorkville”) (see Note 12), Yorkville agreed to advance to the Company, in exchange for convertible promissory notes, an aggregate principal amount of up to $ 4,500,000 , $ 2,500,000 of which was funded during December 2024 in exchange for the issuance by the Company of a Convertible Promissory Note (the “SEPA Convertible Note”).

In December 2024, in connection with and pursuant to the terms of its Standby Equity Purchase Agreement (the “SEPA”) entered into with YA II PN, LTD., an exempt limited partnership from the Cayman Islands (“Yorkville”) (See Note 12 - SEPA Derivative Liability), Yorkville agreed to advance to the Company, in exchange for convertible promissory notes, an aggregate principal amount of up to $ 4,500,000 , $ 2,500,000 of which was funded during December 2024 in exchange for the issuance by the Company of a Convertible Promissory Note (the “SEPA Convertible Note”).

The Company received net proceeds of $ 2,300,000 after a non-cash original issue discount of 8.0 %, or $ 200,000 .

The SEPA Convertible Note has a maturity date in December 2025 and accrues interest at 7.0 % per annum, subject to increase to 18.0 % per annum upon the occurrence of an event of default as defined in the agreement (the “Additional Interest”).

As of December 31, 2025 and 2024, the outstanding principal balance of the SEPA Convertible Note was approximately $ 1,386,975 and $ 2,500,000 , respectively.

The fair value of the SEPA Convertible Note was approximately $ 1,543,000 and $ 2,300,000 as of December 31, 2025 and 2024, respectively, and is included within “Convertible debt, at fair value” under current liabilities on the consolidated balance sheets.

The change in fair value recognized in earnings was $ 979,553 for the year ended December 31, 2025 and $ 0 for the year ended December 31, 2024, and is included in “Other income (expense), net” in the consolidated statements of operations and comprehensive loss (refer to Note 12).

The Company elected the Fair Value Option for the SEPA Convertible Note and therefore measured the SEPA Convertible Note at fair value at issuance and each subsequent reporting period, with changes in fair value recognized in earnings.

The SEPA Convertible Note had a maturity date in December 2025 and accrues interest at 7.0 % per annum, subject to increase to 18.0 % per annum upon the occurrence of an event of default as defined in the agreement (the “Additional Interest”).

The Company was also required to pay commitment fees of $ 375,000 .

Of this amount, $ 187,500 was due up front in the form of shares, for which the Company issued 264,456 shares.

The remaining amount is due in cash on the six-month anniversary date of the agreement.

Yorkville has the right to convert any portion of the outstanding principal into shares of the Company’s common stock at (a) $ 2.00 per share at any time (the “Fixed Price”) or (b) 93.0 % of the lowest daily variable weighted average price (the “VWAP”) during the ten consecutive trading days immediately preceding the conversion date, but not lower than the floor price of $ 0.1418 (the “Variable Price”).

The remaining amount was due in cash on the six-month anniversary date of the agreement.

Commencing in March 2025, the Company was required to make monthly principal and interest payments totaling $ 277,778 (increasing to $ 500,000 after the second tranche of advances are received) in cash or an Advance Notice (as defined in the SEPA).

Yorkville had the right to convert any portion of the outstanding principal into shares of the Company’s common stock at (a) $ 2.00 per share at any time (the “Fixed Price”) or (b) 93.0 % of the lowest daily variable weighted average price (the “VWAP”) during the ten consecutive trading days immediately preceding the conversion date, but not lower than the floor price of $ 0.1418 (the “Variable Price”).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As long as the Company is current in its payment obligations, Yorkville is only entitled to convert at the Fixed Price.

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Yorkville will not have the right to convert any portion of the principal to the extent that after giving effect to such conversion, Yorkville would beneficially own in excess of 4.99 % of the total number of shares of the Company’s common stock outstanding after giving effect to such conversion.

At the floor price of $ 0.1418 , the maximum number of shares into which the SEPA Convertible Note is potentially convertible is 9,781,209 shares, which represents the maximum number of shares issuable under the agreement.

Additionally, the Company, at its option, shall have the right, but not the obligation, to redeem early a portion or all amounts outstanding under the Promissory Notes at a redemption amount equal to the outstanding principal balance being repaid or redeemed, plus a 7.0 % prepayment premium, plus all accrued and unpaid interest;

provided that (i) the Company provides Yorkville with no less than ten trading days’ prior written notice thereof and (ii) on the date such notice is issued, the VWAP of the Company’s common stock is less than the Fixed Price.

As of the date of this filing, the Company has not made certain scheduled payments under the SEPA Convertible Note and is therefore in technical default under the agreement.

Commencing in March 2025, the Company is required to make monthly principal and interest payments totaling $ 277,778 (increasing to $ 500,000 after the second tranche of advances are received) in cash or an Advance Notice (as defined in the SEPA, see Note 12).

There is no limit to the number of shares that can be issued to settle the agreements in the respective arrangements.

The SEPA Convertible Note provides that an event of default occurs upon, among other things:

(i) failure to pay principal, interest, or other amounts when due, subject to a five trading day cure period;

(ii) commencement of bankruptcy, insolvency, reorganization, or liquidation proceedings by or against the Company or any subsidiary that remain undismissed for 61 days ;

(iii) default under any other indebtedness exceeding $ 500,000 that results in such indebtedness becoming due and payable;

(iv) entry of final judgments against the Company exceeding $ 500,000 in the aggregate that remain unsatisfied for 30 days ;

(v) cessation of trading of the common stock on any principal market for ten consecutive trading days;

(vi) the Company being party to a change of control transaction unless the note is retired;

(vii) failure to timely deliver shares upon conversion;

(viii) failure to timely file periodic reports with the SEC;

(ix) any material misrepresentation under the transaction documents;

or (x) breach of any other material covenant not otherwise covered, subject to a ten business day cure period.

Upon the occurrence of an event of default (other than bankruptcy-related events), the full unpaid principal, together with accrued and unpaid interest and other amounts, becomes immediately due and payable at the election of the holder.

In the case of bankruptcy-related events, such amounts become automatically due and payable without notice or demand.

In addition, upon an event of default or after the maturity date, the holder has the right to convert the note at the lower of the Fixed Price or the Variable Price.

The Fixed Price and the Floor Price are subject to proportional adjustment upon the occurrence of certain events, including (i) stock dividends or distributions payable in common stock, (ii) subdivision of outstanding common stock into a larger number of shares, (iii) combination of outstanding common stock into a smaller number of shares (including by reverse stock split), or (iv) reclassification of common stock into other capital stock.

In each case, the Fixed Price and Floor Price are multiplied by a fraction, the numerator of which is the number of shares outstanding before such event and the denominator of which is the number of shares outstanding after such event.

The note also contains anti-dilution provisions under which the Fixed Price is reduced to the per-share price of any new issuance of common stock or convertible securities (other than excluded securities) if such price is below the then-effective Fixed Price.

In the event of a merger, consolidation, or sale of substantially all assets, the holder has the right to convert the note into the securities, cash, or property receivable by holders of common stock, or to require the surviving entity to issue a replacement convertible note on substantially identical terms.

The SEPA Convertible Note is transferable by the holder upon surrender to the Company, whereupon the Company will issue a new note registered in the name of the transferee representing the principal amount being transferred, and, if less than the entire outstanding principal is transferred, a new note to the original holder for the remaining balance.

The note also provides for issuance of replacement notes in the event of loss, theft, destruction, or mutilation, subject to customary indemnification undertakings, and is exchangeable at the holder’s election for multiple notes representing the same aggregate outstanding principal.

During the year ended December 31, 2025, the Company converted $ 684,894 of convertible note principal and accrued interest into 3,817,815 shares of common stock.

The fair value of the shares issued was $ 1,099,054 .

The Company defaulted on certain scheduled payments under the SEPA Convertible Note and was therefore in technical default under the agreement.

On December 29, 2025, ConnectM entered into a Settlement and Termination Agreement (the “Yorkville Agreement”) with Yorkville in connection with the Company’s December 17, 2024 SEPA.

This agreement relates to an outstanding debt obligation that was not converted into equity and was subsequently resolved through the settlement arrangement.

As the loan had already been recognized at fair value, the effects of the Yorkville Agreement have been reflected through fair value adjustments during the period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Under the Yorkville Agreement, the Company will continue to make cash payments of $ 250,000 on alternate Mondays (each, an “Alternate Monday Payment”), which are applied toward reducing the outstanding prepaid advance obligation, including principal, interest, and any applicable premiums.

The agreement also confirms that the payment made on December 15, 2025 was first applied to satisfy the $ 187,500 deferred fee, with the remaining amount applied toward the prepaid advance obligation.

Each timely Alternate Monday Payment triggers a 14 -day “No-Conversion Period” commencing on the date Yorkville receives such payment, during which Yorkville may not issue Investor Notices under the SEPA.

If the Company fails to make an Alternate Monday Payment on the applicable payment date, no No-Conversion Period shall commence (or, if already commenced, shall terminate immediately), and Yorkville shall have the right to deliver Investor Notices and exercise related conversion rights under the SEPA.

The Yorkville Agreement further provides that Yorkville will have preference to receive repayment of the outstanding prepaid advance obligation (including principal, accrued interest, and any applicable redemption or prepayment premiums) from the proceeds of the Company’s planned underwritten public offering in connection with an uplisting to a national securities exchange (the “IPO”), if and when the IPO occurs.

In the event the IPO is consummated, the SEPA will be terminated effective immediately prior to the closing, and the Company shall pay Yorkville a termination fee in shares of common stock with an aggregate value equal to $ 175,000 , valued at the public offering price per share in the IPO.

Yorkville will also receive a 24 -month right of first refusal on any future equity line of credit.

Based on the remaining repayment schedule of $ 250,000 payments on alternate Mondays, the final payment of approximately $ 136,975 is expected to occur on March 23, 2026.

Debt consists of the following as of December 31:

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Vehicle Notes

Avanti Notes (Related Party)

Real Estate Promissory Note

1 unchanged sentence

Sale of Future Receipts

debt issuances costs

Notes Payable

debt discount and issuance costs

notes payable, current portion

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The notes bear interest at rates ranging between 20 % and 24 %.

During the year ended December 31, 2024, $ 6,834,020 of principal was extinguished via debt conversion agreements (see Note 14).

In connection with the issuance of the secured promissory notes issued in February 2022 (the “2022 Notes”), the Company issued Legacy Warrants to each lender that may be converted into shares of common stock of the Company.

There were 23,332 Legacy Warrants that were issued in connection with the issuance of the February 2022 Notes that have an exercise price of $ 12.00 per share (see Note 12).

The fair value of the Legacy Warrants was $ 82,861 and was recorded as a debt discount.

Amortization expense related to the debt discount amounted to $ 27,620 and $ 27,620 for the years ended December 31, 2024 and 2023, respectively, and is recorded as interest expense on the accompanying consolidated statements of operations and comprehensive loss.

For all secured promissory notes, the interest is charged at an annual simple rate.

For the 2022 Notes, interest increases to 12 % upon the occurrence of an event of default as defined in the secured promissory note agreements.

During the year ended December 31, 2023, the Company modified individual notes with original maturity dates prior to December 31, 2023 to extend the maturity date to the earlier of May 31, 2024 or the Closing Date.

During September 2024, the Company entered into four note conversion agreements with four of the secured promissory note holders in which the Company converted the outstanding principal and interest on the secured promissory notes, into shares of the Company’s common stock at a conversion price of $ 2.00 per share with a one-time share reset adjustment (see Note 12), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for each individual lender.

In connection with these agreements, $ 6,834,020 of secured promissory notes and $ 1,064,080 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 3,949,050 shares of the Company’s common stock (see Note 12).

In connection with these agreements, $ 6,834,020 of secured promissory notes and $ 1,064,080 of accounts payable and accrued expenses were extinguished in

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

exchange for the issuance of 3,949,050 shares of the Company’s common stock (see Note 12).

Two of the lenders total ownership of the Company’s common stock exceeded 5.0 % as a result of the share issuances in connection with the note conversion agreements.

These lenders continue to hold certain Secured Promissory Notes as of December 31, 2024 (see Note 8).

As of December 31, 2024, the Company has not made certain scheduled payments and is therefore in technical default under two of the secured promissory notes entered into in June 2024.

The total outstanding principal and accrued interest under these notes was approximately $ 250,000 as of December 31, 2024.

However, neither noteholder has issued a formal notice of default, and both have

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

continued to work cooperatively with the Company.

Management is engaged in discussions with the noteholders regarding repayment arrangements and believes a mutually satisfactory resolution will be reached.

Small Business Administration (“SBA”) Loans

As of December 31, 2025 and 2024, the Company has not made certain scheduled payments and is therefore in technical default under four of the secured promissory notes entered into in June 2024.

The total outstanding principal and accrued interest under these notes was approximately $ 550,000 and $ 250,000 as of December 31, 2025 and 2024 respectively.

The Company entered into six promissory note agreements in exchange for aggregate gross proceeds of $ 735,000 during April 2025 and May 2025.

During the year ended December 31, 2025, the Company extinguished $ 3,700,000 of principal via debt conversion agreements.

The principal balance of Secured Promissory Notes as of December 31, 2025, and December 31, 2024, were $ 550,000 and $ 4,250,000 respectively.

Small Business Administration Loans

In 2020, the Company received loan proceeds of $ 150,000 under a SBA loan agreement that matures in June 2050.

3 unchanged sentences

All SBA loan agreements are collateralized by the Company’s tangible and intangible personal property.

Paycheck Protection Program Loan

Paycheck Protection Program Loans

On May 4, 2020, the Company received loan proceeds of $ 151,000 under the Paycheck Protection Program (the “PPP”).

The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act and provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the business, subject to certain limitations.

The PPP loan matures in May 2025.

Payments were not required under the loan for a period from six months from the date of the initial borrowing, upon which payments are required to be made monthly.

The PPP loan was paid off during 2025.

Interest accrues at 1.0 % annually on the outstanding balance.

The PPP loan is collateralized by all tangible and intangible personal property of the Company.

Promissory Note

The PPP loan was collateralized by all tangible and intangible personal property of the Company.

During the year ended December 31, 2025, the Company repaid the remaining principal of $ 17,543 from December 31, 2024.

The principal balance of Paycheck Protection Program Loans as of December 31, 2025, and December 31, 2024, were $ 0 and $ 17,543 , respectively.

Promissory Notes

In October 2024, the Company entered into a promissory note to extinguish an obligation to a vendor in which the Company promised to pay the vendor a principal amount of $ 119,000 , interest through October 15, 2024 totaling approximately $ 17,000 , attorney’s fees of $ 4,000 and additional interest from October 16, 2024 through the date of repayment of 18.0 % per annum.

2 unchanged sentences

The promissory note may be prepaid without penalty.

Business Loan and Security Agreements

The Company entered into three business loan and security agreements with one lender as follows:

Maturity Date

(from issuance

Gross Proceeds

December 31, 2024

Interest rate

May 2024 BLS Agreement

July 2024 BLS Agreement

August 2024 BLS Agreement

The Company receives a 5.0 % prepayment discount on the May 2024 BLS Agreement and the July 2024 BLS Agreement.

The August 2024 BLS Agreement provides the following terms for prepayments:

● For prepayment made prior to three months after the Loan Date, $ 122,000 minus repayments to date,

● For prepayment made between three and six months after the Loan Date, $ 127,000 minus repayments to date,

● For prepayment made more than six months after the Loan Date, a 5 % discount may be applied to the remaining payment.

The Company triggers an event of default under these agreements if repayments are not made in accordance with the repayment schedule, if the Company defaults on a loan with a bank or financial institution, and other matters as defined in the agreements.

In the event of a default, the lender may declare remaining outstanding amounts due and payable less a 5.0 % discount on the remaining unpaid balance and the stated interest rate is adjusted to be the lower of 18.0 % per annum or the maximum rate allowed by law.

Each loan is collateralized by the assets of the subsidiary the debt was taken out for and each is guaranteed by an officer of the Company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In May 2025, the Company amended each of the business loan and security agreements, changing the required periodic payments and extending the maturity date on the respective agreement as follows:

May 2024 BLS Agreement :

The monthly payment was reduced from approximately $ 7,000 to a monthly payment of approximately $ 3,000 and the maturity date was extended from December 2025 to December 2026.

July 2024 BLS Agreement :

The monthly payment was reduced from approximately $ 3,000 to a monthly payment of approximately $ 2,000 and the maturity date was extended from February 2026 to November 2026.

August 2024 BLS Agreement :

The monthly payment was reduced from approximately $ 13,000 to a monthly payment of approximately $ 3,000 and the maturity date was extended from May 2025 to December 2026.

On April 28, 2025, in connection with the acquisition of ATS, the Company assumed a commercial term loan with an outstanding balance of approximately $ 147,000 .

The obligation was recognized at fair value as an assumed liability in the purchase price allocation.

As of December 31, 2025, the outstanding balance was approximately $ 111,000 , all of which is classified as current, reflecting expected repayment within the next 12 months.

The Company entered into six promissory note agreements in exchange for aggregate gross proceeds of $ 735,000 during April 2025 and May 2025.

These notes were extinguished in exchange for the issuance of 3,724,864 shares of the Company’s common stock.

Accordingly, the Company accounted for these exchanges as debt extinguishments under ASC 470-50, recognizing loss on extinguishment of $ 15,318 equal to the difference between the fair value of the common stock issued and the carrying amount of the converted debt, including any unamortized discount or premiums.

Vehicle Notes

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Interest rates range from 4.99 % to 17.37 %.

The Company defaulted on two of the vehicle notes during the year ended December 31, 2024 and the lender repossessed one of the vehicles.

The Company reduced the carrying value of the note by the fair value of the vehicles of approximately $ 23,000 at the time of the repossession.

The Company owes the lenders approximately $ 13,000 as of December 31, 2024.

The second vehicle was repossessed during the subsequent year.

The Company entered into several seller notes as part of agreements to acquire certain of its wholly owned subsidiaries as follows:

Interest Rate

Maturity Date

December 31, 2024

December 31, 2023

November 2025

Mortgage of certain real property which has a book value of $ 200,000 as of December 31, 2024

Equity securities of acquired company owned by ConnectM

December 2026

Equity securities of acquired company owned by ConnectM

December 2026

Equity securities of acquired company owned by ConnectM

February 2025

Equity securities of acquired company owned by ConnectM

February 2028

Equity securities of acquired company owned by ConnectM

The December 2022 Seller Note is in default and under legal proceedings (see Note 19).

During September 2024, the Company entered into a note conversion agreement with the holders of the holder of the May 2022 seller note in which the Company converted outstanding principal of $ 91,000 , into 72,800 shares of the Company’s common stock at a

The Company defaulted on two of the vehicle notes during the year ended December 31, 2025 and the lender repossessed two of the vehicles.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

conversion price of $ 1.25 per share with a one-time consideration adjustment (see Notes 12 and 14), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for the holder of the seller note.

This was accounted for as debt extinguishment.

Real Estate Promissory Note

During the year ended December 31, 2025, the Company extinguished $ 127,352 principal balance.

The unpaid balance of the principal amount bears interest at a rate of 14.0 % per annum, except in the event of a default when interest increases to 19.0 % per annum.

The Amended January 2025 Note extended the maturity date from June 30, 2025 to August 8, 2025 and increased the interest rate to 18.0 % effective July 1, 2025.

These seller notes extensions were accounted for as debt modifications under ASC 470.

On October 21, 2025, the Company fully repaid the note with a payment of $ 153,126 , consisting of $ 149,790 in principal and $ 3,336 in accrued interest.

Following this payment, the note was retired in full and all related obligations were satisfied.

On November 1, 2025, the Company entered into a Sale of Future Receivable Agreement, under which the Company received total funding of $ 60,000 .

The agreement provides for repayment through weekly remittances based on a fixed percentage of the Company’s receivables until the total specified payback amount is satisfied.

The funding is unsecured and does not carry traditional interest;

instead, repayment is structured as a sale of a portion of future receivables at a discount.

The proceeds from this financing were used for working capital and general corporate purposes.

As of December 31, 2025, the outstanding balance was approximately $ 40,500 , all of which is classified as current, reflecting expected remittances within the next 12 months.

During the year ending December 31, 2025, the Company extinguished $ 534,146 principal from all Seller Notes.

The principal balance as of December 31, 2025, and December 31, 2024, were $ 1,070,813 and $ 1,434,959 respectively.

Real Estate Promissory Notes

On December 29, 2022, the Company entered into a Real Estate Promissory Note for land in Florida for a principal sum of $ 370,000 , which is collateralized by real estate with a maturity date of July 29, 2023.

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This note is in default and under legal proceedings (see Note 16).

Business Line of Credit

In January 2023, the Company opened a business line of credit with American Express and borrowed $ 74,400 .

The maximum amount the Company can take out on the line of credit is $ 74,400 .

The line of credit has an interest rate of 13.0 %.

This business line of credit matured in September of 2023 and was repaid by the Company.

There was no current availability under this business line of credit as of December 31, 2024.

Sale of future receipts

On April 25, 2023, the Company entered into a sale of future receipts agreement (the “April 2023 SFR Agreement”) whereby the Company sold and assigned $ 1,597,144 of future receipts in exchange for net cash proceeds of $ 1,176,000 , including a fee of $ 24,000 .

As a result, the Company recorded a discount of $ 421,144 .

The Company was required to remit a minimum of $ 30,174 of weekly sales receipts until the future receipts assigned under the April 2023 SFR Agreement were repaid in full.

Accordingly, the term was determined to be approximately one year .

On November 2, 2023, the Company refinanced the April 2023 SFR Agreement to reduce the minimum weekly sales remittance to $ 17,700 and extend the repayment period to November 2024 (the “November 2023 SFR Refinancing Agreement”).

Additionally, the Company was forgiven for $ 162,080 of the debt outstanding, which was recorded as a component of “loss on extinguishment of debt” in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023, and incurred an incremental fee of $ 100,000 .

The Company applied extinguishment accounting to the November 2023 SFR Refinancing Agreement.

On August 7, 2023, the Company entered into a sale of future receipts agreement (the “August 2023 SFR Agreement”) whereby the Company sold and assigned $ 1,290,000 of future receipts in exchange for net proceeds of $ 980,000 , including a fee of $ 20,000 .

As a result the Company recorded a discount of $ 310,000 .

The Company was required to remit a minimum of $ 25,595 of weekly sales receipts until the future receipts assigned under the August 2023 SFR Agreement were repaid in full.

Accordingly, the term was determined to be approximately one year .

On November 9, 2023, the Company refinanced the August 2023 SFR Agreement to borrow an incremental $ 370,543 (the “Second November 2023 SFR Refinancing Agreement”).

Additionally, the Company was forgiven for $ 130,000 of the debt outstanding, which was recorded as a component of “loss on extinguishment of debt” in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023, and incurred an incremental fee of $ 221,000 .

The Company applied extinguishment accounting to the Second November 2023 SFR Refinancing Agreement.

As a result of the amendments entered into during 2023, the Company wrote off all remaining debt discounts totaling approximately $ 662,000 , which is recorded within loss on extinguishment of debt on the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

On January 4, 2024, the Company entered into a sale of future receipts agreement (“the January 2024 SFR Agreement”) whereby the Company sold and assigned $ 452,000 of future receipts in exchange for net cash proceeds of $ 343,000 , including a fee of $ 7,000 .

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As a result, the Company recorded a discount of approximately $ 523,000 .

The Company was required to remit a minimum of

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

approximately $ 52,000 of weekly sales receipts until the future receipts assigned under the Amended January 2024 SFR Agreement were repaid in full.

The Company was required to remit a minimum of approximately $ 52,000 of weekly sales receipts until the future receipts assigned under the Amended January 2024 SFR Agreement were repaid in full.

Accordingly, the term was determined to be approximately one year .

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Second January 30, 2024 SFR Agreement, the Company received an additional $ 1,054,286 (the “Additional Advance”).

Such amounts received were provided to the Company in error and are due and payable in full to the lender.

During September 2024, the Company entered into a note conversion agreements with one of the sale of future receipts agreement holders in which the Company converted the outstanding principal on the Amended January 2024 SFR Agreement, including accrued and unpaid interest, and the Additional Advance into shares of the Company’s common stock at a conversion price of $ 2.00 per share with a two share reset adjustments and a make-whole payment (see Note 14), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for each individual lender.

6 unchanged sentences

The Company is to repay the settlement balance through a conditional release of funds of approximately $ 17,000 held by a third party and monthly payments totaling approximately $ 14,000 until the settlement balance is paid in full.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025, the outstanding balance was $ 88,228 , all of which is classified as current, reflecting expected remittances within the next 12 months.

In October 2024, the Company entered into a sale of future receipts agreement (the “October 2024 SFR Agreement”) with the same lender of the May 2024 SFR Agreement whereby the Company sold and assigned approximately $ 310,000 of future receipts in exchange for net cash proceeds of approximately $ 170,000 , including a fee of approximately $ 3,000 and repayment of approximately $ 78,000 outstanding under the May 2024 SFR Agreement.

9 unchanged sentences

The Company is to repay the settlement balance through a conditional release of funds of approximately $ 42,000 held by a third party and monthly payments totaling approximately $ 8,000 until the settlement balance is paid in full.

As of December 31, 2025, the outstanding balance was $ 25,586 , all of which is classified as current, reflecting expected remittances within the next 12 months.

In November 2024, the Company entered into a sale of future receipts agreement (the “November 2024 SFR Agreement”) with the same lender of the Second May 2024 SFR Agreement whereby the Company sold and assigned approximately $ 201,000 of future receipts in exchange for net cash proceeds of approximately $ 97,000 , including a repayment of $ 60,000 outstanding under the Second May 2024 SFR Agreement.

5 unchanged sentences

As a result, the Company recorded a discount of approximately $ 65,000 .

The Company is required to remit 10.0 % of daily receipts until the until the future receipts assigned under the July 2024 SFR Agreement were repaid in full.

The Company is required to remit 10.0 % of daily receipts until the future receipts assigned under the July 2024 SFR Agreement were repaid in full.

The estimated term of this agreement is approximately one year , based on expected daily collections.

The July 2024 SFR Agreement includes an option for early payoff with discounts on the remaining balances.

The July 2024 SFR Agreement includes an option for

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

early payoff with discounts on the remaining balances.

As of December 31, 2025, the outstanding balance was $ 91,905 , all of which is classified as current, reflecting expected remittances within the next 12 months.

In November 2024, the Company entered into a sale of future receipts agreement (the “Second November 2024 SFR Agreement”) with the same lender of the July 2024 SFR Agreement whereby the Company sold and assigned approximately $ 313,000 of future receipts in exchange for net cash proceeds of approximately $ 96,000 , including a fee of approximately $ 9,000 and repayment of approximately $ 120,000 outstanding under the July 2024 SFR Agreement.

3 unchanged sentences

The Second November 2024 SFR Agreement was accounted for as an extinguishment of the July 2024 SFR Agreement and approximately $ 34,000 loss on extinguishment was recorded on the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.

On September 19, 2024, the Company into a sale of future receipts agreement (the “September 2024 SFR Agreement”) whereby the Company sold and assigned approximately $ 107,000 of future receipts in exchange for net cash proceeds of $ 74,000 , including a fee of $ 2,000 .

On September 19, 2024, the Company entered into a sale of future receipts agreement (the “September 2024 SFR Agreement”) whereby the Company sold and assigned approximately $ 107,000 of future receipts in exchange for net cash proceeds of $ 74,000 , including a fee of $ 2,000 .

As a result, the Company recorded a discount of $ 33,000 .

The Company is required to remit 6.32 % of weekly sales receipts until the until the future receipts assigned under the September 2024 SFR Agreement were repaid in full.

The Company is required to remit 6.32 % of weekly sales receipts until the future receipts assigned under the September 2024 SFR Agreement were repaid in full.

The estimated term of this agreement is approximately one year , based on expected daily collections.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On November 8, 2024, the Company entered into a sale of future receipts agreement (the “November 2024 SFR Agreement”) whereby the Company sold and assigned approximately $ 112,000 of future receipts in exchange for net cash proceeds of approximately $ 76,000 , including a fee of approximately $ 4,000 .

2 unchanged sentences

Accordingly, the term of this agreement is approximately one year .

Since the Company has significant continuing involvement in the generation of future cash flows due under these agreements among other indicators, pursuant to ASC 470-10-25-2, Debt- Sales of Future Revenues or Other Various Measures of Income , the Company has reflected any future commitments associated with these agreements as debt.

The discounts on the various sale of future receipts agreements are recorded as an adjustment to the related liability within the debt, net on the accompanying consolidated balance sheets as of December 31, 2024 and 2023.

These discounts are amortized over the life of the respective loans via the effective interest method.

This amortization is recorded as a component of interest expense on the accompanying consolidated statement of operations.

Future maturities for notes payable as of December 31, 2024 is as follows:

STOCKHOLDERS’ DEFICIT

As discussed in Note 1 and Note 5, on July 12, 2024, the Company consummated the Business Combination, which has been accounted for as a reverse recapitalization.

Pursuant to the Certificate of Incorporation as amended on July 12, 2024 and as a result of the reverse recapitalization, the Company has retrospectively adjusted the Legacy ConnectM preferred shares and Legacy ConnectM common shares issued and outstanding prior to July 12, 2024 to give effect to the Exchange Ratio used to determine the number of shares of common stock of the combined entity into which they were converted.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company is authorized to issue 100,000,000 shares of common stock at $ 0.0001 par and 10,000,000 shares of preferred stock at $ 0.0001 par.

As of December 31, 2024 and 2023 there was 29,093,289 and 13,338,437 , respectively, of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

The following shares of common stock are reserved for future issuance:

Legacy Warrants

Public Warrants

Private Placement Warrants

July 2024 Warrants

Legacy Options

2023 Equity Incentive Plan

The rights, preferences and privilege of common stock are as follows:

Voting rights – the common stock possesses all voting power of the Company.

Each share of common stock is entitled to one vote.

Dividend rights – the holders of common stock are entitled to receive dividends and other distributions, as and if declared by the Board out of assets or funds of the Company legally available and shall share equally on a per share basis.

Liquidation – in the event of any liquidation, dissolution or winding up of the Company, after payment or provision of payment of the debts and other liabilities of the Company, the holders of common stock are entitled to receive the remaining assets of the Company available for distribution ratably in proportion to the number of shares of common stock held by them

Common stock issuances:

In January, 2024, the Legacy ConnectM issued 5,000 shares of Legacy ConnectM common stock with a fair value of approximately $ 35,000 .

These shares of Legacy ConnectM common stock were exchanged for 16,607 shares of the Company’s common stock on the Closing Date (see Note 5).

In July 2024, immediately prior to the closing of the Business Combination, Legacy ConnectM issued 321,429 shares of Legacy ConnectM common stock in connection with the conversion of certain convertible debt instruments (see Note 10).

These shares of Legacy ConnectM common stock were exchanged for 1,067,592 shares of the Company’s common stock on the Closing Date (see Note 5).

These shares had a fair value of $ 3,779,223 .

In July 2024, the Company consummated the Business Combination, in which 6,701,421 shares of the Company’s common stock were issued (see Note 5).

In October 2024, the Company issued 160,000 shares of the Company’s common stock as consideration in acquisition of a business with a fair value of approximately $ 161,000 , as determined by the closing share price on the date of issuance (see Note 6).

In October 2024, the Company reached a legal settlement with a vendor relating to past due amounts owed.

In accordance with the settlement, as additional consideration, the Company was required to issue 125,000 shares to the vendor.

The fair value of these shares was $ 133,750 .

This expense is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2024, the Company issued shares of the Company’s common stock to extinguish obligations to certain vendors and lenders (see Note 11 and Note 19) as follows:

Issuance Date

Shares Issued

* Related party transaction.

See Note 18 – Related Party Transactions for additional information.

The Company determined the fair value of its common stock for each issuance using the closing share price on the date of issuance.

During the year ended December 31, 2024, the Company issued shares of the Company’s common stock to vendors as consideration for services to be performed (see Note 13) as follows:

Issuance Date

Shares Issued

The Company determined the fair value of its common stock for each issuance using the closing share price on the date of issuance.

Standby Equity Purchase Agreement

In December 2024, the Company entered into a SEPA with YA II PN, LTD., an exempt limited partnership from the Cayman Islands (“Yorkville”).

Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $ 25,000,000 of shares of the Company’s common stock at the Company’s request any time during the commitment period commencing on December 17, 2024 (the Effective Date”) and continuing for a term of three years (“Purchased Put Option”).

Yorkville agrees to advance to the Company $ 4,500,000 (the “Pre-Paid Advance”), less a discount of 8.0 %.

of the principal amount, as evidenced by convertible promissory notes in two tranches.

The first tranche of $ 2,500,000 was advanced to the Company on the Effective Date of the SEPA (see Note 10) and the second tranche of $ 2,000,000 to be advanced on the later of (i) the initial registration statement becoming effective and (ii) the Company’s receipt of shareholder approval to issue shares of the Company’s common stock in excess of the exchange cap, as defined in the SEPA.

The SEPA will automatically terminate on the earlier to occur of (i) January 1, 2028, provided that if any Pre-Paid Advance is then outstanding, termination shall be delayed until such date that all Pre-Paid Advances are repaid, and (ii) the date on which Yorkville shall have made payment of advances pursuant to the SEPA for Common Stock equal to the commitment amount of $ 25,000,000 .

Each advance that the Company issues in writing to Yorkville under the SEPA (each, an “Advance,” and notice of such request, an “Advance Notice”) may be in an amount of Common Stock up to the aggregate daily trading volume of Common Stock for the five trading days prior to the Company requesting an Advance.

The purchase price for the shares of Common Stock set forth in the Advance is determined by multiplying the market price of the Company’s common stock by 97 % of the lowest daily VWAP during the applicable three consecutive trading day pricing period for any Advance Notice delivered by the Company Additionally, the Company may establish a minimum acceptable price in each Advance Notice below which the Company will not be obligated to make any sales to Yorkville.

Once the Company draws on the SEPA, the related number of shares issuable constitutes a forward contract to issue common stock (“Forward Contract”).

In March 2025, the Company entered into a payment agreement to extinguish the balance owed on the September 2024 Sale of Future Receipts (“SFR”) Agreement of approximately $ 69,000 for a cash payment of $ 25,000 .

The Company paid the amount in full during March 2025 and accounted for the payment agreement as an extinguishment of the June 2024 SFR Agreement and recorded approximately $ 12,000 as a gain on extinguishment on the accompanying consolidated statement of operations and comprehensive loss.

In March 2025, the Company was issued a stipulation of settlement from the Supreme Court of the State of New York, County of Sullivan, under which it was required to pay $ 30,000 to settle the balance owed on the November 2024 SFR Agreement of approximately $ 53,000 , including principal and accrued interest.

The Company paid the amount in full during May 2025 and accounted for the payment agreement as an extinguishment of the November 2024 SFR Agreement and recorded approximately $ 2,000 as a gain on extinguishment on the accompanying consolidated statement of operations and comprehensive loss.

On April 28, 2025, in connection with the acquisition of SESB, the Company assumed a sales-of-future-receipts (merchant cash advance) obligation with an outstanding balance of approximately $ 48,000 .

The obligation was recognized at fair value as an assumed liability in the purchase price allocation.

As of December 31, 2025, the outstanding balance was approximately $ 22,000 , all of which is classified as current, reflecting expected remittances within the next 12 months.

On November 7, 2025, the Company entered into a Revenue Purchase and Sale of Future Receivable Agreements with two lenders, under which the Company received total funding of $ 210,000 .

The agreements provide for repayment through weekly remittances based on a fixed percentage of our receivables until the total specified payback amount is satisfied.

The funding is unsecured and does not carry traditional interest;

instead, repayment is structured as a sale of a portion of future receivables at a discount.

The proceeds from these financings are being used for working capital and general corporate purposes, including operating cash flow management and near-term growth initiatives.

As of December 31, 2025, the aggregate outstanding balance was approximately $ 154,000 , all of which is classified as current, reflecting expected remittances within the next 12 months.

On November 12, 2025, the Company entered into a Sale of Future Receivable Agreement with a lender, under which the Company received total funding of $ 150,000 .

The agreement provides for repayment through periodic remittances based on a specified percentage of the Company’s average sale revenue until the total specified payback amount is satisfied.

The funding is unsecured and does not carry traditional interest;

instead, repayment is structured as a sale of a portion of future receivables at a discount.

The proceeds from this financing are being used for working capital and general corporate purposes, including operating cash flow management and near-term growth initiatives.

As of December 31, 2025, the aggregate outstanding balance was approximately $ 114,000 , all of which is classified as current, reflecting expected remittances within the next 12 months.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the terms of the SEPA, at any time that there is a balance outstanding under the SEPA Convertible Note, Yorkville has the right to receive shares to pay down the principal balance, and may select the timing and delivery of such shares (via an “Investor Notice”), in an amount up to the outstanding principal balance on the SEPA Convertible Note at a purchase price equal $ 2.00 per share of the Company’s common stock (the “Fixed Price”).

If the Company is not current on its payment obligations, the Yorkville is entitled to a purchase price equal to (i) 93 % of the lowest daily Volume Weighted Average Price (“VWAP”) of the Company’s common stock on Nasdaq during the 10 consecutive Trading Days immediately preceding the Conversion Date or other date of determination (the “Variable Price”).

The Variable Price shall not be lower than $ 0.1418 per share (the “Floor Price”), (ii) the Variable Price at any time on or after the determination of the Valuation Date of the forward purchase agreement (see Note 14), or (iii) the Variable Price on the earlier of March 17, 2025 or the effective date of the initial registration statement.

Any purchase under an Advance would be subject to certain limitations, including that Yorkville shall not purchase or acquire any shares that would result in it and its affiliates beneficially owning more than 4.99 % of the then outstanding voting power or number of shares of the Company’s common stock or any shares that, aggregated with shares issued under all other earlier Advances, would exceed 19.99 % of all shares of the Company’s common stock of the Company outstanding on the date of the SEPA, unless Company shareholder approval was obtained allowing for issuances in excess of such amount.

As consideration, the Company agreed (i) and paid a structuring fee in the amount of $ 25,000 and (ii) to pay a commitment fee of $ 375,000 , of which (a) one -half of the commitment fee was paid through the issuance of 264,456 shares of the Company’s common stock with a fair value of $ 187,500 , as determined using the closing price on the date of issuance and (b) one -half of the commitment fee is due on June 17, 2025 in cash (or by way of an Advance).

The structuring fee and commitment fee were expensed in full immediately following the consummation of the SEPA, according to ASC 815, and recorded within the general and administrative expense line item in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.

Pursuant to the terms of the SEPA, the proceeds of the SEPA are restricted from being used

● to repay any advances or loans to executives, directors, or employees

● to make payments on related party obligations

● to repay advances or loans to Related Lenders, as defined in the SEPA, without the prior written consent of Yorkville or until the balance under the Pre-Paid Advances is less than $ 1,000,000

● to fund or facilitated, directly or indirectly, any activities or business with a person, entity, territory, or country subject to Sanctions, as defined in the SEPA, or is a Sanctioned Country, as defined in the SEPA

● in any manner that will result in a violation of Sanctions or applicable laws

● to loan, invest or transfer any cash proceeds, or property acquired with cash proceeds from the Pre-Paid Advance to a subsidiary without approval from Yorkville

While amounts are outstanding under the Pre-Paid Advance, the Company

● may not effect a reverse stock split or share consolidation.

● shall prepay amounts owed under the Pre-Paid Advance in an amount equal to 20.0 % of the net proceeds of a new financing transaction to Yorkville, unless waived by Yorkville

● shall pay 100.0 % of proceeds received from any disbursements of the FPA to Yorkville, unless waived by Yorkville

Yorkville retains the right of participation for twelve months from the Effective Date of the SEPA to participate in an amount up to 25.0 % of a financing transaction, as defined in the SEPA.

As of December 31, 2024, the minimum cash balance required was approximately $ 833,000 .

Since the Company has significant continuing involvement in the generation of future cash flows due under these agreements among other indicators, pursuant to ASC 470-10-25-2, Debt- Sales of Future Revenues or Other Various Measures of Income, the Company has reflected any future commitments associated with these agreements as debt.

Business Loan and Security Agreement:

In October 2025, the Company entered into a new funding relationship with a lender, pursuant to which the Company received two separate unsecured loans totaling approximately $ 390,000 .

On October 1, 2025, the Company issued a promissory note in the principal amount of $ 230,160 with an original issue discount of $ 24,660 and a one-time interest charge of 12 %, maturing on July 30, 2026.

On October 7, 2025, we issued a second promissory note in the principal amount of $ 160,160 with an original issue discount of $ 17,160 , also carrying a 12 % one-time interest charge and maturing on August 15, 2026.

Both loans are unsecured and permit early repayment without penalty.

The funding provides the Company with additional working capital flexibility to support growth initiatives, including technology integration and acquisition-related activities.

On October 23, 2025, the Company entered into a Business Loan and Security Agreement with a lender, under which the Company received total funding of $ 250,000 .

The agreement provides for repayment through weekly remittances based on a fixed percentage of our receivables until the total specified payback amount is satisfied.

The funding is unsecured and does not carry traditional interest;

instead, repayment is structured as a sale of a portion of future receivables at a discount.

The proceeds from this financing are being used for working capital and general corporate purposes, including operating cash flow management and near-term growth initiatives.

On October 27, 2025, the Company entered into a Business Line of Credit Agreement with a lender, providing the Company with borrowing capacity of up to $ 43,100 .

As of the filing date, the Company had drawn $ 42,000 under the line of credit.

In accordance with the agreement, the outstanding balance will be repaid in twelve equal monthly installments.

Purchase Order Financing Facility

On September 18, 2025, County Comfort Services, LLC (“CCS”), a wholly owned subsidiary, entered into a Factoring & Security Agreement to provide purchase-order and accounts-receivable financing of up to $ 4,000,000 .

Under the facility, the lender may advance up to 85 % of eligible receivables (generally up to 60 days from invoice date) or, for approved purchase orders, up to the cost of product plus shipping prior to invoicing.

The facility is secured by a first-priority lien on substantially all of CCS’s accounts receivable and a blanket security interest in other assets and is guaranteed by the Company.

Interest/fees and repayment terms - For accounts receivable financing, charges accrue at 1.55 % for the first 30 days after advance, plus 0.55 % for each additional 10-day period thereafter;

invoices outstanding more than 60 days incur an additional 1.00 % per 10-day period (minimum $ 25 per invoice).

For purchase order (“PO”) financing, charges accrue at 1.625 % per 15-day period from the date funds are advanced to the vendor until the related invoice is verified and funded.

The agreement includes a 12-month term, minimum annual volume equal to 100 % of the facility amount, and standard reporting covenants.

As of December 31, 2025, the Company received approximately $ 735,000 advanced under the facility for operations and repaid entire advance along with an interest of approximately $ 78,000 .

D&O Insurance Premium Financing

On July 15, 2025, the Company entered into a premium finance agreement with a lender, to finance its directors’ and officers’ liability insurance policies for the July 15, 2025 to July 15, 2026 policy term.

The total annual premiums, taxes and fees were $ 434,500 , against which the Company made a down payment of $ 108,625 and financed the remaining $ 325,875 .

The financed amount bears interest at an annual percentage rate of 8.39 % and is payable in nine monthly installments of $ 37,486 beginning August 15, 2025.

The agreement grants the lender a first-priority security interest in the financed policies and related unearned premiums and gives the lender the right to cancel the policies and apply any return premium to the outstanding balance in the event of default.

As of December 31, 2025, the outstanding balance under the premium finance agreement was approximately $ 147,000 .

Finance charges related to this agreement is recognized in the Consolidated Statements of Operations and Comprehensive Loss within interest expense.

Notes Payable:

Libertas Settlement and Termination Agreement

On January 30, 2024, the Company entered into a second sale of future receipts agreement, amending the January 2024 SFR Agreement, (the “Amended January 2024 SFR Agreement”) whereby the Company increased the amount of future receipts sold and assigned to the lender to $ 2,600,000 in exchange for net cash proceeds of approximately $ 2,077,000 , including a fee of approximately $ 3,000 .

As a result, the Company recorded a discount of approximately $ 523,000 .

The Company was required to remit a minimum of

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of the date of this filing, the Company has not made certain scheduled payments under the SEPA Convertible Note or made timely SEC filings and is therefore in default under the agreement.

Public Warrants:

On May 10, 2022, MCAC completed an initial public offering that included warrants for shares of common stock (the “Public Warrants”).

Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $ 11.50 per share.

No fractional shares will be issued upon exercise of the Public Warrants.

The Company may elect to redeem the Public Warrants, in whole and not in part at a price of $ 0.01 per Public Warrant if (i) 30 days ’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders.

Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis.

On the Closing Date, there were 9,200,000 Public Warrants issued and outstanding .

Private Placement Warrants:

Simultaneous with MCAC’s initial public offering in May 2022, MCAC’s sponsor purchased warrants at a purchase price of $ 1.00 per warrant in a private placement (the “Private Placement Warrants”).

The Private Placement Warrants may not be redeemed by the Company so long as the Private Placement Warrants are held by the initial purchasers, or such purchasers’ permitted transferees.

The Private Placement Warrants have terms and provisions identical to those of the Public Warrants, including as to exercise price, exercisability and exercise period, except if the Private Placement Warrants are held by someone other than the initial purchasers’ permitted transferees, then the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

On the Closing Date, there were 3,040,000 Private Placement Warrants issued and outstanding .

July 2024 Warrants:

On July 10, 2024, MCAC issued 750,000 warrants (the “July 2024 Warrants”) in respect to the cancellation and conversion of $ 750,000 of principal underlying certain convertible promissory notes by and between MCAC and its Sponsor, with each whole warrant entitling the holder to purchase one share of MCAC’s Class A Common Stock at a price of $ 11.50 per share.

Legacy Warrants :

In connection with the issuance of the 2022 Notes, Legacy Warrants with an exercise price of $ 12.00 per warrant were issued.

Such warrants are exercisable into one share of the Company’s common stock at any point for a period of ten years from the date of issuance on February 22, 2032.

The warrants are exercisable.

The warrants are not transferable, nor do they carry any voting rights or other rights of a shareholder.

The holders of the warrants cannot net settle, and all exercises of such warrants must be completed in cash.

A summary of warrants activity is as follows:

Weighted-average

Exercise Price

Contractual Life

Outstanding at January 1, 2023

Outstanding at December 31, 2023

Outstanding at December 31, 2024

Exercisable at December 31, 2024

As of December 31, 2024 the outstanding and exercisable warrants have an intrinsic value of $ 0 and $ 0 , respectively.

approximately $ 52,000 of weekly sales receipts until the future receipts assigned under the Amended January 2024 SFR Agreement were repaid in full.

Accordingly, the term was determined to be approximately one year .

In connection with the Second January 30, 2024 SFR Agreement, the Company received an additional $ 1,054,286 (the “Additional Advance”).

Such amounts received were provided to the Company in error and are due and payable in full to the lender.

During September 2024, the Company entered into a note conversion agreements with one of the sale of future receipts agreement holders in which the Company converted the outstanding principal on the Amended January 2024 SFR Agreement, including accrued and unpaid interest, and the Additional Advance into shares of the Company’s common stock at a conversion price of $ 2.00 per share with a two share reset adjustments and a make-whole payment (see Note 12), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for each individual lender.

In connection with these agreements, $ 3,115,592 of secured promissory notes were extinguished in exchange for the issuance of 1,557,796 shares of the Company’s common stock (see Note 12).

On September 24, 2025, we entered into a Settlement and Termination Agreement with Libertas Funding, LLC (“Libertas”), resolving all outstanding obligations under the prior Agreement of Sale of Future Receivables and Debt Conversion Agreement.

Libertas terminated its senior secured lien and released all related financing statements and security interests.

We acknowledged a remaining principal balance of approximately $ 3,100,000 and agreed to a structured repayment plan providing for initial weekly payments followed by bi-monthly installments beginning in October 2025, with stepped increases tied to our planned uplisting.

The agreement also provides us the right to redeem 1,557,796 shares of our common stock held by Libertas for nominal consideration following full repayment.

The settlement eliminated the derivative features, and the obligation is presented as debt measured at amortized cost from the settlement date.

(See Note 11 for derivative derecognition.)

The Settlement and Termination Agreement was accounted for as an extinguishment of the derivative liability and recognition of a new debt obligation.

The related derivative liability was derecognized, and a new debt obligation was recorded at fair value, resulting in a discount to the face amount of $ 3,115,592 .

The difference between the carrying amount of the derivative liability extinguished and the fair value of the new debt resulted in a gain on extinguishment of approximately $ 293,598 , which was recognized in other (expense) income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025.

The discount is being amortized to interest expense over the repayment period using the effective interest method.

On November 17, 2025, Libertas Funding, LLC entered into three separate stock purchase agreements with third-party investors pursuant to which it sold an aggregate of 1,557,996 shares of the Company’s common stock for total cash consideration of $ 280,403.28 , or approximately $ 0.18 per share.

The proceeds from these transactions were contractually applied as a dollar-for-dollar offset against the Company’s outstanding payment obligations to Libertas under the existing Settlement and Termination Agreement, thereby reducing the debt balance by approximately $ 280,000 .

In connection with these transactions, the Company waived the applicable lock-up restrictions and relinquished its right to redeem the shares for nominal consideration of $1.00.

The Company evaluated the modification under ASC 470-50, including the 10% cash flow test in ASC 470-50-40-10, and concluded that the present value difference between the original and revised cash flows was less than 10 %.

Accordingly, the November 17, 2025 changes were accounted for as a debt modification rather than an extinguishment, no gain or loss was recognized in the consolidated statements of operations, and a new effective interest rate was computed prospectively based on the revised carrying amount and modified future cash flows, with the resulting discount amortized to interest expense over the remaining repayment period using the effective interest method.

Assumed 2024 Note

On the Closing Date, the Company assumed MCAC’s promissory note totaling $ 3,680,000 (the “Assumed 2024 Note”) that matures in July 2025.

The Company is obligated to pay 10.0 % of the aggregate gross proceeds from any sale of equity or equity derivative instruments of the Company while the Assumed 2024 Note is outstanding.

Five days prior to the maturity date (and only five days prior to the maturity date), the Company may elect to convert the Assumed 2024 Note into shares of the Company’s common stock based at the average volume weighted average price value for the five -business day period preceding the maturity date (subject to compliance with applicable rules of the Nasdaq).

The Assumed 2024 Note becomes due and payable following specified events of default if (i) the holder of the Assumed 2024 Note provides written notice if Company defaults on any payments due under the terms of the Assumed 2024 Note or (ii) automatically if the Company commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under bankruptcy or other similar laws.

The Company has not received written notice from the holder of the Amended 2024 Note in regards to the missed initial mandatory payment as of December 31, 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Purchase of subsidiary’s stock

In May 2024, the Company paid $ 60,000 and settled a Sellers Note of approximately $ 109,000 to acquire shares of a subsidiary from a noncontrolling interest holder (see Note 11).

The Company’s ownership of the subsidiary increased from 90.0 % as of December 31, 2023 to 95.0 % as of May 31, 2024.

The Company paid $ 50,000 of the initial mandatory payment of $ 500,000 within thirty calendar days of the effective date of the Assumed 2024 Note, and such triggered an event of default.

STOCK BASED COMPENSATION

47 unchanged sentences

Accordingly, the Company determined 600,000 shares of its common stock would be issued to settle its obligation under the CMA Agreement and determined the fair value of the CMA Agreement was $ 1,428,000 using the closing share price on the date of issuance.

These shares were issued during the year ended December 31, 2024

For the year ended December 31, 2024, $ 659,077 was recognized as selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive loss for these restricted stock grants.

As of December 31, 2024, $ 768,923 of unrecognized expense is included as a component of prepaid expenses on the accompanying consolidated balance sheets and is expected to be recognized over a weighted average service period of 0.5 years.

During the year ended December 31, 2025, the remaining $ 768,923 of previously unrecognized expense was fully recognized as selling, general and administrative expense, and no unrecognized expense related to these restricted stock grants remained as of December 31, 2025.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Restricted stock grants

Restricted stock grants and stock issuances

During July 2024, the Company entered into a six-month term marketing services agreement under which the company issued 150,000 restricted shares of the Company’s common stock with a fair value of $ 178,500 , as determined on the issuance date using the reported closing share price, as consideration for services to be performed.

2 unchanged sentences

The restriction on the shares is lifted at the time the shares are included on a registration statement that is declared effective

As of December 31, 2024, there were 285,000 restricted shares of the Company’s common stock that were issued and outstanding were unvested.

For the year ended December 31, 2024, $ 178,396 was recognized as selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive loss for these restricted stock grants.

As of December 31, 2024, $ 122,954 of unrecognized expense is included as a component of prepaid expenses on the accompanying consolidated balance sheets and is expected to be recognized over a weighted average service period of 0.2 years.

As of December 31, 2025 and 2024, there were 3,376,332 and 285,000 shares of the Company’s common stock that were issued and outstanding.

For the year ended December 31, 2025 and 2024, $ 1,460,258 and $ 178,396 was recognized as selling, general and administrative expense on the accompanying consolidated statements of operations and comprehensive loss for these restricted stock grants based on the fair value of stock on the date of issuance.

During 2025, 1,013,023 shares was granted to Non-employees and 2,363,309 shares was granted to Director and employee, out of which 550,000 shares are granted to related parties.

During 2024, the entire number of shares was granted to non-employees.

As of December 31, 2025 and 2024, $ 82,975 and $ 122,954 of unrecognized expense is included as a component of prepaid expenses on the accompanying consolidated balance sheets and is expected to be recognized over a weighted average service period of 0.2 years.

There were no restricted stock grants prior to July 2024.

DERIVATIVE FINANCIAL INSTRUMENTS

Debt conversion share adjustment obligations

Share Reset Derivative Liabilities :

In connection with five conversion agreements entered into during September 2024, the Company provided vendors and lenders with a one-time share reset adjustment (the “Share Reset”) such that the vendors and lenders would receive additional shares equal to the difference between the number of shares of the Company’s common stock that would be issued at the reset price on the reset date less the number of Conversion Shares.

Three of these conversion agreements were with related parties.

The reset price was set to be the greater of the VWAP of the Company’s common stock for the five trading days preceding the reset date or $ 1.25 .

The reset day was defined as the earlier of (i) six months from the date of the conversion agreement and (ii) the date that a registration statement registering the conversion shares is declared effective.

If the reset price is less than $ 2.00 per share, additional shares shall be issued to the vendors and lenders equal to the quotient obtained by dividing the (i) product of (A) the conversion price of $ 2.00 less the reset price and (B) the number of Conversion Shares by (ii) the reset price.

The Share Reset feature was analyzed in accordance with ASC 815 and determined to be a financial instrument that was required to be bifurcated and accounted for as a derivative liability, which was recorded at fair value at inception and re-measured to fair value each reporting period.

On March 31, 2025, 2,737,168 shares were issued in accordance with the terms of the Share Reset provisions on five conversion agreements at a fair value of $ 1,712,005 , as determined by the closing price on the date of issuance, extinguishing the Company’s share adjustment obligations pursuant to the respective conversion agreements.

Forward Purchase Agreement :

2 unchanged sentences

The FPA liability was recorded as part of the Business Combination, and as such was recorded at MCAC’s historical cost on the Closing Date.

The FPA was accounted for as a derivative financial instrument that was re-measured to fair value in each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss (see Note 14).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the terms of the FPA, immediately subsequent to the closing of the Business Combination, the Company paid to Meteora an aggregate cash amount of approximately $ 36,543,000 (the “Prepayment Amount”), which was equal to (i) the product of (a) the Recycled Shares and (b) the Initial Price, (ii) less 1.0 % of the product of (a) the Recycled Shares and (b) the Initial Price (the “Prepayment Shortfall”).

5 unchanged sentences

● Prepayment Shortfall to 0.5 % of the product of the number of Recycled Shares and the Initial Price and permitting the Company to request shortfall payments in intervals of $ 300,000 after Meteora has recovered 120.0 % of the Prepayment Shortfall.

Accordingly, the Company wrote off the other receivable totaling $ 185,000 owed from Meteora for one -half of

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

the 1.0 % of the Prepayment Shortfall that was included as a component of other current assets on the accompanying consolidated balance sheets.

Accordingly, the Company wrote off the other receivable totaling $ 185,000 owed from Meteora for one -half of the 1.0 % of the Prepayment Shortfall that was included as a component of other current assets on the accompanying consolidated balance sheets.

● Reset Price to the lower of (a) the then current Reset Price, (b) the Initial Price, (c) the volume-weighted average price (the “VWAP”) of the Shares of the prior week, but not lower than $ 2.00 , provided the Reset Price may be further reduced pursuant to a Dilutive Offering Reset (as defined in the FPA).

2 unchanged sentences

The FPA Amendment was deemed to be a modification and the Company recognized a gain of $ 1,547,236 on the modification of the FPA, which is net of the amount due from Meteora for one -half of the 1.0 % of the Prepayment Shortfall, and is included as a component of other income (expense) in the consolidated statements of operations and comprehensive loss.

In December 2024, the Company and Meteora amended the 2024 FPA (the 2024 FPA as amended, the “Amended 2024 FPA” and the amendment to the 2024 FPA, the “Second FPA Amendment”), whereby Meteora waived the requirement to adjust the Reset Price for a dilutive offering and the VWAP Trigger Event through December 31, 2025 that may occur in connection with the Company entering into the SEPA (see Note 12).

In exchange for the entering into the Second FPA Amendment, the Company released 500,000 shares of the Company’s common stock held by Meteora from their designation as Recycled Shares.

2 unchanged sentences

provided the Reset Price may be further reduced pursuant to a Dilutive Offering Reset (as defined in the FPA)

● Prepayment shortfall to 0.5 % of the product of the number of Recycled Shares and the Initial Price and permitting the Company to request shortfall payments in intervals of $ 300,000 (at any time up to forty-five calendar days prior to the Valuation Date) after (i) Meteora has recovered 130.0 % of the Prepayment Shortfall and (ii) the VWAP Price over the ten trading days prior to an Additional Shortfall Request multiplied by the then current number of shares (excluding unregistered shares) held by Meteora less Shortfall Sale Shares be at least seven times greater than the Additional Shortfall Request and (iii) the average daily value traded over the prior ten trading days be at least seven times greater than the Additional Shortfall Request (with (i), (ii), and (iii) collectively the “Equity Conditions”).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

trading days be at least seven times greater than the Additional Shortfall Request (with (i), (ii), and (iii) collectively the “Equity Conditions”).

Meteora has the right, but not the obligation to waive the Equity Conditions for each Additional Shortfall Request.

During the year ended December 31, 2024, Meteora sold 1,044,576 shares pursuant to the 2024 FPA and the Company received cash proceeds of $ 1,000,000 .

On April 2, 2025, the Company entered into a mutual termination agreement with Meteora to terminate the Amended 2024 FPA (the “FPA Termination Agreement”) in exchange for termination consideration of $ 500,000 .

On April 2, 2025, the Company entered into a mutual termination agreement with Meteora Capital Partners, LP (“Meteora”) to terminate the Amended 2024 FPA (the “FPA Termination Agreement”) in exchange for termination consideration of $ 500,000 .

Pursuant to the FPA Termination Agreement, the 1,618,948 shares of the Company’s common stock that Meteora held as of the termination date of April 2, 2025 were deemed free and clear of all obligations, the number of Recycled Shares was equal to zero , and the Prepayment Shortfall was deemed to be zero .

The Company received the termination consideration from Meteora in April 2025.

Debt conversion adjustment obligations

Share Reset Derivative Liabilities:

In connection with five conversion agreements entered into during September 2024 (see Note 11, Note 18 and Note 19), the Company provided vendors and lenders with a one-time share reset adjustment (the “Share Reset”) such that the vendors and lenders would receive additional shares equal to the difference between the number of shares of the Company’s common stock that would be issued at the reset price on the reset date less the number of Conversion Shares.

Three of these conversion agreements were with related parties (see Note 18).

The reset price was set to be the greater of the VWAP of the Company’s common stock for the five trading days preceding the reset date or $ 1.25 .

The reset day was defined as the earlier of (i) six months from the date of the conversion agreement and (ii) the date that

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

a registration statement registering the conversion shares is declared effective.

If the reset price is less than $ 2.00 per share, additional shares shall be issued to the vendors and lenders equal to the quotient obtained by dividing the (i) product of (A) the conversion price of $ 2.00 less the reset price and (b) the number of Conversion Shares by (ii) the reset price.

The Share Reset feature was analyzed in accordance with ASC 815 and determined to be a financial instrument that was required to be bifurcated and accounted for as a derivative liability that was recorded at fair value at inception and re-measured to fair value each reporting period (see Note 15).

In March 31, 2025, 2,737,168 shares were issued in accordance with the terms of the Share Reset on five of the related conversion agreements extinguishing the Company’s obligations under those agreements.

November 2024 Consideration Adjustment Derivative Liabilities:

In connection with two conversion agreements entered into during November 2024 (see Note 11 and Note 19), the Company provided a vendor and a lender with a one-time consideration adjustment (the “November 2024 Consideration Adjustment”) such that the vendor and lender would receive a payment equal to the product of (i) the conversion price of $ 1.25 less the reset price and (ii) the number of the Conversion Shares held by the vendor and lender on the reset date in cash, or other immediately available funds, if the reset price is less than $ 1.25 per share.

The reset price was set to be the greater of the VWAP of the Company’s common stock for the five trading days preceding the reset date or $ 1.25 .

The reset date was defined as the later of (i) ninety days from the date of the conversion agreement and (ii) the date that a registration statement registering the conversion shares is declared effective.

The November 2024 Consideration Adjustment feature was analyzed in accordance with ASC 815 and determined to be a financial instrument that was required to be bifurcated and accounted for as a derivative liability that was recorded at fair value at inception and re-measured to fair value each reporting period (see Note 15).

December 2024 Consideration Adjustment Derivative Liability:

In connection with one conversion agreement entered into during December 2024 (see Note 19), the Company provided a vendor with a one-time consideration adjustment (the “December 2024 Consideration Adjustment”) after the reset date such that the vendor is required to sell the Conversion Shares after the reset date over a twenty day period (with no more than 5.0 % of shares sold per trading day) (collectively, the “Sale Dates”).

The vendor is entitled to receive a payment in cash, or other immediately available funds, equal to the amount the proceeds from the Sale Dates is less than the difference of the carrying value of the associated converted outstanding obligations.

The December 2024 Consideration Adjustment feature was analyzed in accordance with ASC 815 and determined to be a financial instrument that was required to be bifurcated and accounted for as a derivative liability that was recorded at fair value at inception and re-measured to fair value each reporting period (see Note 15).

First Reset Shares, Second Reset Shares and Make-Whole Payment Derivative Liabilities:

In connection with one conversion agreement entered into September 2024 in connection with the Amended January 2024 SFR Agreement (see Note 18), the Company provided a lender with two share reset adjustments and a make-whole payment provision such that the lender would receive additional shares as follows:

● On the first reset date, which is eighteen weeks from the date a registration statement filed with the SEC registering the conversion shares is declared effective, if the first reset price, calculated as the greater of the VWAP of the Company’s common stock for the five trading days preceding the first reset date or $ 1.25 , is less than $ 2.00 , then the Company shall, at the lender’s election, either

o issue to the lender an additional number of shares of the Company’s common stock equal to the quotient obtained by dividing the product of (a) the conversion price of $ 2.00 less the first reset price and (b) the number of Conversion Shares held by the lender on the first reset date by (c) the first reset price (the “First Reset Shares”) or

o pay to the lender an amount equal to the product of (a) the conversion price of $ 2.00 less the first reset price and (b) the number of Conversion Shares held by the lender on the first reset date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

● On the second reset date, which is thirty-six weeks from the date a registration statement filed with the SEC registering the conversion shares is declared effective, if the second reset price, calculated as the greater of the VWAP of the Company’s common stock for the five trading days preceding the second reset date (the “Second Reset Date Market Price”) or $ 1.25 , is less than $ 2.00 , then the Company shall, at the lender’s election, either

o issue to the lender an additional number of shares of the Company’s common stock equal to the quotient obtained by dividing the product of (a) the first reset price less the second reset price and (b) the number of Conversion Shares held by the lender on the second reset date by (c) the second reset price (the “Second Reset Shares”) or

o pay to the lender an amount equal to the product of (a) the first reset price less the second reset price and (b) the number of Conversion Shares held by the lender on the second reset date.

● On the second reset date, if the Second Reset Date Market Price is less than $ 1.25 , then the Company owes the lender an amount equal to the product of (a) $ 1.25 less the Second Reset Date Market Price and (b) the number of Conversion Shares, including the second reset shares held by the lender on the second reset date (the “Make-Whole Payment”).

The First Reset Shares, the Second Reset Shares, and the Make-Whole Payment were analyzed in accordance with ASC 815 and determined to be financial instruments that was required to be bifurcated and accounted for as a single derivative liability that was recorded at fair value at inception and re-measured to fair value each reporting period (see Note 15).

SEPA Derivative Liability

The SEPA (see Note 12) was determined to be a freestanding financial instrument which did not meet the criteria to be accounted for as a derivative instrument or to be recognized within equity.

Pursuant to ASC 815, the Company will therefore recognize the SEPA Option as an asset or liability, measured at fair value at the date of issuance and in subsequent reporting periods, with changes in fair value recognized in earnings.

The SEPA Option was determined to have a fair value of $ 65,114 on the date of issuance and at December 31, 2024 (see Note 15).

Shares to be issued at settlement of derivative liabilities

The shares of the Company’s common stock to be issued to settle the above derivative liabilities is dependent on the share price at a future date, and as such, it is not an amount that can be estimated as of December 31, 2024.

There is no limit to the number of shares that can be issued to settle the agreements in the respective arrangements.

The Company received termination consideration of $ 500,000 from Meteora in April 2025.

Pursuant to the FPA Termination Agreement, the Company recorded a change in fair value of $ 971,000 during the year ended December 31, 2025.

Libertas Settlement and Termination Agreement :

On September 24, 2025, the Company executed a Settlement and Termination Agreement with Libertas that terminated the derivative features under the prior Agreement of Sale of Future Receivables and Debt Conversion Agreement.

FAIR VALUE MEASUREMENTS

2 unchanged sentences

Derivative liabilities

3(a)(10) Settlement Agreement

Contingent consideration

1 unchanged sentence

Total liabilities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth by level, within the fair value hierarchy, the Company’s liabilities, including financial liabilities for which the Company has elected the fair value option, measured and recorded at fair value on a recurring basis as of December 31, 2024:

Convertible notes payable

Total liabilities

The Company did no t have any assets measured and recorded at fair value on a recurring basis as of December 31, 2023.

The Company did no t make any transfers into or out of Level 3 of the fair value hierarchy during the years ended December 31, 2024 and 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of our assets and liabilities measured at fair value using Level 3 inputs:

Forward purchase agreement

2 unchanged sentences

Convertible debt

Total liabilities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company did not make any transfers into or out of Level 3 of the fair value hierarchy during the years ended December 31, 2025 and 2024.

The following table provides a reconciliation of our assets and liabilities measured at fair value using Level 3 inputs:

consideration

Balance, December 31, 2024

( 4,229,478 )

Conversion to shares of Legacy ConnectM's common stock

Assumed from Business Combination

( 8,542,323 )

( 3,680,000 )

Cash payment/(receipt)

( 11,624,000 )

( 8,762,250 )

Settlement through issuance of Company's common stock and other adjustment **

Gain on extinguishment of debt and vendor payable

Loss on issuance of financial instruments

Additional RJZ settlement amount*

Reclass from level 3

Change in fair value

( 2,146,284 )

( 1,707,747 )

Reclass out of Level 3

Gain from modification

Releases of Recycled Shares as consideration for Forward Purchase Agreement modification

Day one gain on issuance

Cash payments

cash received

( 1,000,000 )

Ending balance, December 31, 2025

1 unchanged sentence

( 5,321,303 )

Convertible Notes Payable (fair value option)

Contingent Consideration also includes current portion of crystallized contingent consideration amounting to $ 417,163 and RJZ settlement amounting to $ 1,024,001 which are not included in the table above as these are not fair valued.

Other adjustment consist of $ 3,630,000 related to convertible debt liabilities transferred to 3(a)(10) and settlement of derivative liabilities of Libertas amounting to $ 2,648,508 by way of extinguishment (refer Note 11).

Fair Value of Level 3 Financial Instruments

Certain financial instruments, including SEPA convertible notes, instruments related to 3(a)10 Settlement Agreement and Derivative Liabilities contain embedded features that require bifurcation and measurement at fair value under ASC 815.

These instruments are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.

In prior periods, the Company utilized a Monte Carlo simulation model to estimate fair value where valuation depended on future stock price variability and path-dependent assumptions.

As of December 31, 2025, for certain convertible notes, the reset provisions were based on the Company’s closing stock price at year-end and were not dependent on future contingent events, and accordingly fair value was determined using the intrinsic value of the reset feature at the measurement date.

For other convertible notes where the settlement outcome remained uncertain, the Company applied a probability-weighted pay-off approach, assigning probabilities to each potential settlement scenario (e.g., cash repayment, conversion, or default) to estimate the fair value of the embedded derivative at the reporting date.

Convertible Notes Payable

The Company’s carrying value and fair value for the convertible notes payable for which the Company elected the fair value option is as follows:

3 unchanged sentences

Carrying Value

Amended 2022 Convertible Notes

2024 Convertible Notes

2 unchanged sentences

SEPA Convertible Note*

The change in fair value on convertible debt resulted in a loss of approximately $ 1,708,000 and a gain of approximately $ 25,000 for the years ended December 31, 2024 and 2023, which was recorded as a component of other income on the accompanying consolidated statements of operations and comprehensive loss.

Amended 2022 Convertible Notes, 2023 Convertible Notes, and 2024 Convertible Notes:

The Amended 2022 Convertible Notes, 2023 Convertible Notes, and 2024 Convertible Notes are re-measured to fair value at each reporting period using the following relevant assumptions:

* SEPA convertible note includes the SEPA option derivative liability of $ 65,114 as on December 31, 2024.

The change in fair value on convertible debt resulted in a loss of approximately $ 2,146,000 and a loss of approximately $ 1,708,000 for the years ended December 31, 2025 and 2024, which was recorded as a component of other income (expense) on the accompanying consolidated statements of operations and comprehensive loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2024 Convertible Notes, and 2025 Convertible Notes:

The 2025 Convertible Notes, and 2024 Convertible Notes are re-measured to fair value at each reporting period using the following relevant assumptions:

December 31, 2025

2 unchanged sentences

Probability of conversion at maturity scenario

Probability of voluntary conversion scenario

Probability of automatic conversion scenario

Remaining term for conversion at maturity scenario

Probability of voluntary conversion scenario/event of default scenarios

Remaining term for conversion at maturity scenario/event of default scenarios

0.01 - 0.52 years

2 unchanged sentences

0.01 - 0.52 years

Remaining term for automatic conversion scenario

Assumed 2024 Note:

The fair value of the Assumed 2024 Note is re-measured to fair value at each reporting period using unobservable inputs, the most significant of which was the expected average volume weighted average price for a share of the Company’s common stock for the five -business day period preceding the maturity date of the Company at the maturity date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

0.01 - 0.03 years

SEPA Convertible Note:

The fair value of the SEPA Convertible Note was determined utilizing a Monte Carlo simulation considering the following relevant assumptions:

The fair value measurement of the SEPA Convertible Note is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs (refer to Note 8).

As of December 31, 2025, following entry into the Settlement and Termination Agreement with Yorkville dated December 29, 2025, the Company’s obligation under the SEPA Convertible Note was restructured into fixed bi-weekly installment payments of $ 250,000 on the outstanding balance of $ 1,386,975 , with final settlement expected upon consummation of the Company’s planned uplisting on or about March 31, 2026.

Accordingly, the fair value of the SEPA Convertible Note as of December 31, 2025 was $ 1,543,000 , as determined by an independent third-party valuation firm using a discounted cash flow methodology applied to the scheduled installment payments.

The key assumptions used in the valuation were as follows:

December 31, 2025

Valuation technique

Discounted cash flow of scheduled installment payments

Outstanding balance

Bi-weekly payment amount

Expected IPO / settlement date

March 31, 2026

Discount rate

Fair value of outstanding balance

Termination fee (payable in Common Stock at IPO price)

Fair value of SEPA (post-termination)

Total fair value of Pre-Paid Advance Obligation

The discount rate of 15.0 % was selected based on an analysis of market-based rates of return, including the ICE BofA CCC & Lower US High Yield Index ( 12.5 %), the S&P U.S.

High Yield Corporate Bond CCC index ( 15.7 %), and the Pepperdine Private Capital Markets mezzanine required rate of return ( 19.0 %).

The fair value measurement is subject to estimation uncertainty, as it is sensitive to changes in the discount rate and the timing of the expected IPO.

Pursuant to the Settlement and Termination Agreement, the SEPA was terminated, and its value was determined to be zero ;

accordingly, the remaining obligation consists solely of the scheduled installment payments and the termination fee.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As on December 31, 2024 the fair value of the SEPA Convertible Note was determined utilizing a Monte Carlo simulation considering the following relevant assumptions:

December 31, 2024

6 unchanged sentences

The change in fair value on the forward purchase agreement resulted in a net loss of approximately $ 8,254,390 and a gain on modification of the forward purchase agreement was approximately $ 1,572,236 for the year ended December 31, 2024, which was recorded as a component of other income on the accompanying consolidated statements of operations and comprehensive loss.

The fair value of the FPA was re-measured to fair value at assumption and immediately prior to the modification utilizing a Black-Scholes option pricing model that utilizes the following relevant assumptions:

August 2, 2024 (modification)

July 12, 2024 (assumption)

Expected term

Price per share of Company's common stock

Exercise price

Risk-free interest rate

Dividend rate

Probability of completing the Business Combination

The FPA Amendment provide two settlement options whereby the 2024 FPA can be settled either at maturity if shares of the Company’s common stock are trading above $ 2.00 per share (the “Maturity Settlement Scenario”) or at the Company’s request for a prepayment short-fall whereby the Company requests Meteora to sell shares (the “Prepayment Shortfall Scenario”).

The Second FPA Amendment also provides a Maturity Settlement Scenario and a Prepayment Shortfall Scenario, with a revised definition for the Prepayment Shortfall Scenario (see Note 14).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the 2024 FPA was re-measured to fair value at each subsequent reporting period and immediately prior to its modification in December 2024 and the fair value of the Amended 2024 FPA was measured at fair value immediately subsequent to the modification in December 2024 and each subsequent reporting period utilizing a Monte Carlo simulation model that applies a probability of occurrence to the present value of each settlement scenario.

The fair value of the Amended 2024 FPA was measured at fair value at December 31, 2024 utilizing a Monte Carlo simulation model that applies a probability of occurrence to the present value of each settlement scenario.

Amended 2024 FPA

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Expected margin from Meteora’s sale of Recycled Shares

Contingent consideration obligation

The change in fair value of the contingent consideration obligation resulted in a loss of approximately $ 60,000 for the year ended December 31, 2024, which was recorded as a component of other income on the accompanying consolidated statements of operations and comprehensive loss.

The fair value of the contingent consideration obligation was measured to fair value at inception and re-measured at each reporting period utilizing a Monte Carlo simulation considering the following relevant assumptions:

December 31, 2024

August 2, 2024

(acquisition)

Operating leverage

Revenue volatility

EBITDA volatility

Earnout risk free rate

Long-term risk-free rate

Weighted average cost of capital

Correlation between revenue and EBITDA

Discount rate

Term to payment

0.1 - 7.1 years

0.5 - 7.5 years

Derivative Liabilities

The change in fair value of the derivative liabilities resulted in a loss of approximately $ 187,000 and a day one gain on the issuance of the SEPA was approximately $ 135,000 for the year ended December 31, 2024, which were recorded as a component of other income on the accompanying consolidated statements of operations and comprehensive loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Debt conversion share adjustment obligations:

The fair value of the derivative liabilities issued in connection with the September 2024 debt conversion agreements were determined using Monte Carlo simulations considering the following relevant assumptions at the date of issuance and each subsequent reporting period:

December 31, 2024

September 24, 2024

September 12, 2024

Price per share of Company's common stock

Equity volatility

Reset price floor

Reset price ceiling

Remaining term - First Reset Date

0.19 - 0.62 years

0.50 - 0.89 years

Forecasted per share of Company's common stock - Reset Date

Risk-fee rate - Reset Date

Drift term - Reset Date

Forecasted five day VWAP per share of Company's common stock - First Reset Date

Risk-fee rate - First Reset Date

Drift term - First Reset Date

Remaining term - Second Reset Date

Forecasted five day VWAP per share of Company's common stock - Second Reset Date

Risk-fee rate - Second Reset Date

Drift term - Second Reset Date

November 2024 Consideration Adjustment Derivative Liabilities:

The fair value of the November 2024 Consideration Adjustment Derivative Liabilities was determined using a Monte Carlo simulation considering the following relevant assumptions at the date of issuance and each subsequent reporting period:

December 31, 2024

November 13, 2024

Remaining term

Price per share of Company's common stock

Risk-free rate

Forecasted per share of Company's common stock - Reset Date

December 2024 Consideration Adjustment Derivative Liability:

The fair value of the December 2024 Consideration Adjustment Derivative Liability was determined using a Monte Carlo simulation considering the following relevant assumptions at the date of issuance and each subsequent reporting period:

December 31, 2024

December 27, 2024

Remaining term

July 12, 2024

(modification)

Expected term

Price per share of Company’s common stock

Risk-free rate

Forecasted per share of Company's common stock - Sale Dates

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPA Derivative Liability:

The fair value of the SEPA Derivative Liability was determined using a Monte Carlo simulation considering the following relevant assumptions at the date of issuance and each subsequent reporting period:

December 31, 2024

December 17, 2024

Remaining term

Risk-free rate

Conversion price for payments to be made through issuance of Company's common stock

Payments to be made through issuance of shares of Company's common stock

Payments to be made in cash

Prepayment premium

The Company has operating and finance leases for its corporate offices, call centers and vehicles.

The following table provides a summary of the components of lease costs, which are included within cost of revenue and selling, general and administrative on the accompanying consolidated statements of operations and comprehensive loss, for the years ended December 31:

Operating lease costs

Short-term lease costs

Finance lease costs

Amortization of ROU assets

Interest on lease liabilities

Total lease costs

The following table provides the weighted-average lease terms and discount rates for the Company’s operating and finance leases at December 31:

Weighted-average remaining lease term (in years)

Operating leases

Finance leases

Weighted-average discount rate

Operating leases

Finance leases

The following tables provides a summary of lease liability maturities as of December 31, 2024:

Operating Leases

Total undiscounted lease payments

imputed interest

Total lease liabilities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The components of the income tax provision (benefit) are as follows:

Years ended December 31,

Total Current

Total Deferred

Total income taxes

The Company is subject to a federal income tax rate of 21.0 %.

Additionally, the Company is subject to a blended state income tax rate of 6.3 % net of federal benefits.

Lastly, the Company is subject to a foreign income tax rate as it relates to its India-based subsidiary of 0.0 %.

The Company has an effective tax rate of 0.0 % for the years ended December 31, 2024 and 2023, due to the fact that the Company is in a full valuation allowance position.

The principal components of deferred income tax assets, net, were as follows:

Years ended December 31,

Deferred tax assets

Amortization and impairment

Net operating losses

Deferred tax assets

Valuation allowance

( 8,888,489 )

( 5,207,943 )

Total deferred tax assets

Deferred tax liabilities

Depreciation, amortization, and impairment

Deferred tax liabilities

Net deferred tax assets

As of December 31, 2024 and 2023, the Company had Federal and state net operating loss carryforwards of approximately $ 34,598,000 and $ 31,092,000 which are available to offset future taxable income.

They are due to expire starting in 2026.

Federal net operating losses occurring after December 31, 2017, of approximately $ 31,182,000 may be carried forward indefinitely.

A valuation allowance has been established for the full amount of net deferred income tax assets as management has concluded that it is more likely than not that the benefits from such assets will not be realized.

RELATED PARTY TRANSACTIONS

Sponsor of MCAC

In connection with the closing of the Business Combination, the Company assumed unsecured promissory notes totaling approximately $ 555,000 that are non-interest bearing and due on demand and advances totaling approximately $ 132,000 that are non-interest bearing and due on demand with the Sponsor of MCAC.

During September 2024, the Company entered into a note conversion agreement with the Sponsor of MCAC in which the Company converted the outstanding principal on unsecured promissory notes and

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

certain other liabilities owed to the note holders into shares of the Company’s common stock at a conversion price of $ 2.00 per share with a one-time share reset adjustment (see Note 14), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for each individual lender.

In connection with these agreements, approximately $ 555,000 of unsecured promissory notes and approximately $ 132,000 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 343,248 shares of the Company’s common stock (see Note 12).

As of December 31, 2024, the fair value of the derivative liabilities associated with the reset adjustment was approximately $ 158,000 and was included as a component of derivative liabilities on the accompanying consolidated balance sheets.

For the year ended December 31, 2024, the Company recorded a change in fair value on these derivative liabilities of $ 26,000 , which was included as a component of change in fair value of derivative liabilities on the accompanying consolidated statements of operations and comprehensive loss.

Related Party Investors

These two lenders are collectively referred to as the Related Party Investors.

As of December 31, 2024, the fair value of the derivative liabilities associated with the reset adjustment granted to each Related Party Investor was approximately $ 1,146,000 and $ 624,000 and were included as a component of derivative liabilities on the accompanying consolidated balance sheets.

For the year ended December 31, 2024, the Company recorded a change in fair value on these derivative liabilities of $ 192,000 and $ 104,000 , which were included as a component of change in fair value of derivative liabilities on the accompanying consolidated statements of operations and comprehensive loss.

The Related Party Investors collectively own 100 % of an entity that has controlling interest in four customers within the managed solutions operating segment (the “Related Party Managed Solutions Customers”).

The Company acquired one of these customers, GEG, in October 2024 from the entity owned by Related Party Investors (see Note 6).

From the period between when the related party relationship was triggered in September 2024 through December 31, 2024, the Company earned revenue totaling approximately $ 644,000 , incurred cost of revenues totaling approximately $ 188,000 , and incurred selling, general and administrative expenses totaling approximately $ 517,000 from the remaining three Related Party Managed Solutions Customers.

As of December 31, 2024, the Company was owed approximately $ 349,000 for managed services from the Related Party Managed Solutions Customers, which was included as a component of accounts receivable on the accompanying consolidated balance sheets and approximately $ 102,000 for working capital advances from the Related Party Managed Solutions Customers, which was included as a component of working capital advances on the accompanying consolidated balance sheets.

As of December 31, 2024, the Company owed approximately $ 28,000 to the Related Party Managed Solutions Customers.

Prior to the date the related party relationship was triggered, each Related Party Investors had entered into secured promissory notes that remained outstanding as of December 31, 2024 totaling $ 1,750,000 and $ 1,400,000 and were included as a component of debt, net on the accompanying consolidated balance sheets.

Accrued interest on the notes remaining outstanding as of December 31, 2024 totaled approximately $ 384,000 and $ 289,000 and are included as a component of accrued expenses on the accompanying consolidated balance sheets.

Related Party Lender

The Company has two unsecured promissory notes with a company owned by the Company’s chief executive officer (see Note 11).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On October 10, 2024, the Company issued this related party a convertible note with a principal amount of $ 800,000 .

The note has an interest rate of 20 % and a maturity date of April 8, 2025.

The note is convertible during the first 90 days after issuance at a conversion price of $ 1.10 .

The Company accounts for these convertible notes using the fair value option.

As of December 31, 2024, the carrying amount of the note and accrued interest was $ 800,000 and $ 35,945 , respectively.

As of December 31, 2024, the fair value of this note was approximately $ 837,000 .

On October 10, 2024, the Company issued this related party a convertible note with a principal amount of $ 400,000 .

The note has an interest rate of 20 % and a maturity date of June 1, 2025.

The note is convertible during the first 90 days after issuance at a conversion price of $ 1.10 .

The Company accounts for these convertible notes using the fair value option.

As of December 31, 2024, the carrying amount of the note and accrued interest was $ 400,000 and $ 6,137 , respectively.

As of December 31, 2024, the fair value of this note was approximately $ 418,000 .

COMMITMENTS AND CONTINGENCIES

Legal and regulatory proceedings:

The Company is subject to various routine litigation, legal proceedings, and regulatory matters, that arise in the ordinary course of its business.

T he Company reviews its lawsuits, regulatory matters, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance.

In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated.

If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the consolidated financial statements

The Company accrues for potential liability arising from legal proceedings and regulatory matters when it is probable that such liability has been incurred and the amount of the loss can be reasonably estimated.

This determination is based upon currently available information for those proceedings in which the Company is involved, taking into account its best estimate of such losses for those cases for which such estimates can be made.

The Company’s estimate involve significant judgement, given the varying stages of proceedings (including issues regarding class certification and the scope of many of the claims), and the related uncertainty of the potential outcomes of these proceedings.

In making determinations of the likely outcome of pending litigation, the Company considers many factors, including, but not limited to, the nature of the claims, the Company’s experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative mechanisms, the matter’s current status and the damages sought or demands made.

Accordingly, the Company’s estimate will change from time to time, and actual losses could be more or less than the current estimate.

As of December 31, 2024 and 2023, there are no matters for which a reserve is required to be established.

On February 26, 2024, a suit was filed against the Company alleging various contract claims arising out of a business the Company acquired in 2022 and certain real estate from which the Company operates, including breach of the stock purchase agreement and certain promissory notes in connection with the business acquisition as well as breach of a services agreement with the seller of the business.

The Company believes the claims have no merit and plans to assert counterclaims.

As of December 31, 2024, the case was in arbitration.

In January 2025, the Company entered into a settlement agreement related to a dispute on an employment agreement under which the Company is required to issue 26,087 shares of the Company’s common stock to an individual promptly within seven-days of the execution of the agreement unless the individual has revoked the agreement as permitted.

As per the terms of the existing settlement agreement, the individual is provided a one-time adjustment payable in case on the reset date if the reset price is less than $ 1.15 , then the Company owes the individual an amount equal to the product of (a) $ 1.15 less than VWAP of the Company’s common stock for the five trading days preceding the reset date and (b) the 26,087 shares of the Company’s common stock.

The reset date is the later of (a) ninety days from the date of the agreement or (b) the date that the registration statement is declared effective.

As of the date these consolidated financial statements were issued, the shares of the Company’s common stock have not yet been issued as the individual’s legal counsel’s opinion is pending.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Settlement of vendor obligations through issuance of shares of the Company’s common stock with make - whole provision:

Extinguishment of Vendor Obligations:

On September 24, 2024, the Company entered into a conversion agreement with a vendor in which the Company converted the outstanding obligations owed to the vendor into shares of the Company’s common stock at a conversion price of $ 2.00 per share with a one-time share reset adjustment (see Note 14), subject to shareholder approval and a maximum aggregate ownership amount of 19.99 % for the vendor.

In connection with this agreement, approximately $ 539,000 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 269,648 shares of the Company’s common stock (see Note 12).

On November 13, 2024, the Company entered into a debt conversion agreement with a vendor in which the Company converted the outstanding obligations owed to the vendor into shares of the Company’s common stock at a conversion price of $ 1.25 per share with a one-time consideration adjustment (see Note 14).

In connection with this agreement, approximately $ 170,000 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 136,000 shares of the Company’s common stock (see Note 12).

On December 27, 2024, the Company entered into a debt conversion agreement with a vendor in which the Company converted the outstanding obligations owed to the vendor into shares of the Company’s common stock at a conversion price of $ 1.25 per share with a one-time consideration adjustment (see Note 14).

In connection with this agreement, approximately $ 258,000 of accounts payable and accrued expenses were extinguished in exchange for the issuance of 206,234 shares of the Company’s common stock (see Note 12).

Settlement Agreement:

The Company entered into a capital markets advisory agreement in June 2024 and subsequent amendment in July 2024 whereby the Company would pay the capital market advisor $ 600,000 as consideration for services provided in connection with the Business Combination.

The Company made cash payments totaling $ 75,000 during June 2024.

On October 2, 2024, the Company entered into a settlement agreement with a capital market advisor, pursuant to which the Company was required to make cash payments for the unpaid balance totaling $ 525,000 and issue 125,000 shares of the Company’s common stock as additional consideration.

The initial consideration of $ 600,000 were for services directly attributable to the Business Combination and reflected as offering costs that were recorded as a reduction to additional paid-in capital at closing of the Business Combination.

On October 2, 2024, the Company issued 125,000 shares of the Company’s common stock with a fair value of $ 133,750 , as determined on the issuance date using the reported closing share price and recorded the additional consideration as a component of selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss.

As of December 31, 2024, there were no amounts outstanding under this settlement agreement to the capital market advisor.

Retirement plan:

The Company maintains a defined contribution plan under Section 401(k) of the Internal Revenue Code and a defined contribution plan for employee’s individual retirement arrangements (IRA’s).

Employees may contribute between 1 % and 100 % of their wages, subject to the IRS limitations.

The Company has elected to make matching contributions of 100 % of the first 3 % of an employee’s compensation for both defined contribution plans.

For the years ended December 31, 2024 and 2023, the Company contributed approximately $ 76,000 and $ 77,000 , respectively.

REPORTABLE SEGMENTS

The Company’s operations are organized into four reporting segments:

Owned Service Network, Managed Solutions, Transportation, and Logistics.

The structure is designed to allow the Company to evaluate the performance of its different solutions offerings, provide improved service and drive future growth in a cost-efficient manner.

During the current year, the Company changed its reportable segments to better align with the way management evaluates performance and allocates resources.

Accordingly, the prior year segment information has been recast to conform to the current year presentation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Selected information by reportable segment is presented in the following tables:

Year ended December 31, 2024

Owned Service Network

Transportation

Cost of revenue

Selling, general and administrative expenses

Facility costs

Insurance expenses

Marketing and investor relations expenses

Operational expenses

Compensation and related benefits

Travel & entertainment

Vehicle expenses

MSA Working Capital Adjustment*

( 3,377,288 )

Total selling, general and administrative expenses

Loss on impairment

Income/(Loss) from operations

( 3,012,874 )

( 7,715,925 )

( 11,602,349 )

Other expense, net

( 10,905,859 )

( 2,990,995 )

( 18,621,784 )

( 22,508,208 )

Capital expenditures

* The MSA Working Capital Adjustment reflects a timing - related adjustment to Managed Solutions revenue and expenses.

In accordance with the Company's revenue recognition policy and ASC 606, the Company did not recognize solar installation revenue associated with certain Managed Services Agreements (MSAs) due to the absence of final certificates of completion as of the reporting date.

The adjustment also includes total segment costs and expenses incurred in excess of recognized revenue during the reporting period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2023

Owned Service Network

Transportation

Cost of revenue

Selling, general and administrative expenses

Facility costs

Insurance expenses

Marketing and investor relations expenses

Operational expenses

Compensation and related benefits

Travel & entertainment

Vehicle expenses

Total selling, general and administrative expenses

Loss on impairment

Income/(Loss) from operations

( 2,432,379 )

( 1,123,432 )

( 3,832,987 )

( 7,464,871 )

Other expense, net

( 1,733,983 )

( 2,432,379 )

( 1,123,432 )

( 5,566,970 )

( 9,198,854 )

Capital expenditures

The Company’s total assets located outside the United States is approximately $ 1,260,000 .

The following table summarizes disaggregated revenue information by geographic area based upon the customer’s country of domicile:

Year Ended December 31, 2024

Transportation

United States

Year Ended December 31, 2023

Transportation

United States

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the consolidated balance sheet date up to the date that the consolidated financial statements were issued.

Based upon this review, other than as described below or within these consolidated financial statements, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Issuances of shares of Company’s common stock

Consideration paid to vendors:

During May 2025, the Company entered into a services agreement with a vendor under which the Company issued 100,000 restricted shares of the Company’s common stock with a fair value of approximately $ 25,000 , as determined on the issuance date using the reported closing share price, as consideration for services to be performed over a three-month service period.

Nonemployee grants:

During May 2025 and June 2025, the Company issued 485,000 shares of the Company’s common stock to certain advisers with a fair value of approximately $ 108,000 , as determined on the issuance date using the reported closing share price.

Director and employee grants:

During May 2025 and June 2025, the Company issued 1,622,222 shares of the Company’s common stock to its directors and employees as consideration for past services performed with a fair value of approximately $ 372,000 , as determined on the issuance date using the reported closing share price.

Sale of Company’s common stock:

Pursuant to six securities purchase agreements entered into during May 2025 and June 2025, the Company sold 3,658,333 shares of the Company’s common stock for gross proceeds of approximately $ 805,000 at a per share issuance price that ranged between $ 0.18 and $ 0.25 per share.

Note exchange agreements:

During April 2025 and May 2025, the Company entered into twenty five note exchange agreements with twelve of its lenders under which sixteen secured promissory notes totaling $ 4,435,000 , nine convertible notes totaling $ 1,840,000 , and accrued interest and fees totaling $ 1,189,939 were exchanged for 15,290,930 shares of the Company’s common stock with a fair value of $ 8,224,386 , as determined on the issuance date using the reported closing share price.

Certain of these note exchanges involved related parties, including Arumilli LLC, SriSid LLC, Win-Light Global Co.

Ltd., and W4 Partners LLC.

The conversion price of the convertible notes was modified from the stated rate in the respective convertible notes agreements to the five -day VWAP preceding the conversion date.

Shares of the Company’s common stock under these note exchange agreements were issued pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act that such issuance did not constitute a public offering.

Business combination:

In April 2025, the Company entered into a stock purchase agreement with an entity (the “Seller”), for the purposes of acquiring from the Seller all of the issued and outstanding equity securities of Air Temp Service Co, Inc.

(“Air Temp”) and Solar Energy Systems of Brevard, Inc (“SES”) in exchange for the issuance of 2,200,000 shares of the Company’s common stock.

Per the terms of the stock purchase agreement, if the Company is delisted from the NASDAQ within 90 -days of closing, the Company is required to issue an additional 2,700,000 shares of the Company’s common stock.

As a result of the Company’s delisting (see Note 3), the Company issued an additional 2,700,000 shares of the Company’s common stock.

The total fair value of the 4,900,000 shares of the Company’s common stock issued as consideration to the Seller was approximately $ 3,200,000 , as determined using the closing share price on the date of issuances, in May 2025.

Air Temp Services is considered a related party due to its ownership by SriSid LLC and Arumilli LLC, which are related parties to the Company.

The Company had a Managed Services Agreement in place with Air Temp during the reporting period.

Air Temp is engaged in the business of the maintenance, repair, installation and sale of residential and commercial heating and cooling systems and other products and related services and SES is engaged in the business of the maintenance, repair, installation and sale of solar heating systems and related services.

Prior to the closing of this acquisition, both Air Temp and SES were customers in the Company’s managed solutions reporting segment.

Share reset issuances

In connection with five conversion agreements entered into during September 2024 (see Note 11, Note 14, Note 18 and Note 19), the Company provided vendors and lenders with a one-time share reset adjustment (the “Share Reset”) such that the vendors and lenders would receive additional shares equal to the difference between the number of shares of the Company’s common stock that would be issued at the reset price on the reset date less the number of Conversion Shares.

Three of these conversion agreements were with related parties (see Note 18).

On March 31, 2025, 2,737,168 shares were issued in accordance with the terms of the Share Reset on five of the related conversion agreements extinguishing the Company’s obligations under those agreements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Settlement Agreement pursuant to Section 3(a)(10)

On January 28, 2025, the Company entered into a settlement and stipulation agreement (the “Settlement Agreement”) with Last Horizon, LLC (“Last Horizon”), pursuant to which the Company agreed to issue shares of the Company’s common stock to Last Horizon in exchange for the settlement of an aggregate $ 8,908,000 (the “Claim”) to resolve outstanding overdue liabilities with a lender and certain of its vendors.

On January 29, 2025, a Federal court in Florida entered an order (the “Order”) approving, among other thing, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act in accordance with a stipulation of settlement, pursuant to the Agreement between the Company and Last Horizon.

Last Horizon commenced action against the Company to recover the Claim, which Last Horizon had purchased from certain vendors of the Company pursuant to the terms of separate purchase agreements between Last Horizon and the lender and each of such vendors.

The Order provides for the full and final settlement of the Claim and the related action.

The Settlement Agreement became effective and binding upon execution of the Order by the Court on January 29, 2025.

Pursuant to the terms of the Settlement Agreement approved by the Order, the Company agreed to issue to Last Horizon shares (the “Settlement Shares”) of the Company’s common stock.

The Settlement Agreement provides that the Settlement Shares will be issued in one or more tranches, as necessary, sufficient to satisfy the Claim through the issuance of securities issued pursuant to Section 3(a)(10) of the Securities Act.

Pursuant to the Agreement, Last Horizon may deliver requests to the Company for additional shares of common stock to be issued to Last Horizon until the Claim is paid in full, provided that any excess shares issued to Last Horizon will be cancelled

The issuance of Common Stock to Last Horizon pursuant to the terms of the Agreement approved by the Order is exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear.

The Agreement provides that in no event will the number of shares of Common Stock issued to Last Horizon or its designee in connection with the Agreement, when aggregated with all other shares of Common Stock then beneficially owned by Last Horizon and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by Last Horizon and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 4.9 % of the Common Stock.

The Company issued 13,744,131 shares of the Company’s common stock with a fair value of approximately $ 8,709,000 , as determined by the closing price on the date the shares were issued, to partially settle the obligation to Last Horizon between January 29, 2025 and the date these consolidated financial statements were issued.

Convertible note agreement issuances

The Company entered into twelve convertible note agreements in exchange for aggregate gross proceeds of $ 2,530,000 to eleven lenders during the three months ended March 31, 2025 (the “Q1 2025 Convertible Notes”).

The Q1 2025 Convertible Notes bear interest at a rate of 20.0 % per annum.

The Q1 2025 Convertible Notes have maturity dates that range from 40 -days to one year from the convertible note issuance date, optional conversion period that ranges from thirty to ninety days , and a conversion price that ranges from $ 1.00 to $ 1.15 .

The Company entered into convertible note agreements with two related-party investors holding beneficial ownership interests exceeding 5.0% of the Company's common stock.

The aggregate principal amount of these convertible notes was $ 500,000 .

The Company entered into six convertible note agreements in exchange for aggregate gross proceeds of $ 1,026,000 to six lenders during April 2025, May 2025, and June 2025 (the “Q2 2025 Convertible Notes”).

The Q2 2025 Convertible Notes bear interest at a rate of 20.0 % per annum.

Five of the Q2 2025 Convertible Notes have maturity dates that range from 40-days to one year, optional conversion periods that range from thirty to 180 days , and conversion prices that either range from $ 0.60 to $ 1.15 or is convertible at a conversion price equal to the quotient obtained by dividing (x) the sum of the principal and accrued by unpaid interest by (y) 90.0 % of the VWAP on the primary trading market of the Company’s common stock the three trading day period immediately preceding the measurement date.

One of the Q2 Convertible Notes bears interest at a rate of 20.0 % per annum, matures 210 days from the agreement date, and is convertible any time before the maturity date at the option of the holder into shares of the Company’s common stock at a conversion price equal to the lower of (i) $ 0.25 or (ii) the quotient obtained by dividing (x) the sum of the principal and accrued by unpaid interest by (y) 90.0 % of the VWAP on the primary trading market of the Company’s common stock the three trading day period immediately preceding the measurement date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During July 2025, the Company entered into a convertible note agreement in exchange for aggregate gross proceeds of $ 500,000 to a lender (the “Q3 2025 Convertible Note”).

The Q3 2025 Convertible Note bears interest at a rate of 20.0 % per annum and matures 210 days from the agreement date.

The Q3 2025 Convertible Note is convertible any time before the maturity date at the option of the holder into shares of the Company’s common stock at a conversion price equal to the lower of (i) $ 0.25 or (ii) the quotient obtained by dividing (x) the sum of the principal and accrued by unpaid interest by (y) 90.0 % of the VWAP on the primary trading market of the Company’s common stock the three trading day period immediately preceding the measurement date..

The number of shares issuable upon conversion is determined by dividing the sum of the outstanding principal and accrued interest by the conversion price.

Promissory note agreement issuances

The Company entered into six promissory note agreements in exchange for aggregate gross proceeds of $ 735,000 during April 2025 and May 2025.

Each of the notes bears interest at a rate of 20.0 % per annum and matures 180 days from its respective issuance date.

Five of the promissory notes were held by W4 Partners LLC, a related party due to its equity ownership in the Company.

Designation of Convertible Preferred Stock Classes

On May 5, 2025, the Company’s board of directors designated 100,000 shares of preferred stock as Series A Convertible Preferred Stock, par value $ 0.0001 per share (the “Series A Stock”) and 100,000 shares of preferred stock as Series B Convertible Preferred Stock, par value $ 0.0001 per share (the “Series B Stock”).

The Series A Stock and the Series B Stock have an initial stated value of $ 100.00 per share, subject to adjustment in the event of a stock split, combination or other similar recapitalization.

The Series A Stock and the Series B Stock do not have voting rights.

The Series A Stock and the Series B Stock will accrue dividends at the rate of 12.0 % and 18.0 %, respectively, per annum of the stated value on a quarterly basis per calendar quarter and will be due and payable within five business days of the end of each such calendar quarter, with payment subject to the board of directors approval.

The Series A Stock and the Series B Stock are not entitled to receive any dividends or distributions paid on the common stock or any other class of preferred stock.

The Series A Stock and the Series B Stock is convertible into shares of common stock, par value $ 0.0001 per share at the option of the holder at a number of conversion shares equal to (a) the stated value plus then accrued but unpaid dividends (the “Liquidation Amount”) divided by (b) 90.0 % and 95.0 %, respectively, of the VWAP as of the date of the notice of conversion.

The Company will reserve from its authorized and unissued common stock a number of shares of common stock equal to at least 150.0 % of the number of conversion shares then issuable on conversion of all shares of the Series A Stock and Series B Stock, assuming a VWAP determined on the first business day of each calendar month.

In no event shall any holder of Series A Stock or Series B Stock be entitled to elect to complete any conversion to the extent that the number of conversion shares, to be issued to such holder exceed the sum of (1) the number of shares of common stock beneficially owned by such holder and its affiliates, except as permitted by the terms of the preferred stock, and (2) the number of shares of common stock issuable upon the conversion of the portion of the Series A Stock or Series B Stock with respect to which the determination of this provision is being made, would result in beneficial ownership by such holder and its affiliates of more than 9.99 % of the outstanding shares of common stock, unless the holder elects to increase or waive the limitation.

The Series A Stock and the Series B Stock are entitled to receive distributions prior to payment to holders of common stock an amount per share equal to the Preferred Liquidation Amount, which ranks pari passu with and payable to the same extent of any other class of Preferred Stock currently designated or that may be designated in the future.

The Company may elect at any time, at the sole discretion of the board of directors to redeem all, but not less than all of the Series A Stock or the Series B Stock by paying an amount in cash equal to 115.0 % of the Liquidation Amount.

Forward Purchase Agreement termination

Exercise price

Risk-free interest rate

Dividend rate

Probability of completing the Business Combination

The Second FPA Amendment also provides a Maturity Settlement Scenario and a Prepayment Shortfall Scenario, with a revised definition for the Prepayment Shortfall Scenario (see Note 11).

Pursuant to the FPA Termination Agreement, the 1,618,948 shares of the Company's common stock that Meteora held as of the termination date of April 2, 2025 were

Pursuant to the FPA Termination

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

deemed free and clear of all obligations, the number of Recycled Shares was equal to zero , and the Prepayment Shortfall was deemed to be zero .

The Company received the termination consideration from Meteora in April 2025.

Reverse stock split

On April 11, 2025, the Company held a special meeting of shareholders.

The shareholders voted to approve a reverse stock split and issuance of up to 25,000,000 shares via a standby equity purchase agreement.

The terms of the reverse stock split are not yet finalized as of the date the consolidated financial statements were issued.

Nasdaq delisting

On May 6, 2025, the Company received a determination letter (the “Delisting Notification”) from the Nasdaq Hearings Advisor stating that the Panel has determined to delist the Company's common stock, par value $ 0.0001 per share from the Nasdaq Capital Market, and Nasdaq suspended the trading of the Company’s Common Stock on May 7, 2025 because the Company has not demonstrated compliance with the MVLS Rule, nor does it meet any of the alternative requirements under Nasdaq Listing Rule 5550 (b) and has failed to demonstrate that additional time to regain compliance is appropriate.

SEPA Convertible Note technical default

As of the date of this filing, the Company has not made certain scheduled payments under the SEPA Convertible Note or made timely SEC filings and is therefore in default under the agreement.

As of December 31, 2024, the minimum cash balance required was approximately $ 833,000 .

Acquisition of Cambridge Energy Resources

On May 15, 2025, the Company completed its acquisition of Cambridge Energy Resources Ltd.

(“CER”), a privately held India-based Energy-Management-as-a-Service provider, following receipt of all necessary regulatory approvals.

Under the terms of the transaction, ConnectM paid INR 120 million (approximately $ 1.4 million).

CER brings an established operating presence in India’s rooftop solar and telecommunication energy-management sectors, complementing the Company’s Owned Service Network segment and Energy Intelligence Network.

Management expects the integration of CER to accelerate strategic growth across distributed energy and telecom infrastructure markets in India.

With the acquisition, the Company projects India-based operations to expand from approximately 5 % to 15 % of global revenue (approximately $ 10 million annualized) over the next twelve months.

This acquisition further strengthens ConnectM’s international expansion strategy and aligns with government initiatives in India to reach 500 GW of non-fossil fuel energy capacity by 2030, bolstered by significant investment in renewable energy and 5G deployment.

Agreement, the 1,618,948 shares of the Company’s common stock that Meteora held as of the termination date of April 2, 2025 were deemed free and clear of all obligations, the number of Recycled Shares was equal to zero , and the Prepayment Shortfall was deemed to be zero .

The Company received termination consideration of $ 500,000 from Meteora in April 2025.

3(a)(10) Settlement Agreement

On January 28, 2025, the Comp

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

What changed 10-K

Item 9A. Controls and Procedures