What changed in this filing

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Item 1. Financial Statements

2026-06-22 compared with 2025-11-19 · 93 added, 148 removed, 512 unchanged (32% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Current Assets

Cash and cash equivalents

Cash and cash equivalents under discontinued operations

Accounts receivable, net

Prepaid expense and other receivable

Current assets under discontinued operations

Total Current Assets

Property and equipment, net of accumulated

Intangible assets, net of accumulated amortization

Deferred expenses

6 unchanged sentences

Due to related party

Current liabilities under discontinued operations

Total Current Liabilities

5 unchanged sentences

5,000,000 shares authorized;

$ 0.001 par value 5,000,000 issued and outstanding at September 30, 2025

and December 31, 2024

$ 0.001 par value

5,000,000 issued and outstanding at March 31, 2026, and December 31, 2025

Series A-1 Preferred stock:

5,000,000 shares authorized;

$0.001 par value 5,000,000 issued and outstanding at March 31, 2026, and December 31, 2025

Common stock:

2,000,000,000 shares authorized;

$ 0.001 par value 74,640,766 shares issued and outstanding at September 30, 2025

and December 31, 2024

$ 0.001 par value

74,640,766 shares issued and outstanding at March 31, 2026, and December 31, 2025

Common stock:

2,000,000,000 shares authorized;

$0.001 par value 74,640,766 shares issued and outstanding at March 31, 2026, and December 31, 2025

Additional Paid-in Capital

12 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

4 unchanged sentences

Total Operating Expenses

Operating income (loss) from continuing operations

Operating loss from continuing operations

Other Income and Expense

Interest income

Other expense

Total other income (expense)

Total other income

Net (loss) income before taxes

Provision for income taxes

Income (loss) from continuing operations

(Loss) income from continuing operations

Discontinued operations

Loss from discontinued operation

Loss on deconsolidation of the discontinued operations

Loss from discontinued operations, net of tax benefits

Net Income (loss)

$ ( 119,747 )

Net income (loss) attributable to non-controlling interests

Net income (loss) attributable to Hong Yuan Holding Group

Other comprehensive income (loss)

Comprehensive Income (Loss)

$ ( 118,964 )

Net (loss) income before non-controlling interests

Net loss attributable to non-controlling interests

Net (loss) income attributable to Hong Yuan Holding Group

Other comprehensive income

Comprehensive (Loss) Income

Basic and dilutive net income (loss) per common share

3 unchanged sentences

Statements of Stockholders’ Deficit

Comprehensive

Income (Loss)

controlling Interests

Stockholders’

Preferred Stock

Comprehensive

Income (Loss)

controlling Interests

Stockholders’

- December 31, 2023

$ ( 97,685,122 )

$ ( 137,483 )

contribution received by VIE

other comprehensive income

- June 30, 2024

Balance - December 31, 2024

$ ( 97,784,280 )

$ ( 168,802 )

contribution received by VIE

other comprehensive income

–September 30, 2024

Accumulated other comprehensive income

Balance - March 31, 2025

$ ( 97,746,780 )

$ ( 130,826 )

Preferred Stock

Comprehensive

1 unchanged sentence

Stockholders’

- December 31, 2024

$ ( 97,784,280 )

$ ( 168,802 )

Deconsolidation

of the discontinued operations

other comprehensive income

- June 30, 2025

$ ( 97,716,425 )

other comprehensive income

– September 30, 2025

Balance - December 31, 2025

$ ( 97,652,645 )

Net income (loss)

Accumulated other comprehensive income

Balance - March 31, 2026

$ ( 97,745,991 )

2 unchanged sentences

Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Net Income (loss)

$ ( 119,747 )

Net (loss) from discontinued operations

9 unchanged sentences

Due to related party

Net Cash Provided by Operating Activities from Continuing Operations

Net Cash (Used in) Operating Activities from Continuing Operations

Net Cash (Used in) Operating Activities from Discontinued Operations

1 unchanged sentence

CASH FLOWS FROM INVESTING ACTIVITIES

Deferred renovation expenses

Intangible assets

Net Cash (Used in) Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from capital contribution

Net Cash Provided by Financing Activities

EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS

4 unchanged sentences

Cash paid for income taxes

Cash paid for interest

NON-CASH INVESTING AND FINANCING ACTIVITIES

136 unchanged sentences

of estimated useful lives of property and equipment

Machinery & equipment

Office equipment

Topic 842, “Leases” requires recognition of leases on the balance sheets as right-of-use (“ROU”) assets

22 unchanged sentences

The Company’s diluted income and loss per share is the same as the basic income

and loss per share for the nine months ended September 30, 2025 and 2024, as there are no potential shares outstanding that would have

a dilutive effect.

and loss per share for the three months ended March 31, 2026 and 2025, as there are no potential shares outstanding that would have a

dilutive effect.

tax expense is based on pretax financial accounting income.

4 unchanged sentences

The Company recorded a valuation allowance against

its deferred tax assets as of September 30, 2025 and December 31, 2024.

its deferred tax assets as of March 31, 2026 and December 31, 2025.

Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.

21 unchanged sentences

of property and equipment

September 30,

Office Equipment

1 unchanged sentence

Property and equipment, net

5 – Intangible assets

assets consist of:

of intangible assets

Accumulated amortization

Intangible assets, net

April 10, 2024, Fengcuiyuan entered into an operating lease agreement to rent an office.

5 unchanged sentences

and related liability were reduced by $ 46,840 .

December 18, 2025, Rongcheng entered into an operating lease agreement to rent a storefront.

The lease has an original term of 3 years

expiring December 17, 2028.

sheet information related to the Company’s leases is presented below:

of balance sheet information related to company’s leases

September 30, 2025

March 31, 2026

Operating Leases

5 unchanged sentences

of company’s lease expenses

Nine Months Ended September 30,

Three Months Ended March 31,

Operating lease expense

1 unchanged sentence

of other information related to leases

Nine Months Ended

September 30, 2025

Three Months Ended

March 31, 2026

Cash Paid For Amounts Included In Measurement of Liabilities:

14 unchanged sentences

7 – Related party transaction

the nine months ended September 30, 2025, the Company’s current majority shareholder advanced $ 65,435 to the Company as working

As of September 30, 2025 and December 31, 2024, the Company owed its current majority shareholder of $ 317,322 and $ 251,887 ,

respectively, including $ 64,103 for acquisition of Hongyuan HK.

the three months ended March 31, 2026, the Company’s current majority shareholder advanced $ 14,127 to the Company as working capital.

As of March 31, 2026 and December 31, 2025, the Company owed its current majority shareholder of $ 352,258 and $ 338,131 , respectively,

including $ 64,103 for acquisition of Hongyuan HK.

The advances are non-interest bearing and are due on demand.

8 – Common stock

September 30, 2025, the Company is authorized to issue 2,000,000,000 shares of $ 0.001 par value common stock.

of September 30, 2025, a total of 74,640,766 shares of common stock with par value $ 0.001 remain outstanding.

March 31, 2026, the Company is authorized to issue 2,000,000,000 shares of $ 0.001 par value common stock.

of March 31, 2026, a total of 74,640,766 shares of common stock with par value $ 0.001 remain outstanding.

9 – Preferred stock

of September 30, 2025, a total of 5,000,000 shares of Series A-1 preferred stock with par value $ 0.001 remain outstanding.

of March 31, 2026, a total of 5,000,000 shares of Series A-1 preferred stock with par value $ 0.001 remain outstanding.

10 – Income taxes

4 unchanged sentences

Temporary differences result primarily from the recording of tax benefits of net operating loss carry forwards.

of September 30, 2025, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated

of March 31, 2026, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated

with the deferred tax asset.

3 unchanged sentences

expenses in the statements of operations.

For the nine months ended September 30, 2025 and 2024, the Company had no unrecognized tax

benefits and related interest and penalties expenses.

For the three months ended March 31, 2026 and 2025, the Company had no unrecognized tax benefits

and related interest and penalties expenses.

Currently, the Company is not subject to examination by major tax jurisdictions.

10 – Discontinued operations

April 2025, the Company changed its business model.

Rongcheng relinquished its 55 % ownership in Xuchang and received its original investment

back, but will still fund the opening of stores operated by Xuchang.

In the future, the investment funds for stores will be recovered

as loans from the stores’ profits.

As a result, Xuchang was deconsolidated from the Company’s consolidated financial statements

starting in the second quarter of 2025 and Xuchang’s operating results prior to the deconsolidation was accounted for as discontinued

The Company recorded a loss on deconsolidation of the discontinued operations of $ 2,788 in the second quarter of 2025.

Company has reclassified its previously issued financial statements to segregate the discontinued operations as of the earliest period

11 – Subsequent event

68 unchanged sentences

Our independent accountants have expressed a “going concern”

As of September 30, 2025, we had an accumulated deficit of $97,667,803 and a net working capital deficit of $65,836.

As of March 31, 2026, we had an accumulated deficit of $97,745,991 and a net working capital deficit of $100,288.

our current burn rate is nominal, it is expected that our costs of operations will continue to exceed revenues, primarily due to the

41 unchanged sentences

in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required.

The Company has no allowance for doubtful accounts as of September 30, 2025 and December 31, 2024, respectively.

The Company has no allowance for doubtful accounts as of March 31, 2026 and December 31, 2025, respectively.

Company follows the asset and liability method of accounting for future income taxes.

6 unchanged sentences

The Company’s effective tax rate approximates the Federal statutory rates.

of Operations for the Three Months Ended September 30, 2025 compared to the Three Months Ended September 30, 2024

was $258,329 in the three months ended September 30, 2025 compared to $85 in the same period last year.

The increase in revenue was mainly

because the Chinese VIEs started generating revenue in the second quarter of 2024 and have been ramping up the operations to generate

more revenues.

of goods sold was $80,318 in the three months ended September 30, 2025 compared to $30 in the same period last year due to the increase

expenses were $122,241 in the three months ended September 30, 2025 compared to $50,340 in the same period last year, an increase of

$71,901 or 142.8%.

The increase was mainly due to the increase in professional fees, general and administrative expenses and selling

and marketing expenses.

The increase in general and administrative expenses in the third quarter of 2025 was mainly due to the increase

in personnel expense, and license and regulatory fee related to maintaining the public company, partly offset by the decrease in rent,

travel, and office expense.

the three months ended September 30, 2025, the Company had a net income of $50,778, compared to a net loss of $50,282 during the same

period last year, an increase of $101,060.

The increase in net income in the third quarter of 2025 was primarily due to the increase

in gross profit as a result of the Chinese VIEs ramping up the operations to generate more revenues, partly offset by higher operating

of Operations for the Nine Months Ended September 30, 2025 compared to the Nine Months Ended September 30, 2024

was $612,206 in the nine months ended September 30, 2025 compared to $15,290 in the same period last year.

The increase in revenue was

mainly because the Chinese VIEs started generating revenue in the second quarter of 2024 and have been ramping up the operations to generate

more revenues.

of goods sold was $221,917 in the nine months ended September 30, 2025 compared to $6,179 in the same period last year due to the increase

expenses were $256,498 in the nine months ended September 30, 2025 compared to $129,023 in the same period last year, an increase of

$127,475 or 98.8%.

The increase was mainly due to the increase in general and administrative expenses, selling and marketing expenses,

and professional fees.

The increase in general and administrative expenses in the nine months ended September 30, 2025 was mainly due

to the increase in personnel expense, and license and regulatory fee related to maintaining the public company, partly offset by the

decrease in travel and rent expense.

the nine months ended September 30, 2025, the Company had a net income of $117,813, compared to a net loss of $119,747 during the same

period last year, an increase of $237,560.

The increase in net income in the nine months ended September 30, 2025 was primarily due to

the increase in gross profit as a result of the Chinese VIEs ramping up the operations to generate more revenues, partly offset by higher

operating expenses and the loss from discontinued operations.

of Operations for the Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025

was $43,697 in the three months ended March 31, 2026 compared to $184,492 in the same period last year.

The decrease in revenue was mainly

because the decline in Chinese VIEs revenue.

of goods sold was $21,712 in the three months ended March 31, 2026 compared to $71,780 in the same period last year due to the decrease

expenses were $116,552 in the three months ended March 31, 2026 compared to $69,582 in the same period last year, an increase of $46,970

The increase was mainly due to the increase in professional fees, general and administrative expenses and selling and marketing

The increase in general and administrative expenses in the first quarter of 2026 was mainly due to the increase in personnel

expense, and license and regulatory fee related to maintaining the public company, partly offset by the decrease in rent, and office

the three months ended March 31, 2026, the Company had a net loss of $94,567, compared to a net income of $43,130 in the same period

last year, a decrease of $137,697.

The decrease in net income in the first quarter of 2026 was primarily due to the decrease in gross

profit as a result of the decline in Chinese VIEs revenue and higher operating expenses.

and Capital Resources

of September 30, 2025 and December 31, 2024, we had a cash balance of $12,610 and $38,527 respectively.

During the nine months ended

September 30, 2025 and 2024, the company’s operations are primarily funded by the Company’s CEO and major shareholder and

the minority owners of the Chinese VIEs.

of March 31, 2026 and December 31, 2025, we had a cash balance of $6,444 and $16,747 respectively.

During the three months ended March

31, 2026 and 2025, the company’s operations are primarily funded by the Company’s CEO and major shareholder and the minority

owners of the Chinese VIEs.

the extent that the Company’s capital resources are insufficient to meet current or planned operating requirements, the Company

22 unchanged sentences

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

the nine months ended September 30, 2025, net cash used in operating activities was $28,822.

This was primarily due to the net income

of $123,626, adjusted by non-cash related expenses of $696 which consisted primarily of depreciation and amortization expenses, and then

decreased by unfavorable changes in working capital of $145,295.

The unfavorable changes in working capital mainly resulted from an increase

in accounts receivable of $216,590, and an increase in prepaid expense and other receivable of $91,102, partly offset by an increase

in deferred revenue of $60,657, an increase in accounts payable and accrued liabilities of $29,819, and an increase in due to related

party of $65,435.

the nine months ended September 30, 2024, net cash used in operating activities was $95,411.

the three months ended March 31, 2026, net cash used in operating activities was $3,420.

This was primarily due to the net loss of $94,471,

$119,747, adjusted by non-cash related expenses including depreciation of $1,017, and then increased by favorable changes in working

capital of $23,319.

The favorable changes in working capital mainly resulted from an increase in due to related party of $31,218, and

an increase in accounts payable and accrued liabilities of $10,897, offset by an increase in inventory of $2,397, and an increase in

prepaid expense and other receivable of $16,395.

the nine months ended September 30, 2025, net cash used in investing activities was payment for deferred renovation of $5,540.

neither generated nor used cash in investing activities during the nine months ended September 30, 2024.

neither generated nor used cash in financing activities during the nine months ended September 30, 2025.

the nine months ended September 30, 2024, net cash provided by financing activities were proceeds from capital contribution received

by Chinese VIEs of $108,368.

adjusted by non-cash related expenses of $2,088 which consisted primarily of depreciation and amortization expenses, and then decreased

by favorable changes in working capital of $88,963.

The favorable changes in working capital mainly resulted from an increase in accounts

payable and accrued liabilities of $ 89,925, an increase in due to related party of $14,127, a decrease in accounts receivable of $21,021,

and an decrease in inventory of $6,771, partly offset by a decrease in deferred revenue of $34,746, and a decrease in tax payable of

the three months ended March 31, 2025, net cash used in operating activities was $13,234.

This was primarily due to the net income of

$37,357, adjusted by non-cash related expenses including depreciation of $335, and then decreased by unfavorable changes in working capital

The unfavorable changes in working capital mainly resulted from an increase in accounts receivable of $36,483, an increase

in inventory of $17,690, and an increase in prepaid expense and other receivable of $37,912, offset by an increase in accounts payable

and accrued liabilities of $40,720, and an increase in due to related party of $2,461.

the three months ended March 31, 2026, net cash used in investing activities was developing spending of $7,079 on software.

neither generated nor used cash in investing activities during the three months ended March 31, 2025.

neither generated nor used cash in financing activities during the three months ended March 31, 2026 and 2025.

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

As shown in the accompanying

financial statements, we had a net income of $117,813 for the nine months ended September 30, 2025 and incurred a net loss of $119,747

for the nine months ended September 30, 2024, and had a working capital deficit of $65,836 as of September 30, 2025, in addition to a

stockholders’ deficit of $46,139 which raise substantial doubt about the Company’s ability to continue as a going concern.

financial statements, we had a net loss of $94,471 for the three months ended March 31, 2026 and a net income of $37,357 for the three

months ended March 31, 2025, and had a working capital deficit of $100,288 as of March 31, 2026, which raise substantial doubt about

the Company’s ability to continue as a going concern.

believes the Company may continue to incur losses and negative cash flows from operating activities for the foreseeable future and will

22 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements