What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-13 · 61 added, 155 removed, 188 unchanged (53% of the section changed)

8 unchanged sentences

Unlike traditional classes, we give students the unique opportunity to explore their interest in-depth via interactive, live streaming courses with flexible time slots.

Although we have incurred continuing losses from operations and net losses in the past few years, our business has experienced continuous growth in sales.

Our total revenue increased by $308,704, or 32% from $978,934 for the three months ended September 30, 2024, to $1,287,638 for the three months ended September 30, 2025.

Our gross profit increased by $355,971, from $543,053 for the three months ended September 30, 2024, to $899,024 for the three months ended September 30, 2025.

Gross profit margin increased from 55% for the three months ended September 30, 2024 to 70% for the three months ended September 30, 2025.

Our total revenue increased by $24,472, or 1% from $ 2,804,830 for the nine months ended September 30, 2024, to $2,829,302 for the nine months ended September 30, 2025.

Our gross profit increased by $79,447, from $1,547,661 for the nine months ended September 30, 2024, to $1,627,108 for the nine months ended September 30, 2025.

Gross profit margin increased from 55% for the nine months ended September 30, 2024 to 58% for the nice months ended September 30, 2025, as a result of increased revenue during 2025.

We completed a merger with Battery Future Acquisition Corp.

on April 4, 2025 and became a Nasdaq listed public company.

Our total revenue decreased by $296,818, or 36%, from $816,016 for the three months ended March 31, 2025, to $519,198 for the three months ended March 31, 2026.

Our gross profit decreased by $144,468, from $405,366 for the three months ended March 31, 2025, to $260,898 for the three months ended March 31, 2026.

Our gross profit margin remained unchanged at 50% for the three months ended March 31, 2026 as compared to same period in 2025.

Business Model

1 unchanged sentence

Our platform offers a wide breadth of affordable enrichment programs including language, science, technology, engineering, arts, mathematics, music, and many more.

Since our platform handles enrollments, record keeping, and many other tasks that usually take up educators’ time, our educator can focus on sharing knowledge about topics they love with our students.

We analyze data gathered on our platform to better determine our students’ most relevant needs, helping us match them with relevant courses and learning paths, thereby driving higher satisfaction.

Once a learner enrolls in a course, we strive to provide an effective learning experience through tutoring, assessments, Q&As, and interactive exercises.

Since our platform handles enrollments, record keeping, and many other administrative tasks that usually take up educators’ time, our educator can focus on sharing knowledge about topics they love with our students.

We analyze data gathered on our platform to better determine our students’ most relevant education needs, helping us match them with relevant courses and learning paths, thereby driving higher customer satisfaction.

Once a learner enrolls in a course, we strive to provide an effective learning experience through tutoring, assessments, Q&As, and interactive sessions.

We provide time-based subscriptions and credit-based subscriptions to our online courses.

5 unchanged sentences

Our business model is dependent upon our ability to grow and maintain a large user base, and it also requires that we grow and keep registered users and paid subscribers.

As of September 30, 2025 and December 31, 2024, we have 71,556 and 61,387 registered users, respectively.

As of March 31, 2026 and 2025, we have 73,881 and 65,614 registered users, respectively.

"Registered users" are individuals who have signed up and created an account on our platform.

16 unchanged sentences

To be the platform of choice for educator partners, we continue to invest in increasing the size and engagement of our user base, improving recommendation and personalization features, and developing marketing capabilities that drive higher conversions.

As of September 30, 2025 and December 31, 2024, we have 1,144 and 936 educator partners working with us, respectively.

As of March 31, 2026 and 2025, we have 1,229 and 977 educator partners working with us, respectively.

Operating Efficiency

5 unchanged sentences

Key Components of Results of Operations

We have two predominant sources of revenue:

(i) time-based subscriptions and (ii) credit-based subscriptions to our online courses.

We have three predominant sources of revenue:

(i) time-based subscriptions, (ii) credit-based subscriptions to our online courses, and (iii) marketing consulting services.

Customers are required to pay in advance to enroll for courses.

In 2023, we started generating consulting revenue by providing marketing consulting services to a related party.

Cost of revenues

7 unchanged sentences

Results of Operations

For the three months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the years presented.

The results below are not necessarily indicative of results to be expected for future periods.

For the Three Months Ended September 30,

Variance Amount

For the Three Months Ended

Service revenues

Consulting revenues (related party)

Total revenues

12 unchanged sentences

Change in fair value of convertible debt

Financing cost

Staking rewards

3 unchanged sentences

Provision for income taxes

Net income (loss)

The summary information by revenue stream are as follows:

For the Three Months Ended September 30,

Variance Amount

Service revenues

Consulting revenues (related party)

Total revenues

Our total revenue increased by $308,704, or 32% from $978,934 for the three months ended September 30, 2024, to $1,287,638 for the three months ended September 30, 2025.

The increase in the revenue in the third quarter of 2025 as compared to the third quarter of 2024 was primarily attributable to the increase in service revenues.

Service revenues increased by $408,704, or 46%, from $878,934 for the three months ended September 30, 2024, to $1,287,638 for the three months ended September 30, 2025, driven by a decrease in credit-based subscriptions and number of courses delivered during the second quarter of 2025.

In the fourth quarter of 2023, we added a new revenue stream by providing marketing consulting services to Genius Kid Class LLC, one of our related parties.

Consulting revenue generated in the third quarter of 2024 was $100,000.

We completed our consulting service obligation by the end of 2024.

We are uncertain about future growth of consulting revenue as we have not secured any new consulting contracts yet as of September 30, 2025.

As a result, no consulting revenue was generated in the third quarter of 2025.

Costs of Revenue

For the Three Months Ended September 30,

Variance Amount

Payment Processing Fee

Streaming Services

Cost of revenues decreased by $47,266, or 11%, from $435,881 for the three months ended September 30, 2024, to $388,615 for the three months ended September 30, 2025.

Compensation decreased by $32,164, or 8%, from $392,294 for the three months September 30, 2024, to $360,131 for the three months ended September 30, 2025.

Payment processing fee decreased by $8,203, or 43%, from $19,286 for the three months September 30, 2024, to $11,084 for the three months ended September 30, 2025.

The cost of streaming service decreased by $6,900, or 28%, from $24,300 for the three months September 30, 2024, to $17,400 for the three months ended September 30, 2025.

The decrease in compensation, payment processing and streaming service expenses was due to decreased class sessions provided during the third quarter of 2025.

Gross profit margin

Our gross profit and gross profit margin from the two revenue streams are summarized as follows:

For the Three Months Ended September 30,

Service revenues

Consulting revenues (related party)

The total gross profit margin increased from 55% for the three months ended September 30, 2024 to 70% for the three months ended September 30, 2025, as a result of increased revenue during the third quarter of 2025.

Our gross margin of service revenue increased from 54% for the three months ended September 30, 2024 to 70% for the three months ended September 30, 2025, mainly due to higher revenue in 2025.

Operating expenses

During the three months ended September 30, 2025, we incurred total operating expenses of $1,503,917, an increase of $787,160, or 110%, as compared to a total of $716,757 during the three months ended September 30, 2024.

General and administrative expenses increased by $802,308, or 147% from $546,389 for the three months ended September 30, 2024, to $1,348,697 for the three months ended September 30, 2025.

Our general and administrative expenses include compensation related to the administrative personnel, amortization and depreciation expenses, rent, and other general expenses.

Other general expenses increased by $140,068 from $64,597 for the three months ended September 30, 2024, to $204,665 for the three months ended September 30, 2025.

The increase was primarily attributable to higher consulting fees, regulatory registration expenses, and insurance as we completed a merger with Battery Future Acquisition Corp.

(“BFAC”) in this quarter.

Employee compensation expenses increased by $336,278 from $371,246 for the three months ended September 30, 2024, to $707,524 for the three months ended September 30, 2025.

The increase is primarily driven by additional hiring during the second quarter of 2025 to support our growth.

In addition, there was an upward adjustment to executive compensation, further contributing to the overall compensation growth.

Employee stock compensation was $174,343 for the three months ended September 30, 2025.

There was no employee stock compensation in 2024.

Interest and other expenses for the three months ended September 30, 2025, were $3,789,479 as compared to $2,916 for the three months ended September 30, 2024.

The increase was primarily attributable to the financing cost and change in fair value of warrants, convertible notes, and crypto assets.

Provision for income taxes

Provision for income taxes for the three months ended September 30, 2025 was $663,597.

We had no income tax provision for the three months ended September 30, 2024 as we made fully allowance on the deferred tax assets as we have determined that it is not more likely than not that the assets will be realized.

As a result of the combination of factors discussed above, our net income (loss) increased from $176,620 for the three months ended September 30, 2024 to $2,520,989 for the three months ended September 30, 2025.

For the nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the years presented.

The results below are not necessarily indicative of results to be expected for future periods.

For the Nine Months Ended September 30,

Variance Amount

Service revenues

Consulting revenues (related party)

Total revenues

Cost of revenues

Total cost of revenues

Selling and marketing

General and administrative

Research and development

Total operating expenses

(Loss) from operations

Change in fair value of warrants

Change in fair value of crypto assets

Change in fair value of convertible debt

Financing cost

Staking rewards

Interest and other expense

Total other income (expense)

(Loss) before provision for income taxes

Provision for income taxes

$ (4,187,534 )

1 unchanged sentence

The summary information by revenue stream are as follows:

For the Nine Months Ended September 30,

Variance Amount

For the Three Months Ended

Service revenues

Consulting revenues (related party)

Total revenues

Our total revenue increased by $24,472, or 1% from $2,804,830 for the nine months ended September 30, 2024, to $2,829,302 for the nine months ended September 30, 2025.

The increase in the revenue was primarily attributable to the increase in service revenues, partially offset by absence of consulting revenue.

In the fourth quarter of 2023, we added a new revenue stream by providing marketing consulting services to Genius Kid Class LLC, one of our related parties.

Consulting revenue generated in the third quarter of 2024 was $100,000.

Consulting services were provided over the past nine months.

We completed our consulting service obligation by the end of 2024.

We are uncertain about future growth of consulting revenue as we have not secured any new consulting contracts yet as of September 30, 2025.

As a result, no consulting revenue was generated in 2025.

Service revenues increased by $324,472, or 13%, from $2,504,830 for the nine months ended September 30, 2024, to $2,829,302 for the nine months ended September 30, 2025, which is primarily attributable to an increase in credit-based subscriptions and number of courses delivered in 2025.

Our total revenue decreased by $296,818, or 36% from $816,016 for the three months ended March 31, 2025, to $519,198 for the three months ended March 31, 2026.

The decrease was primarily attributable to reduced customer traffic and lower user engagement on the Company’s platform during the quarter, which resulted in decreased demand for both credit-based course purchases and pass subscription products.

During this period, management devoted greater operational focus and resources to public company compliance, treasury management, and strategic initiatives, including AI-related projects and the Company's broader AI-driven strategic transformation.

Management believes these efforts may support the Company's long-term growth and the continued development of its AI-powered education initiatives.

Costs of Revenue

For the Nine Months Ended September 30,

Variance Amount

For the Three Months Ended

Payment Processing Fee

Streaming Services

Cost of revenues decreased by $54,974, or 4%, from $1,257,169 for the nine months ended September 30, 2024, to $1,202,194 for the nine months ended September 30, 2025.

Payment processing fee decreased by $17,149, or 29%, from $58,206 for the nine months September 30, 2024, to $41,058 for the nine months ended September 30, 2025.

The cost of streaming service decreased by $8,805, or 13%, from $66,555 for the nine months September 30, 2024, to $57,750 for the nine months ended September 30, 2025.

The decrease in payment processing and streaming service expenses were due to decreased class sessions provided during the second quarter of 2025.

Cost of revenues decreased by $152,350, or 37%, from $410,650 for the three months ended March 31, 2025, to $258,300 for the three months ended March 31, 2026.

The decrease in cost of revenues was primarily attributable to lower customer activity and reduced sales volume during the quarter, and was generally consistent with the decrease in revenues.

Compensation expenses for independent educators and employees directly involved in providing services decreased by $131,088, or 35%, from $371,390 for the three months ended March 31, 2025, to $240,302 for the three months ended March 31, 2026.

Gross profit margin

Our gross profit and gross profit margin from the two revenue streams are summarized as follows:

For the Nine Months Ended September 30,

For the Three Months Ended

Service revenues

Consulting revenues (related party)

The total gross profit margin increased from 55% for the nine months ended September 30, 2024 to 58% for the nine months ended September 30, 2025, as a result of increased revenue during 2025.

Our gross margin of service revenue increased from 52% for the nine months ended September 30, 2024 to 58% for the nine months ended September 30, 2025, mainly due to higher service revenue.

The total gross profit margin increased remains at 50% for the three months ended March 31, 2026 and 2025.

Operating expenses

During the nine months ended September 30, 2025, we incurred total operating expenses of $4,226,941, an increase of $2,169,546, or 105%, as compared to a total of $2,057,395 during the nine months ended September 30, 2024.

General and administrative expenses increased by $2,205,896, or 137% from $1,605,515 for the nine months ended September 30, 2024, to $3,811,411 for the nine months ended September 30, 2025.

During the three months ended March 31, 2026, we incurred total operating expenses of $1,155,713, an increase of $454,440, or 65%, as compared to total operating expenses of $701,273 during the three months ended March 31, 2025.

General and administrative expenses increased significantly by $522,617, or 91%, from $573,539 for the three months ended March 31, 2025, to $1,096,156 for the three months ended March 31, 2026.

Our general and administrative expenses include compensation related to the administrative personnel, amortization and depreciation expenses, rent, and other general expenses.

Other general expenses increased by $1,126,812 from $267,744 for the nine months ended September 30, 2024, to $1,534,624 for the nine months ended September 30, 2025.

The increase was primarily attributable to higher professional consulting fees, regulatory registration expenses, insurance as we completed a merger with Battery Future Acquisition Corp.

Employee compensation expenses increased by $450,065 from $1,021,014 for the nine months ended September 30, 2024, to $1,471,079 for the nine months ended September 30, 2025.

The increase in general and administrative expenses in the three months ended March 31, 2026 as compared to same period last year was primarily attributable to an increase of $188,960 stock compensation to management, an increase of $146,441 on employee compensation, an increase of $103,510 on amortization expenses in relation to our IP assets, and an increase of $81,976 professional expenses in relation to our merger.

Specifically,

Our other general expenses increased by $81,976 from $171,328 for the three months ended March 31, 2025, to $253,305 for the three months ended March 31, 2026.

The increase was primarily attributable to higher regulatory registration expenses and professional accounting fees as we completed a merger with Battery Future Acquisition Corp.

(“BFAC”) and became a public listed company.

Employee compensation expenses increased by $146,441 from $294,900 for the three months ended March 31, 2025, to $441,341 for the three months ended March 31, 2026.

The increase is primarily driven by additional hiring during 2026 to support our growth.

In addition, there was an upward adjustment to executive compensation, further contributing to the overall compensation growth.

Employee stock compensation was $311,620 for the nine months ended September 30, 2025.

There was no employee stock compensation in 2024.

Interest and other expenses for the nine months ended September 30, 2025, were $1,659,403 as compared to $6,794 for the nine months ended September 30, 2024.

The increase was primarily attributable to the financing cost and change in fair value of warrants, convertible notes, and crypto assets.

In addition, employee stock compensation was $188,960 for the three months ended March 31, 2026.

There was no employee stock compensation for the three months ended March 31, 2025.

Amortization and depreciation expenses increased by $104,474 from $16,221 for the three months ended March 31, 2025, to $120,695 for the three months ended March 31, 2026.

The increase was primarily attributable to the amortization of the intangible assets.

Other expense

Other expense for the three months ended March 31, 2026, was $3,292,719 as compared to $1,300 for the three months ended March 31, 2025.

The spike on other expense was primarily attributable to a decrease of $2,444,670 in fair value of crypto assets and an increase of $860,631 in fair value of convertible debt.

Provision for income taxes

Provision for income taxes for the nine months ended September 30, 2025 was $701,957.

We had no income tax provision for the nine months ended September 30, 2024 as we made fully allowance on the deferred tax assets as we have determined that it is not more likely than not that the assets will be realized.

As a result of the combination of factors discussed above, our net loss increased from $516,528 for the nine months ended September 30, 2024 to $1,642,387 for the nine months ended September 30, 2025.

We had no income tax provision for the three months ended March 31, 2026 and 2025 as we made fully allowance on the deferred tax assets as we have determined that it is not more likely than not that the assets will be realized.

As a result of the combination of factors discussed above, our net loss increased to$4,187,534 for the three months ended March 31, 2026 from net loss of $297,207 for the three months ended March 31, 2025.

Liquidity and Capital Resources

As of September 30, 2025, we had cash and cash equivalents of $5,978,572.

As of March 31, 2026, we had cash and cash equivalents of $2,116,631.

Cash consists primarily of cash on hand and bank deposits.

1 unchanged sentence

The following table shows the breakout between cash on hand and bank deposits:

September 30,

March 31, 2026

December 31, 2025

Bank deposits

1 unchanged sentence

The accompanying consolidated financial statements have been prepared applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

As of September 30, 2025, the Company had cash of $3,428,824, current liabilities of $2,520,276, a working capital of $935,642 and a stockholders’ equity of $5,400,035.

For the three months ended September 30, 2025 and 2024, the Company had income (losses) of $2,520,989 and $176,620, respectively, and for the nine months ended September 30, 2025 and 2024, the Company had losses of $1,642,387 and $516,528, respectively.

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

As of March 31, 2026, the Company had cash of $2,116,631, a working capital deficit of $125,316 and a stockholders’ equity of $3,678,295.

In addition, for the three months ended March 31, 2026, the Company had net loss of $4,187,534, and net cash used in operating activities of $602,380.

These factors among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.

The Company completed business combination with Battery Future Acquisition Corp (the “BFAC”) on April 3, 2025 and received $1,075,936 from BFAC’s trust account.

Additionally, the Company received an aggregate of $4,700,000 from PIPE investors following the business combination, and entered into an equity purchase facility agreement (the “FPFA”) with Solana Strategic Holdings LLC (the “Solana”) for up to an aggregate of $400 million in newly issued shares of the Company’s Class B common stock.

Moreover, on May 30, 2025, the “Company entered into a Securities Purchase Agreement with an investor and the Company may sell to the investor up to an aggregate of $500 million in newly issued senior secured convertible notes (the “Notes”).

On September 6, 2025, the Company consummated the initial closing of $11 million of Notes.

Management of the Company has evaluated the mitigation plans and determined that the current working capital, cash position, FPFA, and Notes available for future issuance are sufficient to support its continuous operations and to meet its payment obligations when liabilities fall due within the next twelve months from the date of issuance of these combined and consolidated financial statements.

Additionally, on May 30, 2025, the Company entered into a Securities Purchase Agreement with an investor and the Company may sell to the investor up to an aggregate of $500 million in newly issued senior secured convertible notes (the “Notes”), of which 80% could be used for treasury purposes and 20% could be general working capital purposes .

On June 6, 2025, the Company consummated the initial closing of $11 million of Notes.

As of the date of this financial statement, the Company has up to $489 million in convertible notes available to issue.

Management of the Company has evaluated the mitigation plans and determined that the current working capital, cash position, and Notes available for future issuance are sufficient to support its continuous operations and to meet its payment obligations when liabilities fall due within the next twelve months from the date of issuance of these combined and consolidated financial statements.

Accordingly, the Company’s combined and consolidated financial statements are prepared on going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due.

5 unchanged sentences

We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

For the Nine months ended September 30,

For the three months ended

Net cash (used in) operating activities

$ (3,174,525 )

Net cash (used in) investing activities

4 unchanged sentences

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025, was primarily attributable to net loss of $1,642,387, decrease in operating lease liabilities of $233,474 as we made payment under the lease contract, decrease in deferred revenues of $766,575, and change in fair value of crypto assets of $3,342,651.

Cash outflow was partially offset by the change in fair value of warrants of $629,625, change in fair value of convertible debt of $510,138, non-cash amortization of operating lease right-of-use assets $227,948, employee stock compensation of $260,577, increase in deferred tax liabilities of $701,957, and increase in accrued liabilities and other payables of $363,041.

Net cash used in operating activities for the nine months ended September 30, 2024, was primarily attributable to net loss of $516,528, decrease in due to related party $252,519 as we repaid our related party for the amount due, and decrease in operating lease liabilities of $219,164 as we made payments under the lease contract.

Cash outflow was partially offset by the non-cash amortization of operating lease right-of-use assets $219,057, stock compensation issued for consulting services $25,120 and increase in deferred revenues of $73,538 as we collected in advance from online class subscription.

Net cash used in operating activities for the three months ended March 31, 2026, was primarily attributable to net loss of $4,187,534, decrease in deferred revenues of $115,361, and change in crypto staking rewards of $84,680.

Cash outflow was partially offset by and change in fair value of warrants of $77,625, change in fair value of convertible debt of $860,631, change in fair value of crypto assets of $2,444,670, non-cash amortization of operating lease right-of-use assets $ 78,061, employee stock compensation of $188,960, and depreciation and amortization of $120,695.

Net cash used in operating activities for the three months ended March 31, 2025, was primarily attributable to net loss of $297,207 and decrease in operating lease liabilities of $77,063 as we made payment under the lease contract and decrease in deferred revenues of $104,044.

Cash outflow was partially offset by the non-cash amortization of operating lease right-of-use assets $75,221, depreciation and amortization expenses of $16,221, increase in due to related parties of $48,365, and increase in accrued liabilities and other payables of $37,171.

Investing Activities

Net cash used in investing activities was $2,300,000 for the nine months ended September 30, 2025.

The decrease was primarily due to our purchases of crypto assets and intangible assets.

Net cash used in investing activities was $185,705 for the nine months ended September 30, 2024.

The decrease in cash flow was primarily due to our purchases of property and equipment in the amount of $185,705 during 2024.

Net cash used in investing activities was $32,583 for the three months ended March 31, 2026.

The increase was primarily due to our purchases of property and equipment.

Net cash used in investing activities was $0 for the three months ended March 31, 2025.

Financing Activities

Net cash provided by financing activities was $8,852,667 for the Nine months ended September 30, 2025.

The increase was mainly due to the issuance of promissory notes of $3,089,400, capital contribution from private placement of $4,700,000, and proceeds from the reverse recapitalization of $1,077,752.

Net cash provided by financing activities was $230,000 for the nine months ended September 30, 2024.

The increase in cash flow was mainly due to the issuance of convertible loan in the amount of $100,000 in 2024 and a loan received from a related party in the amount of $130,000.

Net cash provided by financing activities was $0 for the three months ended March 31, 2026.

Net cash provided by financing activities was $318,000 for the three months ended March 31, 2025, an increase of $218,000, as compared to $100,000 net cash provided by financing activities for the three months ended March 31, 2024.

The increase was mainly due to the issuance of promissory notes in the amount of $140,000 to the related party, and an advance of $178,000 from related party for the Company’s operating fund.

Critical Accounting Policies and Estimates

60 unchanged sentences

The second step is to measure the tax benefit as the largest amount that is 50% likely of being realized upon settlement with a taxing authority.

There were no amounts recorded at September 30, 2024 and 2023 related to uncertain tax positions.

There were no amounts recorded at March 31, 2026 and 2025 related to uncertain tax positions.

Fair Value of Financial Instruments —The Company accounts for certain assets and liabilities at fair value in accordance with the accounting guidance applicable to fair value measurements and disclosures.

10 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 2. Management’s Discussion and Analysis