What changed in this filing

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Item 1. Financial Statements

2026-08-12 compared with 2026-05-12 · 466 added, 648 removed, 483 unchanged (70% of the section changed)

1 unchanged sentence

VENHUB GLOBAL, INC.

Condensed consolidated balance sheets as of March 31, 2026 (unaudited), and December 31, 2025 (audited)

Condensed consolidated statements of operations for the three months ended March 31, 2026 (unaudited), and March 31, 2025 (unaudited)

Condensed consolidated statements of stockholders’ deficit for three months ended March 31, 2026 (unaudited), and March 31, 2025 (unaudited)

Condensed consolidated statements of cash flows for the three months ended March 31, 2026 (unaudited), and March 31, 2025 (unaudited)

Notes to condensed consolidated financial statements (unaudited)

CONSOLIDATED BALANCE SHEETS

Condensed consolidated balance sheets as of June 30, 2026 (unaudited), and December 31, 2025 (audited) F-1

Condensed consolidated statements of operations for the three months and six months ended June 30, 2026 (unaudited), and June 30, 2025 (unaudited) F-2

Condensed consolidated statements of stockholders’ deficit for three and six months ended June 30, 2026 (unaudited), and June 30, 2025 (unaudited) F-3 – F-4

Condensed consolidated statements of cash flows for the six months ended June 30, 2026 (unaudited), and June 30, 2025 (unaudited) F-5

Notes to condensed consolidated financial statements (unaudited) F-6 – F-21

VENHUB GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Current assets:

40 unchanged sentences

100,000 shares authorized;

0 shares issued and outstanding as of March 31, 2025 and December 31, 2025 - -

0 shares issued and outstanding as of June 30, 2026 and December 31, 2025 - -

Preferred Stock B- $ 0.001 par value;

20,000,000 shares authorized;

3,943 shares issued and outstanding as of March 31, 2025 and December 31, 2025 3 3

3,943 shares issued and outstanding as of June 30, 2026 and December 31, 2025 3 3

Preferred Stock C - $ 0.001 par value;

100,000 shares authorized;

100,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025 100 100

100,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025 100 100

Common stock - $ 0.001 par value;

100,000,000 shares authorized;

85,057,857 shares issued and outstanding as of March 31, 2026 and 75,024,356 as of December 31, 2025 85,057 75,024

90,392,857 shares issued and outstanding as of June 30, 2026 and 75,024,356 as of December 31, 2025 90,392 75,024

Additional paid-in capital 109,124,222 71,774,075

4 unchanged sentences

$ 8,117,669 $ 3,623,962

The accompanying notes are an integral

part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

VENHUB GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Six Months Ended

Store sales $ - $ - $ - $ 500,000

14 unchanged sentences

Interest expense 578,062 120,000 11,795,411 228,033

Settlement expense 269,000 18,513,430 269,000 18,513,430

Change in fair value of convertible debt ( 540,753 ) 3,849 391,442 65,414

6 unchanged sentences

Basic and diluted 86,302,690 28,169,261 83,719,758 28,765,414

The accompanying notes are an integral

part of these condensed consolidated financial statements.

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

VENHUB GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2026

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026

Preferred Stock A

2 unchanged sentences

Stockholders’

Accumulated Deficit

Equity (Deficit)

Beginning, January 1, 2025 75,024,356 $ 75,024 - $ - 3,943 $ 3 100,000 $ 100 $ 71,774,075 $ ( 82,168,510 ) $ ( 10,319,308 )

6 unchanged sentences

Ending March 31, 2026 85,057,857 $ 85,057 - $ - 3,943 $ 3 100,000 $ 100 $ 102,034,007 $ ( 98,777,720 ) $ 3,341,447

The accompanying notes are an integral part of these condensed

consolidated financial statements.

Issuance of common stock - warrants 5,335,000 5,335 - - - - - - 7,090,215 7,095,550

Net loss - - - - - - - - ( 10,489,868 ) ( 10,489,868 )

Ending June 30, 2026 90,392,857 $ 90,392 - $ - 3,943 $ 3 100,000 $ 100 $ 109,124,222 $ ( 109,267,588 ) $ ( 52,871 )

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

VENHUB GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

FOR THE THREE MONTHS ENDED MARCH 31, 2025

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

Preferred Stock A

2 unchanged sentences

Stockholders’

Accumulated Deficit

Equity (Deficit)

Beginning, January 1, 2025 26,500,959 $ 26,501 100,000 $ 100 593,742 $ 594 - $ - $ 16,071,724 $ ( 19,769,347 ) $ ( 3,670,428 )

Issuance of common stock 1,668,662 1,668 - - - - - - 7,607,431 - 7,609,099

Issuance of preferred

stock B, crowdfunding - - - - 10,974 11 - - 102,690 - 102,701

Issuance of preferred stock B, crowdfunding - - - - 10,974 11 - - 102,690 - 102,701

Net loss - - - - - - - - - ( 9,348,875 ) ( 9,348,875 )

Ending December 31, 2025 28,169,621 $ 28,169 100,000 $ 100 604,716 $ 605 - $ - $ 23,781,845 $ ( 29,118,222 ) $ ( 5,307,503 )

The accompanying notes are an integral part

of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Ending March 31, 2025 28,169,621 $ 28,169 100,000 $ 100 604,716 $ 605 - $ - $ 23,781,845 $ ( 29,118,222 ) $ ( 5,307,503 )

Issuance of common stock 66,785 67 - - - - - - 304,473 - 304,540

Settlement shares 3,462,375 3,462 - - - - - - 15,784,968 - 15,788,430

Issuance of common stock - warrants 810,324 811 - - - - - - 3,499,189 - 3,500,000

Issuance of preferred stock B, crowdfunding - - - - 11,555 11 - - 118,338 - 118,349

Net loss - - - - - - - - - ( 20,529,639 ) ( 20,529,639 )

Ending June 30, 2025 32,509,105 $ 32,509 100,000 $ 100 616,271 $ 616 - $ - $ 43,488,813 $ ( 49,647,861 ) $ ( 6,125,823 )

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

VENHUB GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Non-cash interest expense related to note extension 11,300,000 -

Share based compensation 8,366,728 7,913,639

Settlement expense 269,000 18,513,430

Payment of settlement expense ( 269,000 )

Non-cash interest expense related to note extension 11,300,000 -

Depreciation and amortization expense 142,322 27,952

3 unchanged sentences

Deferred offering cost - ( 88,704 )

Settlement payment related to promissory note ( 2,550,930 ) -

Repayment of promissory note ( 2,550,930 ) -

Interest payable ( 148,331 ) 200,689

Prepaid expenses ( 476,631 ) ( 59,281 )

Deferred revenue - 1,750,000

Customer deposits ( 41,645 ) ( 1,000 )

22 unchanged sentences

Cash and cash equivalents, end of period $ 2,563,439 $ 3,687,820

The accompanying notes are an integral part

of these condensed consolidated financial statements.

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

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

ORGANIZATION AND LINE OF BUSINESS

3 unchanged sentences

On October 3, 2025, the Company redomiciled from Delaware to Nevada.

The Company is a business-to-business operation that provides an innovative approach to the retail industry, specifically in the convenience store sector.

The Company develops, manufactures, and deploys autonomous Smart Stores and provides related software and support services to commercial customers, offering an innovative approach to the convenience retail industry.

VenHub is a fully autonomous and robotic-operated store that utilizes advanced technologies such as artificial intelligence (AI) and smart inventory management systems to offer a seamless shopping experience for customers.

14 unchanged sentences

Going Concern

As of March 31, 2026, the Company has sold three stores and is operating two Company owned stores which commenced operations on June 6, 2025, and November 4, 2025 respectively Since its inception, the Company has experienced recurring losses and, as of March 31, 2026, reported an accumulated deficit of $ 98,777,720 and negative cash flows from operating activities for the three months then ended.

A significant portion of the Company’s accumulated deficit relates to non-cash charges, including share based compensation, interest expense and fair value adjustments associated with its financing activities.

Although these matters raise substantial doubt about the Company’s ability to continue as a going concern, management believes the Company has made progress in advancing its commercialization strategy and during the next twelve months, the Company intends to fund its operations with funds from revenue producing activities by fulfilling the pre order list along with exploring both additional equity and debt financing.

If the Company cannot secure additional short-term capital, it may cease operations.

These financial statements and related notes thereto do not include any adjustments that might result from these uncertainties.

As of June 30, 2026, the Company has sold three stores and is operating two Company owned stores which were operational on June 6, 2025 and November 4, 2025.

Since its inception, the Company has experienced recurring losses and, as of June 30, 2026, reported an accumulated deficit of $ 109,267,588 and negative cash flows from operating activities for the six months then ended.

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

During the next twelve months, the Company expects to fund its operations primarily through additional capital raising activities, including equity and debt financing and investments from existing and new investors.

As the Company continues to commercialize its Smart Stores, it also expects to generate revenue from direct Smart Store sales and, over time, recurring SaaS and related service revenue.

The Company expects its reliance on external financing to decrease as revenue from Smart Store sales and recurring services increases.

However, the Company has not recognized Smart Store sales revenue during the six months ended June 30, 2026, and there can be no assurance that anticipated Smart Store sales, SaaS revenue, or additional financing will occur on the timing or in the amounts necessary to fund operations.

If the Company cannot secure sufficient additional capital or generate sufficient revenue, it may be required to reduce or cease operations.

Reclassification

Certain prior-period amounts have been reclassified to conform to the current-period presentation.

During the preparation of the accompanying financial statements, the Company determined that certain non-cash fair value adjustments related to convertible notes accounted for under the fair value option had previously been presented within interest expense.

These amounts have been reclassified to "Change in fair value of convertible debt" within other expense.

The reclassification had no effect on total other expense, net loss, earnings (loss) per share, cash flows, total assets, total liabilities, or stockholders' equity.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Inventories are stated at the lower of cost or estimated realizable value.

The Company determines the cost of inventory using the first-in, first-out, or FIFO, method.

The Company capitalizes inventory costs associated with the Company’s product based on management’s judgment, future commercialization is considered probable, and the future economic benefit is expected to be realized;

otherwise, such costs are expensed as research and development.

The following table illustrates inventory as of March 31, 2026, and December 31, 2025:

March 31, 2026 December 31, 2025

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Inventories are stated at the lower of cost or net realizable value in accordance with ASC 330, Inventory.

Cost is determined using the first-in, first-out ("FIFO") method and includes the purchase price of raw materials, freight, applicable taxes, and other costs incurred to bring inventory to its present location and condition.

The Company regularly evaluates inventory for excess quantities, obsolescence, slow-moving items, and changes in expected future demand.

When inventory is determined to be obsolete, damaged, or its carrying value is no longer recoverable, the inventory is written down to its estimated net realizable value.

Such write-downs establish a new cost basis for the affected inventory and are not subsequently reversed if market conditions improve.

The following table illustrates inventory as of June 30, 2026, and December 31, 2025:

2026 December 31,

Raw material 2,308,862 1,021,947

4 unchanged sentences

Work in process includes partially assembled robotic systems and artificial intelligence hardware integrated with proprietary software that are in various stages of completion.

Reclassification

Certain amounts reported in the prior year financial statements have been reclassified to conform to the current year’s presentation.

Inventory is stated at the lower of cost or net realizable value in accordance with ASC 330, Inventory .

The Company periodically evaluates inventory for excess quantities, obsolescence, and recoverability.

During the three and six months ended June 30, 2026, the Company determined that certain production inventory associated with a product design was no longer expected to be utilized in the manufacture of products for sale and had no alternative future use, as we made several process improvements to the design of the store.

Accordingly, the Company recorded an inventory write-down of $ 232,134 to its estimated net realizable value, which was zero for the affected inventory.

The resulting charge is included within cost of good sold in the accompanying condensed statements of operations..

Use of Estimates

13 unchanged sentences

COGS is recorded at the time revenue is recognized, which typically coincides with the transfer of control of goods to the customer.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Concentration of Credit Risk

2 unchanged sentences

At times, the Company may maintain balances in excess of the federally insured limits.

As of March 31, 2026, the Company’s cash was $ 5,545,468 more than the $ 250,000 federally insured limit.

As of June 30, 2026, the Company’s cash was $ 2,313,439 more than the $ 250,000 federally insured limit.

At December 31, 2025, the Company’s cash was less than $ 250,000 and fully insured.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Cash and Cash Equivalents

The Company considers short-term, highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

As of March 31, 2026, the Company had $ 5,796,468 cash on hand and no cash equivalents.

As of June 30, 2026, the Company had $ 2,563,439 cash on hand and no cash equivalents.

At December 31, 2025, the Company had $ 89,634 of cash on hand and no cash equivalents.

7 unchanged sentences

When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the balance sheet accounts and the resultant gain or loss is reflected in income.

As of March 31, 2026, the Company had $ 1,276,439 of property and equipment, net.

As of June 30, 2026, the Company had $ 1,343,264 of property and equipment, net.

The Company had $ 1,275,078 of property and equipment, net at December 31, 2025.

4 unchanged sentences

The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors.

The Company had no impairment as of March 31, 2026.

The Company had no impairment as of June 30, 2026.

The Company capitalizes the costs of constructing and preparing company-owned retail stores and display centers for their intended use.

5 unchanged sentences

If the carrying value exceeds expected cash flows, an impairment charge is recognized equal to the amount by which the carrying value exceeds fair value.

As of March 31, 2026, the net book value of capitalized company-owned store and display assets was $ 931,835 , which is included in “Property and Equipment, net” on the consolidated balance sheets.

There was $ 41,218 depreciation expense related to company-owned store assets/display centers for the three months ended March 31, 2026 and no depreciation expense for the three months ended March 31, 2025.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Depreciation expense for the three months ended March 31, 2026 and 2025, was $ 68,764 and $ 11,308 respectively.

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

As of June 30, 2026, and December 31, 2025, the net book value of capitalized company-owned store and display assets was $ 890,617 and $ 973,052 respectively, which is included in “Property and Equipment, net” on the consolidated balance sheets.

There was $ 41,218 depreciation and amortization expense related to company-owned store assets/display centers for the three months ended June 30, 2026 and no depreciation expense for the three months ended June 30, 2025.

For the six months ended June 30, 2026 there was $ 82,435 in depreciation expense and no depreciation expense for the six months ended June 30, 2025.

For the three months ended June 30, 2026 and 2025 depreciation and amortization expense was $ 73,559 and $ 12,723 respectively.

Depreciation and amortization expense for the six months ended June 30, 2026, and 2025, was $ 142,322 and $ 27,952 respectively.

Deferred Revenue

1 unchanged sentence

Deferred revenue is recognized as earned revenue on the income statement as the good or service is delivered to the customer.

The balance at March 31, 2026 and December 31, 2025 was $ 1,500,000 .

The balance at June 30, 2026, and December 31, 2025 was $ 1,500,000 .

Customer Deposits

2 unchanged sentences

Customer deposits are refundable until the underlying order is fulfilled.

The balance at March 31, 2026 and December 31, 2025 was $ 179,500 and $ 203,645 respectively.

The balance at June 30, 2026, and December 31, 2025 was $ 162,000 and $ 203,645 respectively.

Fair Value Measurements

11 unchanged sentences

Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable.

Refer to Note 10 for liabilities measured at fair value at March 31, 2026, and December 31, 2025.

Refer to Note 10 for liabilities measured at fair value at June 30, 2026, and December 31, 2025.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Revenue Recognition

5 unchanged sentences

5) Recognize revenue when the entity satisfies a performance obligation.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

The Company’s primary sources of revenue are from the sale of Smart Stores and, once fully commercialized, recurring subscription fees for its SaaS platform and related maintenance and support services.

20 unchanged sentences

The Company expects to begin charging for such services in the future and will recognize revenue over the service period in accordance with ASC 606.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

The Company entered into SaaS subscription agreements in connection with the opening of its North Hollywood, Glendale and Hollywood Smart Stores.

Although SaaS is a distinct performance obligation under ASC 606, the Company elected to provide such services free of charge as part of its early commercialization strategy.

Accordingly, while the contracts were identified and performance obligations allocated, the transaction price attributable to SaaS was zero , and no SaaS revenue was recognized for the three months ended March 31, 2026 or 2025.

Management expects that, in future periods, SaaS services will be billed and revenue recognized ratably over the contract term as the services are provided.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Consistent with ASC 606-10-25-19 through 22, we considered whether the customer can benefit from the good or service either on its own or together with other readily available resources;

5 unchanged sentences

For the three months ended

Timing of Recognition March 31, 2026 March 31, 2025

Point in Time $ - $ 500,000

Point in Time 67,836 -

Over Time - -

Timing of Recognition June 30,

2026 June 30,

Point in Time - Store Sales $ - $ -

Point in Time - Product Sales 86,614 13,615

$ 86,614 $ 13,615

For the six months ended

Timing of Recognition June 30,

2026 June 30,

Point in Time - Store Sales $ - $ 500,000

Point in Time - Product Sales 154,450 13,615

$ 154,450 $ 513,615

Organizational Costs

1 unchanged sentence

The Company expenses advertising costs as they are incurred.

The Company incurred $ 640,941 and $ 140,988 in advertising expense for the three months ended March 31, 2026, and 2025, respectively.

The Company incurred $ 184,428 and $ 263,375 in advertising expense for the three months ended June 30, 2026, and 2025, respectively.

For the six months ended June 30, 2026 and 2025 the Company incurred $ 825,369 and $ 404,363 respectively.

Research and Development

1 unchanged sentence

All research and development costs relate to developing our smart store technology.

Costs incurred for the three months ended March 31, 2026, and 2025, were $ 88,715 and $ 301,355 respectively.

Costs incurred for the three months ended June 30, 2026, and 2025, were $ 182,603 and $ 131,016 respectively.

For the six months ended June 30, 2026 and 2025, research and development costs were $ 271,318 and $ 432,371 respectively.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

The Company met the criteria for capitalization of costs related to products to be sold at the beginning of the first quarter of 2025.

7 unchanged sentences

Refer to Note 7 for more information.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Convertible Notes

4 unchanged sentences

These measurements were classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs.

During the three months ended March 31, 2026, the Company repaid all outstanding amounts under the convertible notes.

As a result, no convertible note liability remained outstanding as of March 31, 2026.

During the three and six months ended June 30, 2026, the Company repaid all outstanding amounts under the convertible notes.

As a result, no convertible note liability remained outstanding as of June 30, 2026.

Any remaining effects of prior fair value adjustments and financing costs associated with the notes were recognized in the statement of operations upon repayment.

8 unchanged sentences

The Company evaluates capitalized software costs for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

As of March 31, 2026, capitalized software development costs totaled $ 101,292 , which is incorporated in Property Plant and Equipment, net.

There was $ 6,014 of amortization for the three months ended March 31, 2026 and no amortization for the three months ended March 31, 2025.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

As of June 30, 2026, capitalized software development costs totaled $ 95,277 , which is incorporated in Property Plant and Equipment, net.

There was $ 6,014 and $ 12,028 of amortization for the three and six months ended June 30, 2026 and no amortization for the three and six months ended June 30, 2025.

There was $ 107,306 of capitalized software development costs at December 31, 2025.

6 unchanged sentences

See Note 11 for further information.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

15 unchanged sentences

COMMITMENTS AND CONTINGENCIES

During the three and six months ended June 30, 2026, the Company recognized settlement expense of $ 269,000 related to the resolution of certain legal and commercial matters.

The settlement expense is included within other expenses in the accompanying condensed consolidated statements of operations.

The settlement obligations were satisfied during the quarter, and accordingly, there was no outstanding settlement liability related to these matters as of June 30, 2026.

On May 16, 2025, the Company entered into a settlement agreement with Target Global Acquisition I Corp.

Pursuant to the Settlement and Release Agreement, the Parties mutually agreed to terminate the Agreement and Plan of Merger, by and among Venhub and TGAA Parties, dated as of December 2, 2024.

On May 21, 2025, the full Settlement Consideration was delivered, and the Business Combination Agreement, terminated in accordance with their terms (subject to the survival of certain confidentiality provisions).

On May 21, 2025, the full Settlement Consideration was delivered, and the Business Combination Agreement was terminated in accordance with their terms (subject to the survival of certain confidentiality provisions).

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

As consideration for the termination, the Parties agreed to the following consideration to be provided to TGAA:

2 unchanged sentences

● 3,462,375 shares of Venhub common stock.

The Company recognized the loss under ASC 450-20-25-2 as an estimated loss from a loss contingency and shall be accrued by a charge to income if both of the following conditions are met:

Information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and the amount of loss can be reasonably estimated.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Events of default:

if there shall be any Event of Default (as defined below) hereunder, at the option and upon the declaration of the Holder and upon written notice to the Company (which election and notice shall not be required in the case of an Event of Default under subsection (i) or (ii) below), this Note shall accelerate and all principal and unpaid accrued interest shall become due and payable.

The occurrence of any one or more of the following shall constitute an “Event of Default”:

(i) any Borrower files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing;

(ii) an involuntary petition is filed against any Borrower (unless such petition is dismissed or discharged within 45 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee or assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of such Borrower);

(iii) (a) the security interest created by this Note shall at any time fail to constitute a valid security interest on all of the Collateral (as defined below) purported to be encumbered hereby or (b) any Borrower challenges the validity of the security interest created by this Note;

(iv) the Borrowers fail to make any payments when due and payable under this Note that continues for more than 5 business days;

(v) the Borrowers fail to satisfy any covenant, obligation or other requirement (A) under Sections 3(d), (f), (g) and (h) of this Note or (B) otherwise under this Note or any agreements related thereto that, with respect to this clause (B), is not cured within 30 days of notice or the Borrowers’ knowledge;

(vi) any representation or warranty made by the Borrowers pursuant to this Note shall prove to be incorrect, false or misleading;

(vii) the occurrence of an “event of default” or similar event with respect to any other debt of the Borrowers in excess of $ 750,000 that permits the lenders or holders of such debt to accelerate the amounts due and payable thereunder;

provided that if such “event of default” or similar event is cured or waived within 30 days after the occurrence thereof, and the lenders or holders thereof have not accelerated the amounts due and payable thereunder, the corresponding Event of Default pursuant to this clause shall be automatically deemed cured.

Upon any declaration of acceleration, the Maturity Date shall be deemed to be the date of such acceleration and the principal and interest under this Note shall become immediately due and payable and the Holder shall be entitled to exercise all of its rights and remedies hereunder, under applicable law, and as provided for under this Note, whether at law or in equity.

The failure of the Holder to declare this Note due and payable upon the occurrence and during the continuation of an Event of Default shall not be a waiver of its right to do so, and the Holder shall retain the right to declare this Note due and payable.

As of March 31, 2026, the promissory note has been paid off in its entirety.

The Company recognized the settlement in accordance with ASC 450, Contingencies, when the loss became probable and reasonably estimable.

The secured promissory note contained customary representations, covenants and events of default, including payment defaults, bankruptcy or insolvency events, material breaches of the note agreement and certain cross-default provisions, which entitled the holder to accelerate amounts outstanding upon the occurrence of an event of default.

As of June 30, 2026, the promissory note had been paid in full, and no obligations remained outstanding under the settlement agreement.

See Note 6 for lease commitments.

4 unchanged sentences

The following notes signed with the CEO are unsecured and due on demand:

On January 2, 2026, the CEO signed an promissory note with the Company for $ 250,000 .

On January 2, 2026, the CEO signed a promissory note with the Company for $ 250,000 .

On January 21, 2026, the CEO signed a promissory note with the Company for $ 250,000 .

On January 27, 2026, the CEO signed a promissory note with the Company for $ 450,000 .

On February 3, 2026, the CEO signed a promissory note with the Company for $ 100,000 .

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

On February 9, 2026, the CEO signed a promissory note with the Company for $ 50,000

All notes expire at the annual date from issuance and accrue interest at 7 % per annum.

As of March 31, 2026 the total of related party loans to our CEO is $ 2,100,000 .

As of June 30, 2026 the total of related party loans to our CEO is $ 2,100,000 .

At December 31, 2025 the balance was $ 1,000,000 .

As of March 31, 2026, the Chief Executive Officer had $ 752,633 , the President $ 1,151,145 and the Chief Financial Officer $ 83,000 , respectively, in accrued compensation that they have voluntarily deferred until future periods.

Payments of $ 50,000 , $ 252,188 and $ 78,000 were made to each respectively during the three months ended March 31, 2026.

As of June 30, 2026, the Chief Executive Officer had $ 1,002,633 , the President $ 1,263,645 and the Chief Financial Officer $ 83,000 , respectively, in accrued compensation that they have voluntarily deferred until future periods.

Payments of $ 75,000 and $ 45,000 were made to the President and Chief Financial Officer respectively during the three months ended June 30, 2026.

For the six months ended June 30, 2026 payments of $ 300,000 , $ 294,688 and $ 115,000 were made to the Chief Executive Officer, President and Chief Financial Officer respectively.

Payments of $ 60,000 and $ 18,000 were made to the President and Chief Financial Officer respectively for the three months ended June 30, 2025.

For the six months ended June 30, 2025 payments of $ 195,000 and $ 36,000 were made to the President and Chief Financial Officer respectively.

At December 31, 2025, the Chief Executive Officer had $ 802,633 , the President $ 1,195,833 and the Chief Financial Officer $ 116,022 , respectively, in accrued compensation that they have voluntarily deferred until future periods.

Payments of $ 135,000 and $ 18,000 were made to the President and Chief Financial Officer respectively for the three months ended March 31, 2024.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

During the three and six months ended June 30, 2026, the Company engaged an immediate family member of its Chief Executive Officer to provide operational consulting services.

Compensation paid to the employee during the three and six months ended June 30, 2026, was $ 87,500 .

The compensation was determined based on the services performed and is included within operating expenses in the accompanying condensed consolidated financial statements.

As of June 30, 2026, there were no amounts due to or from this related party.

CROWDFUNDING OFFERING

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The incremental borrowing rate was determined to be 3.82 % for Las Vegas and 3.6 % for Union Station, as this is the rate which represents the incremental borrowing rate for the Company, on a collateralized basis, in a similar economic environment with similar payment terms.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

On February 11, 2025, the Company signed an operating lease for a new warehouse in Bell Gardens, CA.

The purpose of the space is to store materials for future store orders and is month to month.

The Company vacated this location in May of 2026.

On May 29, 2025, the Company signed a right of entry with Los Angeles County Metro Transportation Authority for its flagship Company owned store.

The right of entry is month to month with a $ 1,500 monthly fee.

On May 27, 2026 the Company extended this lease to May 26, 2028.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

On March 11, 2026, the Company signed an operating lease for new warehouse space in Las Vegas, which is a triple net with a term of one year.

6 unchanged sentences

Long term portion 614,091

The weighted-average remaining term of the Company’s operating leases was 4.5 years and the weighted-average discount rate used to measure the present value of the Company’s operating lease liabilities was 5.5 % as of March 31, 2026.

Right of use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

5 unchanged sentences

In determining the discount rate to use in calculating the present value of lease payments, the Company estimates the rate of interest it would pay on a collateralized loan with the same payment terms as the lease by utilizing bond yields traded in the secondary market to determine the estimated cost of funds for the particular tenor.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

SHARE BASED COMPENSATION

5 unchanged sentences

All stock issued to third parties vested immediately upon issuance.

The Company issued a total of 308,500 and 1,668,662 shares of common stock, recognizing share-based compensation expense for these awards totaling $ 1,271,178 and $ 7,609,099 for the three months ended March 31, 2026 and 2025 respectively.

Because all awards vested immediately upon issuance, the Company had no unrecognized compensation cost related to unvested stock-based awards as of March 31, 2026 and December 31, 2025.

The Company issued a total of 5,335,000 and 5,643,500 shares of common stock, recognizing share-based compensation expense for these awards totaling $ 7,095,550 and $ 8,366,728 for the three and six months ended June 30, 2026 respectively.

The Company issued a total of 66,785 and 1,735,447 shares of common stock recognizing share-based compensation expense for these awards totaling $ 304,540 and $ 7,913,639 for the three and six months ended June 30, 2025.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Because all awards vested immediately upon issuance, the Company had no unrecognized compensation cost related to unvested stock-based awards as of June 30, 2026, and December 31, 2025.

The Company is evaluating the adoption of an equity compensation plan intended to provide equity-based incentives to employees, directors, and consultants.

Such a plan, if adopted, may be registered on Form S-8 under the Securities Act of 1933, as amended.

As of March 31, 2026, no equity compensation plan has been approved or implemented, and no awards have been granted.

As of June 30, 2026, no equity compensation plan has been approved or implemented, and no awards have been granted.

The timing, terms, and size of any such plan remain subject to approval by the Company’s Board of Directors and, if required, its stockholders.

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CONVERTIBLE NOTE

On August 16, 2024, December 2, 2024 and February 14, 2025, the Company executed convertible promissory note purchase agreements (the “Purchase Agreements”) with a third-party investor under which VenHub would issue a series of notes (individually the “Note” and collectively, the “Notes”) as part of a private, unregistered offering.

The Purchase Agreements provided for the following terms for Notes to be issued:

● Maturity date ending five years from execution of each Note (the “Maturity Date”)

● Interest is payable semiannually on February 15 and August 15, beginning February 15, 2025 (the “Interest Payment Date”)

● Interest accrues based on a 360-day year

● Interest is payable (i) in kind (“PIK Interest”) which is added to the principal amount of each Note and (ii) in cash (“Cash Interest”) on each Interest Payment Date

● Interest rates for the first year ending August 15, 2025, are 9 % for PIK interest and 3 % for Cash Interest

● Interest rates increase each of the following two years beginning August 16 to a maximum of 12 % PIK Interest and 6 % Cash Interest

● Unpaid interest and principal are due in cash at the Maturity Date

On August 19, 2024, the Company executed two Notes with one investor each for a combined $ 1,000,000 in note principal.

On December 3, 2024, the Company executed one Note with one investor for $ 200,000 in note principal.

On December 4, 2024, the Company executed three Notes with three investors for a combined $ 1,483,000 in note principal.

On December 6, 2024, the Company executed two Notes with two investors for a combined $ 667,000 in note principal.

On February 14, 2025 the Company executed five notes with five investors for a combined $ 650,000 .

All amounts in principal total $ 4,000,000 and $ 100,000 of debt issuance costs were expensed to interest expense due to the election of the fair value option.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

The Notes have repayment and conversion features, as described in the following:

Upon execution of a financing or series of financings for gross cash proceeds of at least $ 25 million, including issuance of Notes (a “Qualified Financing”) prior to a business combination, as defined in the Notes (a “Business Combination”):

Note shall be, at the election of the Holder, (i) converted into a number of shares of Common Stock equal to the quotient obtained by dividing (A) the Outstanding Principal Balance on this Note as of the Conversion Date by (B) six dollars ($ 6.00 ) and rounding down to the nearest whole number of shares, (ii) redeemed for cash by the Company at a value equal to 1.2 multiplied by the MOIC (as defined below), or (iii) both converted into shares of Common Stock and redeemed for cash at an aggregate value equal to 1.2 multiplied by the MOIC in such proportion as determined by the Holder.

Upon execution of a Qualified Financing after a Business Combination, but prior to August 19, 2025:

Note shall be, at the election of the Holder, (i) converted into shares of Common Stock at the then applicable Note Conversion Price (defined below), (ii) redeemed for cash by the Company at a value equal to 1.2 multiplied by the MOIC, or (iii) both converted into shares of Common Stock and redeemed for cash at an aggregate value equal to 1.2 multiplied by the MOIC in such proportion as determined by the Holder.

At any time following the consummation of a Business Combination and prior to the Maturity Date:

The Holder of the Note may elect to convert the Note at the then-applicable Note Conversion Price (defined below), subject to the Optional Redemption by the Company (defined below).

Note Conversion Price

(i) Following the consummation of a Business Combination by the Company and for sixty (60) days thereafter, the quotient obtained by dividing (A) the Outstanding Principal Balance on this Note as of the Conversion Date by (B) $ 7.50 and rounding down to the nearest whole number of shares.

(ii) From the date that is sixty (60) days following the consummation of a Business Combination until the first anniversary of the consummation of the Business Combination, the quotient obtained by dividing (A) the Outstanding Principal Balance on this Note as of the Conversion Date by (B) the product

(iii) obtained by multiplying (y) the trailing 20-day volume weighted average price (“VWAP”) per share of the Common Stock on Nasdaq as of the Conversion Date and (z) 0.8, and rounding down to the nearest whole number of shares.

(iv) From the first anniversary of the consummation of the Business Combination until the second anniversary of the consummation of the Business Combination, the quotient obtained by dividing (A) the Outstanding Principal Balance on this Note as of the Conversion Date by (B) the product obtained by multiplying (y) the 20-day VWAP per share of Common Stock on Nasdaq measured as of the Conversion Date and (z) 0.85 and rounding down to the nearest whole number of shares.

(v) From the second anniversary of the consummation of the Business Combination until the Maturity Date, the quotient obtained by dividing (A) the Outstanding Principal Balance on this Note as of the Conversion Date by (B) the product obtained by multiplying (y) the 20-day VWAP per share of Common Stock on Nasdaq measured as of the Conversion Date and (z) 0.9, and rounding down to the nearest whole number of shares.

On August 16, 2024, December 2, 2024, and February 14, 2025, the Company entered into convertible promissory note purchase agreements with a third-party investor pursuant to which it issued an aggregate principal amount of $ 4,000,000 of convertible promissory notes in a private placement.

The notes bear both payment-in-kind ("PIK") and cash interest, with interest rates that increase over the term of the notes, and mature five years from their respective issuance dates.

The notes include customary conversion, redemption, and repayment provisions, including conversion upon certain qualified financing and business combination events, optional redemption rights, and mandatory repayment under specified circumstances.

The Company elected the fair value option under ASC 825 for the notes;

accordingly, the $ 100,000 of debt issuance costs incurred upon issuance were recognized as interest expense.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

Optional Redemption by the Company:

At any time after August 19, 2026, and prior to the Maturity Date, at the Company’s option upon at least one (1) Business Day’s prior written notice, the Company may redeem for cash all (but not less than all) of the Outstanding Principal Balance on this Note at a price equal to 1.25 multiplied by the MOIC:

A multiple of invested capital, to be calculated as follows:

(i) the sum of all amounts received in cash by the Holder (including, without limitation, interest paid in cash and PIK Interest) in respect of the Outstanding Principal Balance evidenced by this Note divided by (ii) the Initial Outstanding Principal Balance;

for the avoidance of doubt the Outstanding Principal Balance shall be reduced by the amount of any portion of the Note that has been converted.

In the event that the Company does not consummate a Business Combination or Qualified Financing on or before December 31, 2025:

The Company shall redeem all (but not less than all) of the Outstanding Principal Balance on this Note including any accrued and unpaid interest (including PIK Interest).

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

On January 2, 2026, the Company entered into an agreement with certain noteholders to extend the maturity date of the notes to March 31, 2026.

1 unchanged sentence

The Company evaluated the amendment under ASC 470-50, Debt Modifications and Extinguishments , and concluded that the transaction represented a debt modification.

Accordingly, the fair value of the shares issued was accounted for as a financing fee.

The Company estimated the fair value of the shares based on its most recent valuation of common stock of $ 5.65 per share, as no intervening events, such as a business combination or qualified financing, occurred prior to December 31, 2025, that would materially impact the valuation.

The resulting financing cost was recognized as interest expense over the extension period.

During the three months ended March 31, 2026, the Company repaid all outstanding amounts under the convertible notes.

As a result, no convertible note liability remained outstanding as of March 31, 2026.

Any remaining amounts associated with the notes, including the effects of prior fair value adjustments and financing costs, were recognized in the statement of operations upon repayment.

The Company recognized $ 932,145 of change in fair value of convertible debt through the payoff dates for the three months ended March 31, 2026.

For the three months ended March 31, 2025, the Company recognized $ 61,565 of change in fair value of convertible debt.

The Company did not recognize a material gain or loss upon settlement as the carrying value of the notes approximated the repayment amount.

Accordingly, the fair value of the common shares issued was recognized as a debt modification cost (recorded as an adjustment to the carrying amount of the modified debt).

The Company estimated the fair value of the shares using its most recent valuation of common stock of $ 5.65 per share, as no intervening events, such as a business combination or qualified financing, had occurred prior to December 31, 2025 that would materially affect the valuation.

The resulting debt modification cost was amortized to interest expense over the extension period ending March 31, 2026.

The Company repaid all outstanding amounts under the convertible notes, during the three months ended March 31, 2026.

As a result, no convertible note liability remained outstanding as of June 30, 2026.

The Company recognized $( 540,753 ) and $ 391,442 of change in fair value of convertible debt through the payoff dates for the three and six months ended June 30, 2026.

For the three and six months ended June 30, 2025, the Company recognized $ 3,849 and $ 65,414 of change in fair value of convertible debt.

FAIR VALUE MEASUREMENT

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values.

There were no transfers between fair value measurement levels during the three months ended March 31, 2026, or 2025.

The convertible notes, previously classified as Level 3 liabilities, were repaid during the period and therefore no longer required fair value measurement as of March 31, 2026.

There were no transfers between fair value measurement levels during the three and six months ended June 30, 2026, or 2025.

The convertible notes, previously classified as Level 3 liabilities, were repaid during the period and therefore no longer required fair value measurement as of June 30, 2026.

The Company’s financial assets and liabilities measured at fair value at December 31, 2025 are as follows:

Fair Value Measurements as of December 31, 2025

Fair Value Measurements as of

December 31, 2025

(Level 1) (Level 2) (Level 3) Total

Convertible debt at fair value $ - $ - $ 4,567,949 $ 4,567,949

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

The derivative portion of the convertible note was valued using a Black-Scholes simulation model.

As a result of the election to apply the fair value option, the value of the conversion feature is not separately presented on the balance sheet.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

The following assumptions were used in determining the fair value of the convertible notes as of December 31, 2025 as follows:

December 31 2025

Risk free right 3.72 %

8 unchanged sentences

All material long-lived assets are located in the United States.

The following table illustrates significant segment expenses that are regularly provided to the CODM for the three months ended March 31, 2026 and 2025:

The following table illustrates significant segment expenses that are regularly provided to the CODM for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

3 unchanged sentences

Total operating expenses 9,970,929 1,899,146

Six Months Ended

General and administrative expenses 12,879,863 10,187,664

Payroll and compensation 1,283,103 635,000

Research and development 271,318 432,371

Total operating expenses 14,434,284 11,255,035

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

On February 10, 2026, VenHub Global, Inc.

6 unchanged sentences

The Company analyzed the Subscriber Warrants and determined that they met the requirements under ASC 815-40 to be classified in stockholders’ equity.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2026, AND 2025

The Company allocated proceeds from the Offering to the shares of Common Stock sold and the Warrants issued on a relative fair value basis.

2 unchanged sentences

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest was $ 89,397 and $ 27,566 for the three months ended March 31, 2026 and 2025.

There was no cash paid for income taxes for the three months ended March 31, 2026 and 2025.

Cash paid for interest was $ 117,406 for the six months ended June 30, 2026.

For the six months ended June 30, 2025 the Company paid $ 27,344 in interest.

All amounts paid related to the convertible notes.

There was no cash paid for income taxes for the six months ended June 30, 2026 and 2025.

Non-cash investing and financing activities

The Company issued 2,000,000 shares of common stock in connection with the extension of convertible notes (see Note 9) and issued 7,700,000 shares and warrants in connection with a private placement financing (see Note 12) for the three months ended March 31, 2026.

For the three months ended March 31, 2025 the Company issued 10,974 of series B preferred shares in relation to its crowdfunding.

For the six months ended June 30, 2025 the Company issued 22,529 of series B preferred shares in relation to its crowdfunding and 810,324 shares in connection to warrants.

VENHUB GLOBAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE AND SIX MONTHS ENDED JUNE 30, 2026, AND 2025

STOCKHOLDERS WRITTEN CONSENT

During the three and six months ended June 30, 2026, the Company’s Board of Directors and stockholders holding a majority of the Company’s voting power approved certain corporate actions by written consent.

In connection with these actions, the Company filed a Preliminary Information Statement on Schedule 14C with the Securities and Exchange Commission.

The approved corporate actions included (i) the adoption of the Company’s 2026 Equity Incentive Plan, (ii) the reservation of shares of the Company’s common stock for issuance under the 2026 Equity Incentive Plan, and (iii) an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 300,000,000 shares.

As of June 30, 2026, the approved corporate actions remained subject to the applicable notice period under Section 14(c) of the Securities Exchange Act of 1934 and, with respect to the increase in authorized common stock, the filing of the applicable amendment to the Company’s Certificate of Incorporation.

Accordingly, these actions did not affect the accompanying condensed consolidated financial statements as of and for the three and six months ended June 30, 2026.

NASDAQ MINIMUM BID PRICE COMPLIANCE

On March 20, 2026, the Company received a notification letter from The Nasdaq Stock Market LLC indicating that the closing bid price of the Company's common stock had been below the minimum bid price requirement of $ 1.00 per share for 30 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2).

The notification had no immediate effect on the listing or trading of the Company's common stock.

During the quarter ended June 30, 2026, the Company regained compliance with the minimum bid price requirement after the closing bid price of its common stock remained at or above $ 1.00 per share for the period required under the Nasdaq Listing Rules.

Accordingly, Nasdaq notified the Company that it had regained compliance, and the matter is now closed.

SUBSEQUENT EVENTS

On April 30, 2026, the Company received a written notice from The Nasdaq Stock Market LLC indicating that the Company is not in compliance with the minimum bid price requirement of $ 1.00 per share, as set forth in Nasdaq Listing Rule 5450(a)(1), based on the closing bid price of the Company’s common stock for the previous 30 consecutive business days.

In accordance with Nasdaq Listing Rules, the Company has been provided a compliance period of 180 calendar days, or until October 27, 2026, to regain compliance.

If at any time during this period the closing bid price of the Company’s common stock is at least $ 1.00 per share for a minimum of ten consecutive business days, Nasdaq will provide written confirmation that the Company has regained compliance.

If the Company does not regain compliance within the initial compliance period, the Company may be eligible for an additional compliance period, subject to meeting certain requirements, including submitting a transfer application to the Nasdaq Capital Market.

The Company intends to actively monitor the bid price of its common stock and will consider available options to regain compliance with the Nasdaq minimum bid price requirement, including, if necessary, implementing a reverse stock split.

The receipt of the notice does not result in the immediate delisting of the Company’s common stock, and the Company’s shares will continue to trade on Nasdaq under the symbol “VHUB” during the compliance period.

VENHUB GLOBAL, INC.’S MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Throughout this section, unless otherwise noted “we,”

“us,” “our,” “Company,” “VenHub,” refers to VenHub Global, Inc., and its consolidated

subsidiaries.

You should read the following discussion and analysis in conjunction with VenHub’s consolidated financial statements,

which VenHub has prepared in accordance with GAAP, included elsewhere in this proxy statement.

This discussion contains forward-looking statements

that involve risks and uncertainties.

VenHub’s actual results and timing of events could differ materially from those anticipated

in these forward-looking statements due to various factors, including those set forth under “Risk Factors” and elsewhere

in this proxy statement/prospectus.

The Company evaluated subsequent events through the date the condensed consolidated financial statements were issued.

On July 7, 2026, the Company filed a Definitive Information Statement on Schedule 14C with the Securities and Exchange Commission relating to certain corporate actions previously approved by the Company’s Board of Directors and stockholders holding a majority of the Company’s voting power by written consent.

On July 28, 2026, the Company filed the Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Nevada, thereby increasing the Company’s authorized common stock from 100,000,000 shares to 300,000,000 shares.

The increase in authorized common stock did not affect the number of shares of common stock issued and outstanding and did not have an impact on the Company’s condensed consolidated financial position, results of operations, or cash flows as of June 30, 2026.

Subsequent to June 30, 2026, the Company issued an additional 1,000,000 shares of common stock in relation and part of the service agreements signed on June 9, 2026.

VENHUB GLOBAL, INC.’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Throughout this section, unless otherwise noted “we,” “us,” “our,” “Company,” “VenHub,” refers to VenHub Global, Inc., and its consolidated subsidiaries.

You should read the following discussion and analysis in conjunction with VenHub’s consolidated financial statements, which VenHub has prepared in accordance with GAAP, included elsewhere in this proxy statement.

This discussion contains forward-looking statements that involve risks and uncertainties.

VenHub’s actual results and timing of events could differ materially from those anticipated in these forward-looking statements due to various factors, including those set forth under “Risk Factors” and elsewhere in this proxy statement/prospectus.

Business Model

VenHub Global, Inc.

is a fully autonomous and robotic-operated store

that utilizes advanced technologies such as artificial intelligence (AI) and smart inventory management systems to offer a seamless shopping

experience for customers.

is a fully autonomous and robotic-operated store that utilizes advanced technologies such as artificial intelligence (AI) and smart inventory management systems to offer a seamless shopping experience for customers.

The Company intends VenHub technology to combine the convenience of a store with the efficiency of robotics.

This will be achieved by providing customers with a unique shopping experience that will be fully autonomous and that operates 24/7.

Company believes that with its use of advanced sensors, artificial intelligence, and robotics, VenHub is designed to ensure that customers

will always have access to products with a few taps on their smartphones.

From scanning and purchasing products to bagging and delivering

them, VenHub’s robots will be able to take care of everything in a seamless and efficient manner.

The store’s artificial intelligence

algorithm will be able to keep track of customer preferences, allowing it to tailor its offering to meet individual customer’s tastes

and preferences.

The Company’s business model is designed to generate both one-time deployment revenue from the sale and installation of Smart Store

units, as well as recurring revenue from SaaS subscriptions, maintenance agreements, support services, and other platform-related offerings.

While the Company has not yet charged customers for SaaS or maintenance services as part of its early commercialization strategy, management

expects recurring revenue streams to become an increasingly important component of the Company’s operating model as commercial deployments

Management believes the recurring nature of SaaS and maintenance revenue may provide greater long-term revenue visibility and operating

leverage as the installed base of Smart Store units grows.

The Company is continuing to build its commercialization and deployment infrastructure to support the anticipated expansion of Smart Store

Through its subsidiaries, the Company manages manufacturing, assembly, installation, software development, maintenance, and

support operations associated with its Smart Store platform.

Management believes the Company’s operational structure is designed

to support future scaling of deployments across both Company-owned and customer-operated locations.

As commercialization efforts continue, the Company expects scaling activities to include increased manufacturing capacity, inventory procurement,

deployment logistics, installation coordination, software support, and field maintenance operations.

The Company’s ability to expand

deployments remains dependent on several factors, including available capital resources, supply chain conditions, customer demand, site

readiness, and operational execution.

Management believes the Company’s current investments in inventory, infrastructure, software, and operational capabilities position

the Company to support future growth and broader commercial rollout initiatives.

The Company believes that with its use of advanced sensors, artificial intelligence, and robotics, VenHub is designed to ensure that customers will always have access to products with a few taps on their smartphones.

From scanning and purchasing products to bagging and delivering them, VenHub’s robots will be able to take care of everything in a seamless and efficient manner.

The store’s artificial intelligence algorithm will be able to keep track of customer preferences, allowing it to tailor its offering to meet individual customer’s tastes and preferences.

The Company has four subsidiaries:

VenHub, LLC to manage manufacturing, assembly and installation of units.

VenHub, Services LLC to provide software-as-a-service (SaaS) and ongoing

maintenance services.

VenHub IP, LLC to hold and manage the Company’s intellectual

VenHub, Services LLC to provide software-as-a-service (SaaS) and ongoing maintenance services.

VenHub IP, LLC to hold and manage the Company’s intellectual property.

VenHub Stores LLC, to manage all Company owned stores.

On January 30, 2026, the Company commenced trading

under the ticker symbol “VHUB” on the NASDAQ Global Market.

The Company currently has four full time employees

and over 40 independent contractors.

The Company will be converting the majority of independent contractors to full time employees throughout

the rest of 2026 using a Professional Employment Organization “PEO”.

By reducing the need for employees, VenHub

offers store owners labor cost savings, paving the way for potential increased profits.

Leveraging sensors, artificial intelligence,

and robotics, VenHub promises a shopping adventure that is not only seamless but also deeply personal.

With a tap of a smartphone,

and let VenHub’s robots whisk you through a journey, from scanning and purchasing products to bagging and delivering them with

planned precision.

As described in “Business of VenHub and Certain Information About VenHub,” the Company’s Smart

Stores are delivered as fully functional physical autonomous retail units capable of performing core physical and mechanical robotic

operations using embedded software installed at deployment.

SaaS activation is not required for the Smart Store to perform these

core physical functions and is addressed separately pursuant to distinct SaaS agreements as the Company transitions to scaled

commercial operations.

On January 30, 2026, the Company commenced trading under the ticker symbol “VHUB” on the NASDAQ Global Market.

The Company currently has twenty seven full time employees and over 20 independent contractors.

The Company will be converting the rest of the independent contractors to full time employees throughout the rest of 2026 using a Professional Employment Organization “PEO”.

By reducing the need for employees, VenHub offers store owners labor cost savings, paving the way for potential increased profits.

Leveraging sensors, artificial intelligence, and robotics, VenHub promises a shopping adventure that is not only seamless but also deeply personal.

With a tap of a smartphone, and let VenHub’s robots whisk you through a journey, from scanning and purchasing products to bagging and delivering them with planned precision.

As described in “Business of VenHub and Certain Information About VenHub,” the Company’s Smart Stores are delivered as fully functional physical autonomous retail units capable of performing core physical and mechanical robotic operations using embedded software installed at deployment.

SaaS activation is not required for the Smart Store to perform these core physical functions and is addressed separately pursuant to distinct SaaS agreements as the Company transitions to scaled commercial operations.

The Company is in the initial deployment phase of its Smart Store platform.

While customer agreements contemplate that purchasers will subscribe to the Company’s cloud-based SaaS platform, the enhanced SaaS

functionality has not yet been activated for customer use.

For early deployments, the Company has implemented an introductory concession

under which SaaS subscription fees may be waived for up to twelve months.

While customer agreements contemplate that purchasers will subscribe to the Company’s cloud-based SaaS platform, the enhanced SaaS functionality has not yet been activated for customer use.

For early deployments, the Company has implemented an introductory concession under which SaaS subscription fees may be waived for up to twelve months.

Accordingly, no SaaS revenue has been recognized to date.

As of the date of this filing, none of the Company’s deployed

Smart Stores have software-as-a-service (“SaaS”) functionality activated, and the Company does not currently provide analytics,

dashboards, reporting tools, or other operator-facing software to store owners or operators.

Any mobile application functionality is limited

to consumer product browsing, ordering, and checkout, is provided free of charge to customers, and is not part of the Company’s

SaaS platform.

The Company expects to introduce customer-accessible and operator-accessible SaaS functionality in future Smart Store versions

under separate commercial terms.

As of the date of this filing, the Company has deployed five (5) Smart

Stores, and none of these stores have SaaS functionality activated.

Accordingly, five of five (5 of 5), or 100%, of the Company’s

deployed Smart Stores are currently operating without SaaS activation.

As of March 31, 2026, the Company has six Smart Store units under contract for planned deployment in Las Vegas, Nevada during 2026.

payments received in connection with these contracts are recorded as deferred revenue on the consolidated balance sheet.

be recognized as the related performance obligations are satisfied in accordance with ASC 606.

In addition to existing contracted deployments, the Company is engaged in ongoing discussions with multiple casino and hospitality operators

in Las Vegas regarding the potential deployment of Smart Store units at their respective properties.

Management believes these discussions

reflect growing interest in autonomous retail solutions within high-traffic entertainment and hospitality venues.

While no assurances

can be provided that these discussions will result in executed agreements or future deployments, the Company views these opportunities

as part of its broader pipeline of prospective commercial locations and future growth initiatives.

A typical sales cycle for the Company’s

Smart Store deployments ranges from approximately two to six months, depending on the customer type, site readiness, permitting requirements,

and customization needs.

The sales process generally begins with initial customer outreach, demonstrations, and evaluation of deployment

opportunities, followed by commercial negotiations, site selection, and execution of purchase agreements.

Following contract execution, customers typically

provide an advance deposit to secure production scheduling and deployment timelines.

The Company then proceeds through site planning,

permitting, manufacturing customization, logistics coordination, installation, and commissioning of the Smart Store.

Timing can vary depending

on local permitting processes, utility readiness, and customer-specific integration requirements.

For enterprise customers, including casinos, transportation

hubs, municipalities, and hospitality venues, the sales cycle may be longer due to internal approval processes, compliance reviews, and

coordination with multiple stakeholders.

Conversely, standardized deployments for repeat customers or existing partners may result in

shorter implementation timelines.

Management believes that as the Company expands

operational deployments, establishes repeat customer relationships, and further standardizes manufacturing and installation processes,

overall deployment timelines and sales conversion cycles may improve over time.

The VenHub was first displayed publicly on October 25, 2023, in

Pasadena at the unveiling of its Alpha Smart Store with approximately 150 attendees.

The Company has since launched a full assembly production

facility in Las Vegas, Nevada to meet the market demand.

At the core of VenHub will be an intelligent algorithm that understands

your unique preferences, by tracking customer tastes and curating a selection that caters specifically to the customer.

VenHub aims to revolutionize the way people shop for their daily necessities,

its vision is to create a world where shopping is effortless, convenient and accessible.

The Company sold its first two stores in the first quarter of 2025,

with locations in North Hollywood, and Glendale, California respectively.

In the second quarter VenHub opened its Company owned flagship

store at Los Angeles Airport (LAX) In the third quarter the Company sold a store which opened in Hollywood, CA.

VenHub deployed a Company

owned store at Union Station Los Angeles during the fourth quarter of 2025.

The Company’s strategy is focused on scaling production and developing

recurring revenue streams through SaaS and maintenance services, which are expected to be monetized in future periods.

As of the date of this filing, none of the Company’s deployed Smart Stores have software-as-a-service (“SaaS”) functionality activated, and the Company does not currently provide analytics, dashboards, reporting tools, or other operator-facing software to store owners or operators.

Any mobile application functionality is limited to consumer product browsing, ordering, and checkout, is provided free of charge to customers, and is not part of the Company’s SaaS platform.

The Company expects to introduce customer-accessible and operator-accessible SaaS functionality in future Smart Store versions under separate commercial terms.

As of the date of this filing, the Company has deployed five (5) Smart Stores, and none of these stores have SaaS functionality activated.

Accordingly, five of five (5 of 5), or 100%, of the Company’s deployed Smart Stores are currently operating without SaaS activation.

The VenHub was first displayed publicly on October 25, 2023, in Pasadena at the unveiling of its Alpha Smart Store with approximately 150 attendees.

The Company has since launched a full assembly production facility in Las Vegas, Nevada to meet the market demand.

At the core of VenHub will be an intelligent algorithm that understands your unique preferences, by tracking customer tastes and curating a selection that caters specifically to the customer.

VenHub aims to revolutionize the way people shop for their daily necessities, its vision is to create a world where shopping is effortless, convenient and accessible.

The Company sold its first two stores in the first quarter of 2025, with locations in North Hollywood, and Glendale, California respectively.

In the second quarter VenHub opened its Company owned flagship store at Los Angeles Airport (LAX) In the third quarter the Company sold a store which opened in Hollywood, CA.

VenHub deployed a Company owned store at Union Station Los Angeles during the fourth quarter of 2025.

The Company’s strategy is focused on scaling production and developing recurring revenue streams through SaaS and maintenance services, which are expected to be monetized in future periods.

Key Factors Affecting Our Performance

Our Company has limited operating history.

The Company was formed as

a corporation in 2023.

We have limited established business operations, and it is currently unclear, if any, of our current and intended

plans may come into fruition and, if they do, which ones will be a success.

To date, the Company has incurred net losses and has generated

limited revenue.

There is no assurance that the Company will ever be able to establish successful business operations, become profitable

or generate sufficient revenues to operate our business or pay dividends.

Defects, failures or security breaches in and inadequate upgrades of,

or changes to, our vending machines and its accompanying software could harm our business.

The operation of our business depends on sophisticated

software, hardware, computer networking and communication services that may contain undetected errors or may be subject to failures or

complications.

The Company was formed as a corporation in 2023.

We have limited established business operations, and it is currently unclear, if any, of our current and intended plans may come into fruition and, if they do, which ones will be a success.

To date, the Company has incurred net losses and has generated limited revenue.

There is no assurance that the Company will ever be able to establish successful business operations, become profitable or generate sufficient revenues to operate our business or pay dividends.

Defects, failures or security breaches in and inadequate upgrades of, or changes to, our vending machines and its accompanying software could harm our business.

The operation of our business depends on sophisticated software, hardware, computer networking and communication services that may contain undetected errors or may be subject to failures or complications.

These errors, failures or complications may arise particularly when new, changed or enhanced products or services are added.

Future upgrades, improvements or changes that may be necessary to expand and maintain our business could result in delays or disruptions

or may not be timely or appropriately made, any of which could seriously harm our operations.

Further, certain aspects of the operating

systems relating to our business are provided by third parties, including telecommunications.

Accordingly, the effectiveness of these

operating systems is, to a certain degree, dependent on the actions and decisions of third parties over whom we may have limited control.

The Company depends on key personnel and faces challenges recruiting

needed personnel.

Future upgrades, improvements or changes that may be necessary to expand and maintain our business could result in delays or disruptions or may not be timely or appropriately made, any of which could seriously harm our operations.

Further, certain aspects of the operating systems relating to our business are provided by third parties, including telecommunications.

Accordingly, the effectiveness of these operating systems is, to a certain degree, dependent on the actions and decisions of third parties over whom we may have limited control.

The Company depends on key personnel and faces challenges recruiting needed personnel.

The Company’s future success depends on the efforts of a small number of key personnel.

In addition, due to its

limited financial resources and the specialized expertise required, it may not be able to recruit the individuals needed for its business

There can be no assurance that the Company will be successful in attracting and retaining the personnel the Company requires to

operate and be innovative.

Our revenue to date has been derived primarily from the sale of Smart

Stores and product sales in our Company owned stores.

Revenue from Smart Store sales is recognized when control of the unit transfers

to the customer, generally upon delivery.

The revenue from product sales (items sold through the VenHub store) is recognized when control

of the product transfers to the end customer, which generally occurs at the point of sale when the customer completes the transaction

and the product is dispensed from the Smart Store.

For our initial Smart Store deployments, the Company has granted a

temporary commercial waiver of SaaS consideration for up to twelve (12) months for initial deployments.

During this period, the Company

does not provide the enhanced cloud-based functionality contemplated by the agreement.

In addition, due to its limited financial resources and the specialized expertise required, it may not be able to recruit the individuals needed for its business needs.

There can be no assurance that the Company will be successful in attracting and retaining the personnel the Company requires to operate and be innovative.

Our revenue to date has been derived primarily from the sale of Smart Stores and product sales in our Company owned stores.

Revenue from Smart Store sales is recognized when control of the unit transfers to the customer, generally upon delivery.

The revenue from product sales (items sold through the VenHub store) is recognized when control of the product transfers to the end customer, which generally occurs at the point of sale when the customer completes the transaction and the product is dispensed from the Smart Store.

For our initial Smart Store deployments, the Company has granted a temporary commercial waiver of SaaS consideration for up to twelve (12) months for initial deployments.

During this period, the Company does not provide the enhanced cloud-based functionality contemplated by the agreement.

This introductory waiver applies only to SaaS services.

For example, during the year ended December 31, 2025, the Company entered into SaaS agreements in connection with the North Hollywood

and Glendale Smart Stores.

While these agreements were executed, the transaction price allocated to SaaS was zero because the Company

elected not to provide such services as part of its early commercialization strategy.

As a result, no revenue related to SaaS or maintenance services has

been recognized for the periods presented.

When implemented, SaaS revenue will be recognized ratably over the subscription term, typically

one year, and maintenance revenue will be recognized over the contract period.

We believe these services will represent a growing and

recurring component of our revenue model in future periods.

SaaS activation is expected to occur in phases as integrations and deployment configurations are completed

For example, during the year ended December 31, 2025, the Company entered into SaaS agreements in connection with the North Hollywood and Glendale Smart Stores.

While these agreements were executed, the transaction price allocated to SaaS was zero because the Company elected not to provide such services as part of its early commercialization strategy.

As a result, no revenue related to SaaS or maintenance services has been recognized for the periods presented.

When implemented, SaaS revenue will be recognized ratably over the subscription term, typically one year, and maintenance revenue will be recognized over the contract period.

We believe these services will represent a growing and recurring component of our revenue model in future periods.

Introductory SaaS Concession

To support early customer adoption and refine the performance of initial

deployments, the Company implemented an introductory concession under which customers receive up to twelve months of SaaS access

at no charge.

During this period, the enhanced cloud-based SaaS functionality has not been activated, and therefore no SaaS revenue has

been recognized.

To support early customer adoption and refine the performance of initial deployments, the Company implemented an introductory concession under which customers receive up to twelve months of SaaS access at no charge.

During this period, the enhanced cloud-based SaaS functionality has not been activated, and therefore no SaaS revenue has been recognized.

The introductory waiver applies only to SaaS services.

Because SaaS subscription fees are waived during the introductory

period, the transaction price allocated to SaaS is $0 for the periods presented, and all consideration is allocated to the Smart

Store hardware in accordance with ASC 606-10-32-28.

Maintenance services must be contracted separately and were not contracted for in

the periods presented.

The Company evaluated its revenue arrangements in accordance with ASC

606-10-25-19 through 25-22 and determined that Smart Store hardware, SaaS services, and maintenance services are separate performance

The Smart Store is fully functional upon delivery without SaaS activation, the SaaS platform does not significantly modify

or customize the hardware, and the promises are not highly interdependent or interrelated.

As a result, Smart Store revenue is recognized

at a point in time, while SaaS and maintenance revenues, once activated or contracted, will be recognized over time.

For product sales,

revenue is typically recognized at the point in time when control is transferred, which generally occurs upon shipment or delivery, depending

on the terms of the contract.

Because SaaS subscription fees are waived during the introductory period, the transaction price allocated to SaaS is $0 for the periods presented, and all consideration is allocated to the Smart Store hardware in accordance with ASC 606-10-32-28.

Maintenance services must be contracted separately and were not contracted for in the periods presented.

The Company evaluated its revenue arrangements in accordance with ASC 606-10-25-19 through 25-22 and determined that Smart Store hardware, SaaS services, and maintenance services are separate performance obligations.

The Smart Store is fully functional upon delivery without SaaS activation, the SaaS platform does not significantly modify or customize the hardware, and the promises are not highly interdependent or interrelated.

As a result, Smart Store revenue is recognized at a point in time, while SaaS and maintenance revenues, once activated or contracted, will be recognized over time.

For product sales, revenue is typically recognized at the point in time when control is transferred, which generally occurs upon shipment or delivery, depending on the terms of the contract.

Going Concern

As of March 31, 2026, the Company has sold three

stores and is operating two Company owned stores which were operational on June 6, 2025 and November 4, 2025.

Since its inception, the

Company has experienced recurring losses and, as of March 31, 2026, reported an accumulated deficit of $98,777,720 and negative cash flows

from operating activities for the three months then ended.

These matters raise substantial doubt about the Company’s ability to

continue as a going concern.

During the next twelve months, the Company intends to fund its operations with funds from revenue producing

activities by fulfilling the pre order list along with exploring both additional equity and debt financing.

If the Company cannot secure

additional short-term capital, it may cease operations.

These financial statements and related notes thereto do not include any adjustments

that might result from these uncertainties.

As of June 30, 2026, the Company has sold three stores and is operating two Company owned stores which were operational on June 6, 2025 and November 4, 2025.

Since its inception, the Company has experienced recurring losses and, as of June 30, 2026, reported an accumulated deficit of $109,267,588 and negative cash flows from operating activities for the six months then ended.

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

As the Company continues to commercialize its Smart Stores, it also expects to generate revenue from direct Smart Store sales and, over time, recurring SaaS and related service revenue.

The Company expects its reliance on external financing to decrease as revenue from Smart Store sales and recurring services increases.

If the Company cannot secure sufficient additional capital or generate sufficient revenue, it may be required to reduce or cease operations.

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the

notes to our consolidated financial statements.

Those material accounting estimates that we believe are the most critical to an investor’s

understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of

our financial position and results of operations and require the application of significant judgment by our management to determine the

appropriate assumptions to be used in the determination of certain estimates.

Inventories are stated at the lower of cost or estimated realizable

Our significant accounting policies are more fully described in the notes to our consolidated financial statements.

Those material accounting estimates that we believe are the most critical to an investor’s understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates.

Inventories are stated at the lower of cost or estimated realizable value.

The Company determines the cost of inventory using the first-in, first-out, or FIFO, method.

The Company capitalizes inventory

costs associated with the Company’s product based on management’s judgment, future commercialization is considered probable,

and the future economic benefit is expected to be realized;

otherwise, such costs are expensed as research and development.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts (“ASC

606”) using the 5 step process:

1) Identify the contract with

2) Identify the performance obligations

in the contract.

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts (“ASC 606”) using the 5 step process:

1) Identify the contract with a customer.

2) Identify the performance obligations in the contract.

3) Determine the transaction price.

4) Allocate the transaction price.

5) Recognize revenue when the

entity satisfies a performance obligation.

The Company’s primary sources of revenue are from the sale of

Smart Stores, product sales at the Company owned stores and, once fully commercialized, recurring subscription fees for its SaaS platform

and related maintenance and support services.

5) Recognize revenue when the entity satisfies a performance obligation.

The Company’s primary sources of revenue are from the sale of Smart Stores, product sales at the Company owned stores and, once fully commercialized, recurring subscription fees for its SaaS platform and related maintenance and support services.

Property and Equipment

Property and equipment is recorded at cost and

consists primarily of robotics systems, store structures, and related technology infrastructure.

Expenditures for renewals and improvements

that significantly add to the productive capacity or extend the useful life of an asset are capitalized.

Expenditures for maintenance

and repairs are expensed as incurred.

When equipment is retired or sold, the cost and related accumulated depreciation are eliminated

from the balance sheet accounts and the resultant gain or loss is reflected in income.

As of March 31, 2026, the Company had $1,276,439

of property and equipment, net.

Property and equipment is recorded at cost and consists primarily of robotics systems, store structures, and related technology infrastructure.

Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized.

Expenditures for maintenance and repairs are expensed as incurred.

When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the balance sheet accounts and the resultant gain or loss is reflected in income.

As of June 30, 2026, the Company had $1,343,264 of property and equipment, net.

The Company had $1,275,078 of property and equipment, net at December 31, 2025.

Depreciation is provided using the straight-line

method, based on useful lives of the assets, which the Company estimates is 5-7 years.

The Company’s property and equipment is comprised

of machinery and equipment and leasehold improvements whose useful life is the lesser of the remaining lease term or estimated useful

The Company reviews the carrying value of property

and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from

the estimated future cash flows expected to result from its use and eventual disposition.

In cases where undiscounted expected future

cash flows are less than the carrying value, an impairment loss is recognized as equal to an amount by which the carrying value exceeds

the fair value of assets.

The factors considered by management in performing this assessment include current operating results, trends

and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors.

The Company had no impairment as of March 31, 2026.

The Company capitalizes the costs of constructing and preparing company-owned

retail stores and display centers for their intended use.

Capitalized costs include expenditures directly attributable to the acquisition,

construction, and development of store locations, such as leasehold improvements, construction costs, architectural and design fees, furniture,

fixtures, and equipment.

Depreciation is provided using the straight-line method, based on useful lives of the assets, which the Company estimates is 5-7 years.

The Company’s property and equipment is comprised of machinery and equipment and leasehold improvements whose useful life is the lesser of the remaining lease term or estimated useful life.

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized as equal to an amount by which the carrying value exceeds the fair value of assets.

The Company had no impairment as of June 30, 2026.

The Company capitalizes the costs of constructing and preparing company-owned retail stores and display centers for their intended use.

Capitalized costs include expenditures directly attributable to the acquisition, construction, and development of store locations, such as leasehold improvements, construction costs, architectural and design fees, furniture, fixtures, and equipment.

Internal payroll and related costs that are directly associated with store development activities are also capitalized.

Once a store or display is placed into service, the assets are depreciated

on a straight-line basis over their estimated useful lives, which generally range from five to seven years for furniture, fixtures, and

equipment, and over the shorter of the useful life or lease term for leasehold improvements.

Routine maintenance and repair costs are

expensed as incurred.

If indicators of impairment are present, the Company evaluates company-owned

stores or display centers for recoverability by comparing the carrying amount of the store assets to the estimated future undiscounted

cash flows expected to be generated.

If the carrying value exceeds expected cash flows, an impairment charge is recognized equal to the

amount by which the carrying value exceeds fair value.

Once a store or display is placed into service, the assets are depreciated on a straight-line basis over their estimated useful lives, which generally range from five to seven years for furniture, fixtures, and equipment, and over the shorter of the useful life or lease term for leasehold improvements.

Routine maintenance and repair costs are expensed as incurred.

If indicators of impairment are present, the Company evaluates company-owned stores or display centers for recoverability by comparing the carrying amount of the store assets to the estimated future undiscounted cash flows expected to be generated.

If the carrying value exceeds expected cash flows, an impairment charge is recognized equal to the amount by which the carrying value exceeds fair value.

Stock Based Compensation

The Company recognizes as compensation expense all share-based payment

awards made to employees, directors, and consultants including grants of stock, stock options and warrants, based on estimated fair values.

Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant and is recognized

over the service period.

The Company recognizes as compensation expense all share-based payment awards made to employees, directors, and consultants including grants of stock, stock options and warrants, based on estimated fair values.

Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant and is recognized over the service period.

Key Components of Results of Operations

For the three months ended March 31, 2026 and 2025

For the three months ended June 30, 2026 and 2025

Revenues and cost of goods sold

There was $67,836 of revenue and $64,147 in cost

of goods sold for the three months ended March 31, 2026, all relating to product sales and costs of goods sold from our Company owned

stores For the three months ended March 31, 2025, we had $500,000 of revenue and $323,388 of cost of revenue, from the sale of our first

two smart stores.

The decrease in revenue was primarily attributable to the timing of the Company’s Smart Store deployments.

During the three months

ended March 31, 2025, the Company recognized revenue related to the delivery of Smart Store units to customers.

In contrast, during the

three months ended March 31, 2026, the Company had not yet commenced delivery of Smart Store units under new customer contracts, and therefore

did not recognize comparable store sale revenue during the period.

The Company’s revenue model for Smart Store sales is based on the transfer of control of the store to the customer, which generally

occurs upon delivery and installation.

As a result, revenue is inherently subject to period-to-period fluctuations based on the timing

of store deliveries, rather than consistent recognition over time.

While the Company continues to build its pipeline of customer orders and has received advance payments reflected as deferred revenue on

the balance sheet, revenue will not be recognized until the related performance obligations are satisfied through the delivery of Smart

The Company expects revenue to increase in future

periods as it begins fulfilling its existing backlog of customer orders and continues to scale its production and deployment capabilities.

However, the timing of such revenue recognition will depend on manufacturing, installation schedules, and customer readiness.

During the quarter ended March 31, 2026, the Company adjusted pricing across select product categories to improve

transaction volume and customer engagement as part of ongoing optimization of its automated retail model.

General and administrative expenses

For the year three months ended March 31, 2026

Our total operating expenses for the three months

ended March 31, 2026 were $4,463,355.

This was comprised of $1,271,177 in share-based compensation, $841,500 in contractor expense, $640,941

in advertising, $482,500 in accrued compensation, $373,069 in legal and professional expense, $316,279 in travel, $173,529 in rent, $110,301

in dues and subscriptions, $88,715 in research and development, $82,513 in insurance, $68,764 in depreciation and amortization and $14,067

in miscellaneous expense.

We incurred $12,149,544 in other expense for the three months ended

March 31, 2026 consisting of $11,217,349 in interest expense and $932,195 of change in fair value of convertible debt.

As a result of the foregoing, we had a net loss of $16,609,210 for

the three months ended March 31, 2026.

For the three months ended March 31, 2025

Our total operating expenses were $9,355,889.

This was comprised of $7,609,099 in non-cash share-based compensation, $465,806 in contractor expense, $335,521 in legal and professional

expense, $317,500 in accrued compensation, $301,355 in research and development, $140,988 in advertising related to our crowdfunding,

$70,130 in rent, $39,581 in travel, $11,575 in depreciation and $64,244 in miscellaneous expense.

We incurred $169,598 of other expense comprised of $108,033 in interest

expense and $61,565 in change of fair value of convertible debt for the period.

As a result of the foregoing, we had a net loss of $9,348,875 for the

three months ended March 31, 2025.

Results of Operations for the Three Months Ended March 31, 2026,

Compared to 2025

The following table summarizes our revenue, cost of goods sold and gross profit for the three months ended June 30, 2026 and 2025:

Three Months Ended

June 30, 2026 Three Months Ended

June 30, 2025 Increase

Sales $ 86,614 $ 13,615 $ 72,999

Cost of goods sold 299,244 6,829 292,415

Gross Profit $ (212,630 ) $ 6,786 $ 205,844

Gross Margin (245.5 )% 49.8 % (295.3 )%

Sales increased $72,99, or approximately 536%, to $86,614 for the three months ended June 30, 2026, compared to $13,615 for the same period in 2025.

The increase was primarily attributable to higher customer traffic and transaction volumes at the Company’s company-owned Smart Store locations.

During the quarter, the Company implemented promotional pricing initiatives designed to increase customer acquisition, drive sales volume and build brand awareness, which contributed to the increase in sales.

Cost of goods sold increased by $292,415 to $299,244 for the three months ended June 30, 2026, compared to $6,829 for the same period in 2025.

The increase primarily reflects the obsolete inventory write off of $232,134.

The Company reported a gross loss of $212,630 for the three months ended June 30, 2026, compared to a gross profit of $6,786 for the same period in 2025.

Gross margin was (245 .5%) compared to 49.8% in the prior-year period.

The decrease in gross margin was primarily attributable to obsolete inventory and also.

reflecting promotional pricing initiatives implemented during the quarter to increase customer traffic, accelerate sales growth and expand the Company’s customer base.

The following table summarizes our operating expenses for the three months ended June 30, 2026 and 2025:

Operating Expense Three Months Ended

June 30, 2026 Three Months Ended

June 30, 2025 Increase

Share-based compensation $ 7,095,550 $ 304,540 $ 6,791,010

Contractors 683,207 312,571 370,636

Compensation 482,500 317,500 165,000

Research and development 182,603 131,016 51,587

Wages 294,353 — 294,353

Legal and professional 233,980 184,050 49,930

Advertising 184,428 263,375 (78,947 )

Facilities lease and rent 180,750 109,908 70,842

Insurance 135,660 6,413 129,247

Regulatory and compliance 94,125 — 94,125

Travel 155,335 152,106 3,229

Depreciation 50,445 12,723 37,722

Utilities 36,730 22,901 13,829

Other operating expenses 161,263 82,043 79,220

Total Operating Expenses $ 9,970,929 $ 1,899,146 $ 8,071,783

Operating expenses increased $8.1 million, or 425.0%, to $10.0 million for the three months ended June 30, 2026, compared to $1.9 million for the three months ended June 30, 2025.

The increase was primarily attributable to higher non-cash share-based compensation expense, which increased $6.8 million, or 2,230.0%, reflecting equity awards granted to employees, executives, directors and service providers during the quarter as part of the Company's long-term compensation strategy.

Excluding share-based compensation, operating expenses increased $1.3 million, primarily reflecting continued investment in personnel, engineering, manufacturing, technology development and public company infrastructure to support the Company's continued growth and commercialization efforts.

Contractor expense increased $370,636, or 118.6%, primarily due to expanded engineering, software development, manufacturing support and operational consulting services required to support continued product development and Smart Store deployment activities.

Research and development expense increased $51,587, or 39.4%, reflecting continued investment in Smart Store technology, software enhancements, automation systems and product development initiatives.

Compensation expense increased $165,000, or 52.0%, reflecting higher executive compensation accruals during the quarter, while wage expense of $294,353 reflects the continued expansion of the Company's employee workforce to support manufacturing, engineering and corporate operations.

Insurance expense increased $129,247 due to expanded insurance coverage associated with the Company's growing operations and public company requirements.

Regulatory and compliance expense of $94,125 was incurred during the current period as the Company continued to invest in SEC reporting, Nasdaq compliance and corporate governance.

Facilities lease and rent expense increased $70,842, transportation expense increased $59,295, legal and professional expense increased $49,930, depreciation expense increased $37,722, and utilities expense increased $13,829, reflecting the Company's continued investment in manufacturing capacity, technology infrastructure and operational expansion.

Advertising expense decreased $78,947, or 30.0%, primarily because the prior-year period included significant crowdfunding and investor awareness campaigns that did not recur during the current quarter.

Other operating expenses increased $79,220, or 96.6%, primarily due to higher payroll-related costs, repairs and maintenance, office expenses and other administrative costs incurred to support the Company's expanding operations.

Other expense decreased to $306,309 for the three months ended June 30, 2026, compared to $18,637,279 for the three months ended June 30, 2025, representing a decrease of $18,330,970, or approximately 98.4%.

The decrease was primarily attributable to the absence of the significant $18.5 million settlement expense recognized during the three months ended June 30, 2025, which related to the resolution of legacy legal and financing matters and did not recur in the current-year period.

During the three months ended June 30, 2026, other expense consisted primarily of $269,000 of settlement expense associated with current-period matters and $578,062 of interest expense offset by $540,753 of change in fair value of convertible debt.

The significant reduction in other expense reflects the non-recurring nature of the large settlement recorded in the prior-year period and resulted in substantially lower non-operating expenses during the three months ended June 30, 2026.

As a result of the foregoing, the Company reported a net loss of $10.5 million for the three months ended June 30, 2026, compared to a net loss of $20.5 million for the three months ended June 30, 2025.

While operating expenses increased year over year, primarily due to non-cash share-based compensation and continued investment in the Company’s growth initiatives, the substantial reduction in settlement expense resulted in an overall improvement in net loss compared to the prior-year period.

For the six months ended June 30, 2026 and 2025

Revenues and cost of goods sold

The following table summarizes our revenue, cost of goods sold and gross profit for the six months ended June 30, 2026 and 2025:

Six Months Ended

June 30, 2026 Six Months Ended

June 30, 2025 Increase

Sales $ 154,450 $ 513,615 $ (359,165 )

Cost of goods sold 363,391 330,217 33,174

Gross Profit $ (208,941 ) $ 183,398 $ (392,339 )

Gross Margin (135,3 )% 35.7 % (171.0 )%

Sales decreased $359,165, or 69.9%, to $154,450 for the six months ended June 30, 2026, compared to $513,615 for the same period in 2025.

The decrease was primarily attributable to only product sales from the Company owned smart stores in 2026, and no revenue from smart store sales.

Cost of goods sold increased $33,174, or 10.0%, to $363,391 for the six months ended June 30, 2026, compared to $330,217 for the same period in 2025.

The increase primarily reflects the obsolete inventory write off of $232,134.

Gross loss was $208,941 for the six months ended June 30, 2026, compared to gross profit of $183,398 for the same period in 2025.

Gross margin was (135.3%) for the six months ended June 30, 2026, compared to 35.7% for the same period in 2025.

The decline in gross margin was primarily attributable to lower sales volumes combined with higher direct operating costs incurred to support the Company's company-owned Smart Store operations and the obsolete inventory.

As the Company continues to expand its commercial footprint, management expects gross margins to improve as revenues increase and fixed operating costs are leveraged over a larger sales base.

The following table summarizes our operating expenses for the six months ended June 30, 2026 and 2025:

Operating Expense

Driver of Change

Six Months Ended

June 30, 2026 Six Months Ended

June 30, 2025 Increase

Share-based compensation $ 8,366,728 $ 7,913,639 $ 453,089

Significant decrease due to large non-cash equity grants in prior year not recurring in current period

Contractor expense

Increased use of consultants and outsourced resources to support accounting, audit, and operational scaling

Increased marketing spend to support store launches and customer acquisition vs.

prior year crowdfunding campaign

Accrued compensation

Increase in personnel-related costs as operations expanded

Legal & professional

Ongoing legal, audit, and compliance costs associated with public company activities

Increased travel related to store deployment, operations, and business development

Expansion of physical footprint and store-related locations

Dues & subscriptions

New software, compliance, and subscription costs associated with scaling and public company requirements

Research & development

Decrease as focus shifted from development to commercialization

Increase due to public company insurance (including D&O coverage)

Depreciation & amortization

Increase due to capitalization and deployment of store-related assets

Miscellaneous

Reduction in non-recurring or general expenses from prior year

Contractors 1,407,942 778,377 629,565

Compensation 965,000 635,000 330,000

Advertising 825,369 404,363 421,006

Legal and professional 607,049 519,571 87,478

Research and development 271,318 432,371 (161,503 )

Travel 476,278 183,449 292,829

Wages 318,103 — 318,103

Facilities lease and rent 315,327 176,288 139,039

Insurance 218,173 12,912 205,261

Regulatory and compliance 188,250 — 188,250

Depreciation 96,095 24,298 71,797

Utilities 70,920 36,360 34,560

Other operating expenses 307,732 138,407 169,325

Total Operating Expenses $ 14,434,284 $ 11,255,035 $ 3,179,249

Driven primarily by lower share-based compensation

Other Expense

Driver of Change

Interest Expense

Increased financing activity and debt-related costs

Change in Fair Value of Convertible Debt

Significant valuation adjustments prior to repayment of convertible notes

Total Other Expense

Driven primarily by non-cash valuation adjustments

(16,609,210 )

Total operating expenses for the three months ended March 31, 2026

were $4,463,355, compared to $9,355,889 for the three months ended March 31, 2025, representing a decrease of $4,892,534, or 52%.

decrease was primarily attributable to a reduction in non-cash share-based compensation of $6,337,922, reflecting significant equity grants

in the prior year that did not recur in the current period.

This decrease was partially offset by increases in contractor expense, advertising,

accrued compensation, travel, and rent, driven by the Company’s continued operational expansion, including store deployments, increased

marketing efforts, and higher personnel-related costs.

Additional increases in dues and subscriptions and insurance expenses reflect costs

associated with scaling operations and operating as a public company.

Depreciation and amortization increased due to the capitalization

and deployment of store-related assets, while research and development expense decreased as the Company shifted its focus from development

activities toward commercialization.

Other expense for the three months ended March 31, 2026 was $12,149,544,

compared to $169,598 for the three months ended March 31, 2025, representing an increase of $11,979,946.

This increase was primarily driven

by $11,217,349 in interest expense related to the Company’s convertible debt financing, including amortization of debt discounts

and payment-in-kind interest, as well as a $932,195 increase in the change in fair value of convertible debt.

As a result of the foregoing, the Company reported a net loss of $16,609,210

for the three months ended March 31, 2026, compared to a net loss of $9,348,875 for the three months ended March 31, 2025.

in net loss was primarily driven by higher financing-related expenses, partially offset by a decrease in non-cash share-based compensation.

Operating expenses increased $3.2 million, or 28.2%, to $14.4 million for the six months ended June 30, 2026, compared to $11.3 million for the six months ended June 30, 2025.

The increase was primarily attributable to continued investment in personnel, engineering, manufacturing, technology development and public company infrastructure to support the Company's continued growth and commercialization efforts.

Share-based compensation expense increased $453,089, or 5.7%, reflecting equity awards granted to employees, executives, directors and service providers during the period as part of the Company's long-term compensation strategy.

Excluding share-based compensation, operating expenses increased $2.7 million, primarily reflecting increased investments in personnel, manufacturing, engineering, commercialization activities and public company infrastructure.

Contractor expense increased $629,565, or 80.9%, primarily due to expanded engineering, software development, manufacturing support and operational consulting services required to support continued product development and Smart Store deployment activities.

Advertising expense increased $421,006, or 104.1%, reflecting increased marketing initiatives, customer acquisition efforts, brand awareness campaigns and promotional activities during the period.

Compensation expense increased $330,000, or 52.0%, reflecting higher executive compensation accruals during the period, while wage expense of $318,103 reflects the continued expansion of the Company's employee workforce to support manufacturing, engineering and corporate operations.

Travel expense increased $292,829, or 159.6%, primarily due to increased business development, customer meetings, manufacturing activities and corporate travel associated with the Company's expanding operations.

Insurance expense increased $205,261 due to expanded insurance coverage associated with the Company's growing operations and public company requirements.

Regulatory and compliance expense of $188,250 was incurred during the current period as the Company continued to invest in SEC reporting, Nasdaq compliance and corporate governance.

Facilities lease and rent expense increased $139,039, legal and professional expense increased $87,478, depreciation expense increased $71,797, and utilities expense increased $34,560, reflecting the Company's continued investment in manufacturing capacity, technology infrastructure and operational expansion.

Research and development expense decreased $161,053, or 37.2%, primarily due to the completion of certain engineering and product development initiatives during the prior-year period and a shift in resources toward commercialization and deployment activities.

Other operating expenses increased $169,326, or 122.3%, primarily due to higher payroll-related costs, repairs and maintenance, office expenses and other administrative costs incurred to support the Company's expanding operations.

Other expense decreased to $12,455,853 for the six months ended June 30, 2026, compared to $18,806,877 for the six months ended June 30, 2025, representing a decrease of $6,351,024, or approximately 33.8%.

The decrease was primarily attributable to the absence of the significant $18.5 million settlement expense recognized during the six months ended June 30, 2025, which related to the resolution of legacy legal and financing matters and did not recur in the current-year period.

This decrease was partially offset by a significant increase in interest expense, which rose to $11.8 million during the six months ended June 30, 2026, from $228,033 in the prior-year period, primarily due to interest recognized on the Company's financing arrangements.

In addition, the Company recognized a $391,442 loss from the change in the fair value of its convertible note liability during the current-year period, compared to $65,414 in the prior-year period.

The Company also recorded $269,000 of settlement expense during the current-year period related to current-period matters.

Overall, the reduction in other expense reflects the non-recurring nature of the substantial settlement charge recognized in the prior-year period, partially offset by higher financing costs associated with the Company's capital structure during the six months ended June 30, 2026.

As a result of the foregoing, the Company reported a net loss of $27.1 million for the six months ended June 30, 2026, compared to a net loss of $29.9 million for the six months ended June 30, 2025.

While operating expenses increased year over year, primarily due to continued investment in the Company’s growth initiatives, including higher contractor, advertising, personnel and public company operating costs, as well as non-cash share-based compensation, the significant reduction in settlement expense partially offset by higher interest expense resulted in an overall improvement in net loss compared to the prior-year period.

Liquidity and Capital Resources

March 31, 2026

As of March 31, 2026 we had working capital of

$1,679,592 comprised of $5,796,468 in cash, $2,432,864 in inventory, $942,151 in prepaid expenses, $48,637 in sales tax receivable, $2,000

in security deposit – current offset by $1,356,333 in accounts payable and accrued expenses, $2,100,000 in loan payable –

related party, $2,013,606 in accrued payroll and compensation, $1,500,000 in deferred revenue, $351,335 in current operating lease liability,

$179,500 in customer deposits, $34,789 in interest payable - current and sales tax payable of $6,965.

Non-current assets included $1,276,439 in property

and equipment, net, $851,524 in right of use asset, and $153,046 in security deposits.

June 30, 2026

As of June 30, 2026 we had negative working capital of $1,770,578 comprised of $2,563,439 in cash, $2,447,132 in inventory, $724,663 in prepaid expenses, $48,637 in sales tax receivable, $2,000 in security deposit – current offset by $929,565 in accounts payable and accrued expenses, $2,100,000 in loan payable – related party, $2,457,647 in accrued payroll and compensation, $1,500,000 in deferred revenue, $326,247 in current operating lease liability, $162,000 in customer deposits, $72,366 in interest payable - current and sales tax payable of $8,624.

Non-current assets included $1,343,264 in property and equipment, net, $844,867 in right of use asset, and $143,667 in security deposits.

Non-current liabilities consisted of $614,091 in right of use liability.

December 31, 2025

At December 31, 2025, we had negative working capital of $9,192,737

comprised of $89,634 in cash, $1,021,947 in inventory, and $248,032 in prepaid expenses $2,000 in security deposit - current, offset by

$4,576,949 in convertible debt at fair value, $2,114,487 in accrued payroll and compensation, $1,500,000 in deferred revenue relating

to down payments for pre orders, $1,000,000 in loan payable – related party, $716,329 in accounts payable and accrued expenses,

$346,953 in current operating lease liability, $203,645 in customer deposits and $89,148 in interest payable and $6,839 in sales tax payable.

Non-current assets included $1,275,078 in property and equipment — net,

$907,705 in right of use asset, and $79,566 in security deposits.

Non-current liabilities consisted of $2,550,930 in promissory note,

$706,441 in right of use liability and $131,549 in interest payable.

For the three months ended March 31, 2026

We used $7,512,685 of cash in operating activities which represented

our net loss from continuing operations of $16,609,210 including $11,300,000 in non-cash interest expense related to note extension, $1,271,177 in share

based compensation, $932,195 of change in fair value of convertible debt, $640,004 in accounts payable and accrued expenses, $56,181 of

change in operating right of use asset, $68,764 in depreciation and amortization expense, $126 in sales tax payable offset by $2,550,930

in settlement payment related to promissory note, $1,410,917 in inventory, $694,119 in prepaid expenses, $185,908 in interest payable, $100,881 in accrued payroll and

compensation, $82,905 of change in operating right of use liability, $73,480 in security deposit, $48,637 in sales tax receivable, and

$24,145 in customer deposits.

We used $70,124 of cash in investing activities relating to property

and equipment, net.

We generated $13,289,643 of cash from financing activities including

$18,865,000 in proceeds from warrant issuance, $1,100,000 in related party notes, $300,012 in proceeds from stock purchase agreements,

offset by $5,509,144 in repayment of convertible notes and $1,466,225 in payment of offering costs.

For the three months ended March 31, 2025

We used $1,354,246 of cash in operating activities which represented

our net loss from continuing operations of $9,348,875 including $7,609,099 in share-based compensation, $322,360 in inventory, $164,500

in accrued payroll and compensation, $108,033 in interest payable, $88,704 in deferred offering cost, $61,565 in unrealized loss on convertible

debt, $19,638 of change in operating right of use asset, $15,000 in security deposit, $11,308 in depreciation expense offset by $243,883

in accounts payable and accrued expenses, $115,900 in prepaid expenses, $44,795 of change in operating right of use liability and $1,000

in deferred revenue.

We had no investing activities for the three months ended March 31,

We generated $752,701 of cash from financing activities consisting

of $102,701 in proceeds from crowdfunding and $650,000 in proceeds from convertible debt, net.

On February 14, 2025 the Company executed five notes with five investors

for a combined $650,000.

At December 31, 2025, we had negative working capital of $9,192,737 comprised of $89,634 in cash, $1,021,947 in inventory, and $248,032 in prepaid expenses $2,000 in security deposit - current, offset by $4,576,949 in convertible debt at fair value, $2,114,487 in accrued payroll and compensation, $1,500,000 in deferred revenue relating to down payments for pre orders, $1,000,000 in loan payable – related party, $716,329 in accounts payable and accrued expenses, $346,953 in current operating lease liability, $203,645 in customer deposits and $89,148 in interest payable and $6,839 in sales tax payable.

Non-current assets included $1,275,078 in property and equipment — net, $907,705 in right of use asset, and $79,566 in security deposits.

Non-current liabilities consisted of $2,550,930 in promissory note, $706,441 in right of use liability and $131,549 in interest payable.

For the six months ended June 30, 2026

We used $10,605,330 of cash in operating activities, which was primarily attributable to our net loss of $27,099,078, adjusted for $11,300,000 of non-cash interest expense related to the extension of convertible notes, $8,366,728 in share-based compensation, $932,195 related to the change in fair value of convertible debt, $142,322 in depreciation and amortization expense, $343,160 in accrued payroll and compensation, $213,236 in accounts payable and accrued expenses and $62,838 of change in operating right-of-use assets, $1,785 in sales tax payable offset by $2,550,930 in settlement payments related to a promissory note, $1,425,185 in inventory, $476,631 in prepaid expenses, $148,331 in interest payable, $113,056 of change in operating lease liabilities, $64,101 in security deposits, $48,637 in sales tax receivable, and $41,645 in customer deposits.

We used $210,508 of cash in investing activities relating to purchases of property and equipment.

We generated $13,289,643 of cash from financing activities, including $18,865,000 in proceeds from warrant issuances, $1,100,000 in proceeds from related party notes and $300,012 in proceeds from stock purchase agreements, offset by $5,509,144 in repayments of convertible notes and $1,466,225 in payment of offering costs.

For the six months ended June 30, 2025

We used $1,552,968 of cash in operating activities which was primarily attributable to our net loss from continuing operations of $29,878,514 including $18,513,430 in settlement expense, $7,913,639 in share based compensation, $1,749,000 in deferred revenue, $685,072 of change in operating right of use liability, $404,000 in accrued payroll and compensation, $200,689 in interest payable, $65,414 of unrealized loss on convertible debt, $40,100 in sales tax payable, $27,952 in depreciation expense, offset by $741,398 of change in operating right of use asset, $179,095 in inventory, $150,272 in accounts payable and accrued expenses, $88,704 in deferred offering cost, $59,281 in prepaid expenses and $55,000 in security deposits.

We used $483,154 in investing activities for the six months ended June 30, 2025 relating to the assembly of both our LAX Metro flagship company owned store and our National Automatic Merchandising Association (NAMA) display store.

We generated $4,371,050 of cash from financing activities consisting of $3,500,000 in proceeds from warrant issuance, crowdfunding, $650,000 proceeds from convertible debt and $221,050 in proceeds from crowdfunding.

The Company currently expects external financing to remain its primary source of liquidity in the near term.

Management is pursuing additional capital through equity and debt financing, including investments from existing and new investors.

As commercialization progresses, the Company expects direct Smart Store sales and recurring SaaS and related service revenue to become increasingly significant sources of liquidity.

The Company's ability to reduce its reliance on external financing will depend on the timing and level of Smart Store sales, deployment activity and the commercialization of its recurring revenue offerings.

Future Outlook

We have historically

funded operations and development activities through a combination of debt, equity issuances, and, to a lesser extent, crowdfunding initiatives.

During the past year, we began focusing on both debt financing and equity-based capital resources.

This transition reflects both our strategic

objective of reducing leverage and the increasing availability of equity capital as investor appetite for robotics and artificial intelligence

companies continues to expand.

We expect this trend

to continue in connection with our planned direct listing.

The planned equity raise is reasonably likely to materially change the mix

of our capital resources by decreasing reliance on debt facilities and enhancing our equity capitalization.

We also anticipate that the

relative cost of capital will improve, as equity financing is expected to provide greater flexibility and reduce interest expense obligations

compared to prior debt arrangements.

While we may opportunistically

evaluate additional credit facilities in the future, we do not currently anticipate significant off-balance-sheet financing arrangements

or other alternative funding mechanisms that would materially alter our capital resource profile.

In October 2025, we entered into new employment agreements with our

Chief Executive Officer and our President, effective upon the effectiveness of this registration statement.

These agreements include annual

base salaries, potential cash bonuses, and equity-based awards tied to geographic expansion and performance milestones.

While the agreements

contemplate potential annual cash bonuses of up to $3.2 million in the aggregate, such bonuses are contingent on the availability of legally

distributable funds as defined under NRS 78.288, Board approval, and may be deferred or accrued until sufficient resources are available

in compliance with Nevada law.

We have historically funded our operations and development activities primarily through debt and equity financing and, to a lesser extent, crowdfunding initiatives.

In the near term, we expect to continue to rely primarily on capital raising activities to fund operations and execute our commercialization strategy.

We are pursuing additional equity and debt financing from existing and new investors.

As our commercialization efforts progress, we expect our sources of liquidity to evolve.

We anticipate that direct Smart Store sales will become an increasingly important source of operating cash flow, followed by recurring SaaS, maintenance and related service revenue as our installed customer base grows.

If these revenue streams develop as anticipated, we expect our relative reliance on external capital raising to decrease over time.

However, the timing and amount of these revenues remain uncertain, and we expect to require additional external financing until operating cash flows are sufficient to support our operations.

We expect this trend to continue in connection with our planned direct listing.

The planned equity raise is reasonably likely to materially change the mix of our capital resources by decreasing reliance on debt facilities and enhancing our equity capitalization.

We also anticipate that the relative cost of capital will improve, as equity financing is expected to provide greater flexibility and reduce interest expense obligations compared to prior debt arrangements.

While we may opportunistically evaluate additional credit facilities in the future, we do not currently anticipate significant off-balance-sheet financing arrangements or other alternative funding mechanisms that would materially alter our capital resource profile.

In October 2025, we entered into new employment agreements with our Chief Executive Officer and our President, effective upon the effectiveness of this registration statement.

These agreements include annual base salaries, potential cash bonuses, and equity-based awards tied to geographic expansion and performance milestones.

While the agreements contemplate potential annual cash bonuses of up to $3.2 million in the aggregate, such bonuses are contingent on the availability of legally distributable funds as defined under NRS 78.288, Board approval, and may be deferred or accrued until sufficient resources are available in compliance with Nevada law.

Accordingly, we have not accrued any amounts for such bonuses to date.

If payable in full, these cash bonuses could increase our annual compensation

expense and impact our liquidity.

However, because payment is conditional and may be deferred, the timing and extent of this impact cannot

be predicted with certainty.

We expect operating expenses to increase in future periods as we expand

deployments of our autonomous Smart Stores, invest in further product development, and build out the organizational infrastructure required

to support a scaled commercial business.

In particular, we anticipate growth in payroll and compensation, research and development, and

marketing expenses, partially offset by reduced reliance on share-based compensation compared to prior years.

We may also incur increased

legal and professional expenses in connection with our financing activities and as a result of our obligations as a public company.

In addition, the equity award provisions in these agreements could

result in the issuance of significant additional shares in the event that geographic expansion or performance milestones are achieved,

which could result in dilution to existing stockholders.

As of March 31, 2026, the Company had approximately $5.8 million in cash and cash equivalents compared to approximately $89 thousand as

of December 31, 2025.

The increase was primarily attributable to financing activities completed during the quarter, including proceeds

from warrant issuances, stock purchase agreements, and related party financing arrangements.

The Company continues to incur operating losses and negative operating cash flows as it advances commercialization, expands operational

infrastructure, and supports Smart Store deployment activities.

Management expects operating expenses to continue as the Company invests

in manufacturing, inventory procurement, software development, marketing, and deployment capabilities.

Management believes existing cash on hand, together with anticipated financing activities and future revenue-generating operations, will

support the Company’s near-term operating and deployment objectives.

However, the Company expects that additional capital may be

required to execute its broader long-term commercialization and scaling strategy.

If payable in full, these cash bonuses could increase our annual compensation expense and impact our liquidity.

However, because payment is conditional and may be deferred, the timing and extent of this impact cannot be predicted with certainty.

We expect operating expenses to increase in future periods as we expand deployments of our autonomous Smart Stores, invest in further product development, and build out the organizational infrastructure required to support a scaled commercial business.

In particular, we anticipate growth in payroll and compensation, research and development, and marketing expenses, partially offset by reduced reliance on share-based compensation compared to prior years.

We may also incur increased legal and professional expenses in connection with our financing activities and as a result of our obligations as a public company.

In addition, the equity award provisions in these agreements could result in the issuance of significant additional shares in the event that geographic expansion or performance milestones are achieved, which could result in dilution to existing stockholders.

As of June 30, 2026, we had $2,563,439 in cash.

We expect our operating cash requirements, capital expenditures, and contractual obligations including $929,565 in accounts payable and accrued expenses, $205,680 in lease payments, $72,366 in interest payable and $2,500,000 estimated in contractor and production payments will total $3,707,611 over the next 12 months.

Based on our current cash position and forecasted operating cash outflows, we will not have sufficient cash to fund these requirements.

We are pursuing additional financing through equity and debt issuances to fuel long term growth in meeting the demand for our stores.

Longer term, we anticipate ongoing funding needs to support growth and expansion.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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What changed 10-Q

Item 1. Financial Statements