ATPC 10-K & 10-Q changes, risk factors and insider trading

For the year ended December 31, 2024,2025, we purchased $335,494$365,840, $133,406 and $98,391$73,163 from twothree of our major suppliers, represented approximately 55.6%, 59.8% 20.3% and 17.5%11.1%, respectively, of our total purchases. Our business, financial condition and operating results depend on the continuous supply supply of products from our major suppliers and our continuous supplier-customer relationships with them. Our heavy reliance on our major suppliers suppliers for the supply of our products will have significant impact on our business and results of operation in the event of any shortage of, of, or delay in the supply.

We currently do not have long term supply agreements with our twothree largest suppliers for the year ended December 31, 2024,2025, and we typically make ad hoc purchases through submission of purchase order forms. There is no assurance that our major suppliers will continue to supply their products in the quantities and timeframes required by us to meet the needs of our customers or comply with their supply agreements with us. Our product supply may also be disrupted by potential labor disputes, strike action, natural disasters or other accidents, epidemic and pandemic affecting the supplier. If our major suppliers do not supply products to us in a timely manner or in sufficient quantities, our business, financial condition and operating results may be materially and adversely affected.

In connection with the audit of our consolidated financial statements as of December 31, 2024,2025, we identified twothree “material weaknesses”, and other control deficiencies including significant deficiencies in our internal control over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified related to the Company were: (i) insufficient full-time personnel with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions, address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP; (ii) lack of a functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures and lack of adequate policies and procedures in internal audit function to ensure that the Company’s policies and procedures have been carried out as planned.planned; and (iii) insufficient procedures and policies were in place to assess the credit risk and capabilities of the third-party manager prior to the investment decision.

Our total revenues decreasedincreased by approximately 7.6%15.2% from approximately $1.4 million for the year ended December 31, 2023 to approximately $1.3 million for the year ended December 31, 2024.2024 to approximately $1.5 million for the year ended December 31, 2025. Our gross profit decreasedincreased by approximately 18.9%10.4% from approximately $0.9$0.7 million for the year ended December 31, 20232024 to approximately $0.7$0.8 million for the year ended December 31, 2024.2025.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar,dollar (“US$”), including Malaysian Ringgit and(“MYR” theor “RM”), Hong Kong Dollar.Dollars (“HK$”) and Chinese Yuan (“CNY”). Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against other currencies affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. We cannot assure you that fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies would not materially affect our financial results.

Negative developments in Malaysia’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. The Malaysian economy registered modest growth of approximately 5.1 %4.9% and 3.0%5.1% in December 31, 20242025 and December 31, 2023 2024, respectively, according to the Department of Statistics Malaysia. Although the overall Malaysian economic environment (in which we predominantly operate) appears to be positive, there can be no assurance that this will continue to prevail in the future. Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty.

We generated revenue of $1,524,262, which comprised of revenue from the Company’s network marketing business of $71,276 (approximately 4.7% of total revenue); revenue from the Company’s operations in the provision of complementary health therapies of $1,081,538 (approximately 71.0% of total revenue); $231,721 from operation in wellness and wellbeing lifestyle (approximately 15.2% of total revenue) and $139,727 from the operation in green energy (approximately 9.1% of total revenue) for the year ended December 31, 2025 as compared to revenue of $1,322,747, which comprised of revenue from the Company’s network marketing business of $137,050 (approximately 10.4% 10.4%of total revenue); revenue from the Company’s operations in the provision of complementary health therapies of $1,120,843 (approximately 84.7% 84.7%of total revenue); $22,091 (approximately 1.7% of total revenue) from skin care and healthcare products, a new revenue stream from the Company’s operations in wellness and wellbeing lifestyle and $42,763 (approximately 3.2% of total revenue) from the operation in green energy for the year ended December 31, 2024 as compared to revenue of $1,431,088, which the amount was mainly attributed from the Company’s network marketing business of $396,122 (approximately 27.7%); and $1,033,221 (approximately 72.2%) from the Company’s operations in the provision of complementary health therapies for the year ended December 31, 2023.2024.

Total revenue for the year ended December 31, 20242025 decreasedincreased by $108,341,$201,515, or approximately 7.6%15.2% from the year ended December 31, 2023.2024. Revenue from the Company’s network marketing business decreased significantly by $259,072,$65,774, or approximately 65.4%, whereas48.0%, the revenue from the provision of complementary health therapies increaseddecreased by $87,622,$39,305, or approximately 8.5%,3.5%, newwhereas revenue streams $22,091 from the Company’s operationsoperation in wellness and wellbeing lifestyle increased by $209,630 or approximately 948.9% and $42,763revenue from the operation in green energy.energy increased by $96,964 or approximately 226.7%. The decreased revenue revenue from the Company’s network marketing business due to limited product range available as compared to the previous years, it limited the potential development of this revenue stream. We did not offer as many categories of the health products in our network marketing marketing business during fiscal year 20242025 as compared to prior years due to the company strategically shifting the business focus from company’s company’s network marketing business to new revenue streams that can help restore growth and diversify income streams. During the year ended December 31, 2024, we launched new revenue streams from the Company’s operationsoperation in wellness and wellbeing lifestyle and venturedgreen into green energy industry bythat providingcan products,help technical knowledgerestore growth and solutionsdiversify forincome sustainabilitystreams. The revenue from operation in wellness and energywellbeing savings. However, thelifestyle increased of approximately $64,854 from new revenue streams was less than the significant decrease of revenue relateddue to the salescompany’s digital ofadvertisement existing productscampaign relatedand marketing activities to networkpromote marketingthe business.skin care and healthcare products. The revenue increasedecrease in provision of complementary health therapies business was due to the increase in public awareness about the importance of physical and mental health, more individual turned to complementarylower health therapiesrevenue generated from overseas customers as preventive care and wellnesscompared to maintain good health, prevent illness and promote overall well-being, more service orders were processed during the year ended December 31, 2024 compared with previous year, also led the increase of related products sold.years.

Gross profit for the year ended December 31, 20242025 amounted to $759,148,$838,270, represented a gross margin of approximately 57.4%,55.0%, as compared to $936,572$759,148 for the year ended December 31, 2023,2024, which was equivalent to a gross margin of approximately 65.4%.57.4%. The decrease in gross profit margin in year ended December 31, 20242025 was due to low gross profit margin in Company’s operations in wellness and wellbeing lifestyle and green energy.

The gross profit margin related to ourthe network marketing business was approximately 69.6%58.8% and 84.1% for the years ended December 31, 2024 and 2023,69.6%, respectively; the gross profit margin related to our provision of complementary heath therapies business was approximately 59.1% 55.1% and 58.5%,59.1%, respectively; the gross profit margin related to operations in wellness and wellbeing lifestyle 84.3% and 2.3%, respectively; and the gross profit margin related to the new revenue streams, Company’s operations in wellness and wellbeing lifestyle and green energy was approximately 2.3%3.4% and 2.9%2.9%, respectively,respectively; for the yearyears ended December 31, 2025 and 2024. In addition to that, there was $11,825 and $7,081 inventory write-downs; and $7,035 and $0 inventory write-off, respectively, during the yearyears ended December 31, 2024,2025 whereasand no inventory write-downs were recorded for the year ended December 31, 2023.2024.

Selling expenses for the year ended December 31, 20242025 amounted to $162,712$242,074 as compared to $629,003$162,712 for the year ended December 31, 2023,2024, aan significantincrease decrease of $466,291,$79,362, or approximately 74.1%.48.8%. The Company’s selling expenses typically comprise salaries and benefits expenses, credit card processing fees and promotional expenses. The significant decreaseincrease in selling expenses was due to the decreaseincrease in promotional expenses incurred in the operation in wellness and wellbeing lifestyle, the networkcompany launched digital advertisement campaign and marketing business.activities to promote the skin care and healthcare products.

Commission expenses were $34,905$73,691 and $88,132$34,905 for the years ended December 31, 20242025 and 2023,2024, respectively, representing a significant decreaseincrease of $53,227,$38,786, or approximately 60.4%.111.1%. The significant decreaseincrease in commission expenses was due to the decreaseincrease in revenue from the Company’soperation networkin marketingwellness business.and wellbeing lifestyle.

G&A expenses for the year ended December 31, 20242025 amounted to $3,134,874,$3,779,152, as compared to $2,366,016$3,134,874 for the year ended December 31, 2023,2024, representing an increase of $768,858,$644,278, or approximately 32.4%.20.6%. The Company’s G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses, depreciation expenses and provisionallowance for credit losses.loss. UponThe uplistedincrease in Nasdaqgeneral capital market, the Company incurred Nasdaq annual listing fees, and theadministrative Companyexpenses alsowas appointeddue two executive directors and three independent directors, which ledto the increase ofin executiveprofessional salaries for the year ended December 31, 2024 compared to previous year.fee.

For the year ended December 31, 2024,2025, we recorded an amount of $92,233$951,325 as other income, net as compared to $40,219$92,233 other income, net for the year ended December 31, 2023,2024, representing a significant change of $52,014.$859,092. The net other income of $951,325 incurred during the year ended December 31, 2025 comprised of other income, net of $113,807, interest income of $3,416, unrealized holding gain on marketable securities of $8,953, exchange gain, net of $826,149 and loss on non-marketable securities of $1,000. The net other income of $92,233 incurred during the year ended December 31, 2024 comprised of other income, net of $29,209, interest income of $67,930, unrealized holding loss on marketable securities of $5,018, gain on disposal of property and equipment of $112. The net other income of $40,219 incurred during the year ended December 31, 2023 comprised of other income, net of $5,724, interest income of $29,249, unrealized holding gain on marketable securities of $3,493, gain on disposal of property and equipment of $1,753. The significant change was due to the interest income from time deposit.

We incurred a net loss of 2,307,607 for the year ended December 31, 2025, as compared to $2,486,044 for the year ended December 31, 2024, a as compared to $2,109,935 for the year ended December 31, 2023, an increasedecrease of $376,109,$178,437, or approximately 17.8%,7.2%, predominately due to reasons as discussed above.

As of December 31, 2024,2025, we had working capital of $22,236,994 consisting of cash and cash in bank of $140,072 and no time deposits as compared to working capital of $1,656,571 consisting of cash and cash in bank of $240,243 and time deposits of $1,800,000 as compared to working capital of $$4,113,614December consisting31, 2024. The Company had a net loss of cash$2,307,607 for the year ended December 31, 2025 and cashaccumulated in bankdeficits of $494,771 and time deposits of $4,322,441$11,797,836 as of December 31, 2023.2025 Theas Companycompared had ato net loss of $2,486,044 for the year ended December 31, 2024 and accumulated deficits of $9,518,045 as of December December 31, 2024 as compared to net loss of $2,109,935 for the year ended December 31, 2023 and accumulated deficits of $7,047,571 as of December 31, 2023.2024.

Net cash used in operating activities for the year ended December 31, 20242025 was $2,726,215$2,413,422 and were mainly comprised of the net loss of $2,486,044,$2,307,607, unrealized holding gain on disposalmarketable securities of office$8,953, equipmentunrealized exchange gain of $112, the increase in accounts receivables of $28,295, the increase in inventories of $4,225, the increase in prepaid taxes $22,322,$825,706, the increase in prepayments and deposits of $434,447,$380,199, the increase in other receivables of $2,105, the decrease in accounts payables (related parties) of $5,107, the decrease in customer deposits of $7,340,$21,972, the payment of operating lease liabilities of $139,476, the$159,762, decrease inof otherincome tax payables (related parties)payable of $7,065.$3,573. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $57,340,$24,903, amortization of operating right-of-use assets of $139,867, $158,924, amortization of finance assets of $29,445, unrealized holding$44,151, loss on marketable non-marketable securities of $5,018,$1,000, allowance for expectedcredit credit loss of $98,705,$519,442, deferredinventory taxwrite expenseoff of $220,$7,035, inventory write-down of $7,081,$11,825, the decrease in accounts receivables of $32,132, decrease in amount due from related parties of $8,889,$162, the decrease in inventories of $3,348, the decrease in prepaid taxes $17,406, the decrease in other receivables of $2,489, the increase in accounts payables (related parties) of $44,657,$14,010, the increase in customer deposits of $58,581, the increase in other payables and accrued liabilities of $14,761$112,551 and the increase ofin other income taxpayables payable(related parties) of $4,340.$286,391.

Net cash used in operating activities for the year ended December 31, 20232024 was $2,001,823$2,726,215 and were mainly comprised of the net loss of $2,109,935,$2,486,044, the non-cash deferred tax benefit of $220, unrealized holding gain on marketable securities of $3,493, gain on disposal of office equipment of $1,753, the increase in inventories of $3,216,$112, the increase in accounts receivables of $53,641,$28,295, the increase in inventories of $4,225, the increase in prepaid taxes $22,322, the increase in prepayments and deposits of $34,532,$434,447, the decreaseincrease in other receivables of $8,961,$2,105, the decrease in accounts payables (related parties) of $5,107, the decrease in customer deposits of $248,299,$7,340, the payment of operating lease lease liabilities of $147,951,$139,476, the decrease ofin incomeother taxpayables payable(related parties) of $10,591.$7,065. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $75,982,$57,340, amortization of operating right-of-use assets of $147,212,$139,867, amortization provisionof finance assets of $29,445, unrealized holding loss on marketable securities of $5,018, allowance for credit losses loss of $29,955,$98,705, deferred tax expense of $220, inventory write-down of $7,081, decrease in prepaidamount taxesdue from related parties of $305,567,$8,889, increase in accounts payables (including related parties) of $38,456 and$44,657, the increase in other payables (including related parties) and accrued liabilities of $6,670.$14,761 and the increase of income tax payable of $4,340.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include allowance for inventories obsolescence, impairment of long-lived assets, allowance for deferred tax assets, allowance for credit loss, allowance for estimation of coupon redemption and the assumptions used in the valuation of the derivative financial instruments. Following are the methods and assumptions used in determining our estimates.

Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value. For the years ended December 31, 20242025 and 2023,2024, the Company recognize an inventory write-downs of $11,825 and $7,081; and inventory write-off of $7,035 and $0, respectively.

The Company conducts much of its business activities in Malaysia andMalaysia, Hong Kong and China and is subject to tax in each of these jurisdictions. Significant Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Allowance for expected credit loss

The Company estimates and records an allowance for its expected credit loss related to its accounts receivable. Credit losses are determined by Current Estimate of Expected Credit Losses model in accordance with Topic 326 – Financial Instruments – Credit Losses. For accounts receivable, the Company considers the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. For the years ended December 31, 20242025 and 2023,2024, the Company recognize an allowance for expected credit loss of $32,857$8,082 and $542,$32,857, respectively.

The Company offers various coupon programs to customers, which result in the potential redemption of coupons against future purchases. The estimation of coupon redemption requires assumptions. This estimate is based on historical redemption patterns, customer behaviourbehavior trends, and the terms and conditions of the coupon programs. Management considers factors such as the type of coupon, the period of validity that could influence redemption rates. The Company makes estimates about the likelihood and timing of coupon redemptions, which may vary based on changing customer behaviour behavior and economic conditions. If the actual redemption rate differs from the estimated rate, it could impact the redemption liability and related expenses in future periods. The allowance for coupon redemption is regularly reviewed and adjusted as more information becomes available to ensure that it reflects the expected redemption accurately.

OnThe July 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606). The core principle underlying the revenue recognition of this ASU allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized at a point in time for the Company’s sale of health and wellness products.

In November 2024, the The FASB issued ASU 2024-03 and ASU 2025-01 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement ExpensesExpenses, and Clarifying the Effective Date”. in November 2024 and January 2025, respectively. This ASUnew guidance requires disclosures of additional information of the nature of expenses included in the income statement as well as disclosures about specific expense categories in the notes to the financial statements. The requirements of the ASUnew guidance are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, which early adoption permitted. This updatenew guidance can be applied either retrospectively to any or all prior periods presented in the consolidated financial statements or prospectively to financial statements issued for reporting period after the effective date of this Update.new guidance. The Company is currently evaluating the effect of adopting this ASU.guidance.

Except for the above-mentioned pronouncements, there are no other new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows.

On November November 11, 2021, AATP LB formed an entity, DSY Wellness International Sdn. Bhd. (“DSY Wellness”) with an independent third party party which AATP LB owns 60% of the equity interest, to pursue the business of providing complementary health therapies. On June 11, 2026, AATP LB disposed its 60% equity interest in DSY Wellness to the same independent third party pursuant to the board resolution.

For the three months ended MarchJune 31,30, 2026 and 2025

We generated revenue of $273,658, which comprised revenue from the Company’s network marketing business of $12,332 (approximately 4.5% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $252,069 (approximately 92.1% of revenue); $9,257 from skin care and healthcare products (approximately 3.4% of revenue) and $0 from the operation in green energy (approximately 0% of revenue) for the three months ended March 31, 2026 as compared to $289,037,$13,693, which comprised revenue from the Company’s network marketing business of $26,547 $7,996 (approximately 9.2% 58.4% of revenue); and revenue from the Company’s operations in the provision of complementary health therapies of $252,246 (approximately 87.3% of revenue); $8,679$5,697 from skin care and healthcare products (approximately 3.0%41.6% of revenue) and $1,565no revenue from the operation in green energy for the three months ended June 30, 2026 as compared to $207,029, which comprised revenue from the Company’s network marketing business of $16,149 (approximately 7.8% of revenue); $55,446 from skin care and healthcare products (approximately 26.8% of revenue) and $135,434 from the operation in green energy (approximately 0.5%65.4% of revenue) for the three months ended MarchJune 31,30, 2025. Revenue from the Company’s network marketing business decreased by $14,215$8,153, or approximately 53.5%.50.5%. Revenue from the Company’s operations in the provision of complementary health therapies decreased by $177 or approximately 0.01%. Revenue from the Company’s operations in wellness and wellbeing lifestyle increaseddecreased by $578$49,749 or approximately 6.7%89.7% and the revenue from the operation in green energy decreased by $1,565$135,434 or approximately 100% to $0. Total revenue decreased significantly by $15,379$193,336 or approximately 5.3%.93.4%.

Cost of revenue for the three months ended MarchJune 31, 30, 2026 amounted to $114,249$1,923 as compared to $132,751$141,661 for the three months ended MarchJune 31, 30, 2025, representeda asignificant decrease of $18,502$139,738, or approximately 13.9%. 98.6%. The decrease was due to the decreasedeclined in cost of revenue from the Company’s network marketing business and the varying gross profit margins in the Company’s operations in thewellness provisionand ofwellbeing complementarylifestyle healthand therapies.operation in green energy.

Gross profit for the three months ended MarchJune 31, 30, 2026 amounted to $159,409,$11,770, represented a gross margin of 58.3%approximately 86.0% as compared to $156,286$65,368 for the three months ended MarchJune 31,30, 2025, equivalent to a gross margin of 54.1%.approximately 31.6%. The significant increase in gross margin was due to the varyingCompany’s typenetwork ofmarketing healthbusiness therapiescontribute offered,higher gross profit margin associatedas compared to withCompany’s theoperations provisionin ofwellness complementaryand healthwellbeing therapies.lifestyle and operation in green energy.

Our operating expenses consist of selling expenses, commission expenses and general and administrative expenses.expenses (as defined below). Total operating expenses were $562,745 for the three months ended June 30, 2026, decreased by $124,157 or approximately 18.1% from $686,902 for the three months ended June 30, 2025.

Selling expenses for the three months ended March 31,June 30, 2026 amounted to $37,149$30,315 as compared to $63,052$59,863 for the three months ended MarchJune 31,30, 2025, represented a decrease of $25,903$29,548, or approximately 41.1%, mainly due to the decrease in advertisement cost.49.4%. The Company’s selling expenses typically comprise of salaries and benefits expenses, credit card processing fees, advertisement and promotional expenses.

G&A expenses for the three months ended March 31,June 30, 2026 amounted to $794,712,$529,033, as compared to $805,693$611,020 for the three months ended MarchJune 31,30, 2025, represented a decrease of $10,981$81,987, or approximately 1.4%. The decrease in G&A expenses was mainly due to the decrease in company event and activities.13.4%. The Company’s G&A expenses typically comprise of salaries and benefits expenses, rental expenses, professional expenses, depreciation expenses and other expenses. The decrease in G&A expenses was mainly due fewer activities in the operation in wellness and wellbeing lifestyle.

Other Income Income,(Expenses), Net

For the three months ended MarchJune 31,30, 2026, wethe Company recorded an amount of $336,466$634,566 as net other income, net, as compared to $7,485$13,709 other income, net, for the three months ended MarchJune 31,30, 2025, represented aan significant increase of $408,492$620,857, or approximately 5,457.5%.4,528.8%.

The net other income of $336,466$634,566 recordedgenerated during the three months ended MarchJune 31,30, 2026 comprised of other incomeincome, net of $1,776,$3,113, unrealized holding gainloss on marketable securities of $12,232$15,387, gain on disposal of assets of $1,813 and foreign currency exchange gain of $322,459.$645,027.

The net other income of $7,485$13,709 recordedgenerated during the three months ended MarchJune 31,30, 2025 comprised of other income, net of $6,381, interest income of $5,615, interest income of $3,263,$153, unrealized holding lossgain on marketable securities of $1,096$7,748 and foreign currency exchange loss of $297.$573.

Net gain loss decreasedincreased by $451,524$772,683 from net loss of $712,919 for the three months ended March 31, 2025 to net loss of $340,906$623,246 for the three months ended MarchJune 31,30, 2025 to net gain of $149,437 for the three months ended June 30, 2026, mainly due to reasons as discussed above.

As of MarchJune 31,30, 2026, the Company had working capital of $21,918,986$21,895,248 consisting of cash and cash in bank of $207,296 and time deposits of $1,866$45,480 as compared to working capital of $22,236,994 consisted of cash and cash in bank of $140,072 and time deposits of $0$89,651 as of December 31, 2025. The Company had a net loss of $340,906$191,469 for the threesix months ended MarchJune 31,30, 2026 and accumulated deficits of $12,125,455$11,972,452 as of MarchJune 31,30, 2026 as compared to net loss of $2,307,607 for the year ended December 31, 2025 and accumulated deficits of $11,797,836 as of December 31, 2025.

The following summarizes the key components of our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used in operating activities for the three six months ended MarchJune 31,30, 2026 was $394,770, and were mainly$505,088, comprised of the net loss of $340,906,$149,337 from continuing unrealizedoperations holdingand gainnet on marketable securitiesloss of $12,232,$42,132 from discontinued operations, unrealized exchange gain of 307,324,$974,569, increasegain inon other receivables from related partiesdisposal of $343,discontinued operations of $74,760, gain on disposal of assets of $1,813, the increase in prepaid taxes of $1,942,$587, the decrease in account payable (including related parties) $30, the decrease in customer deposits of $4,908,$14,938, the payment of operating lease liabilities of $45,587.$88,993 and the net cash used in discontinued operations of $40,637. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $2,739,$1,070, amortization of finance assets of $11,906,$13,518, amortization of operating right-of-use assets of $45,361,$88,593, unrealized allowance for creditholding loss on marketable securities of $417, $3,155, inventory write off of $2,099,$2,087, the decrease in accounts receivables of $4,752, the decrease in other receivables from related parties of $7,765,$61, the decrease in inventories of $749,$2,364, the decrease in prepayments prepayments and deposits of $18,137,$29,437, the decrease in other receivablereceivables of $7, increase in accounts payables (including related parties) of $5,533,$30, the increase in other payables (including related parties) and accrued liabilities of $223,759.$47,080 and the increase in amount due to directors of $648,651.

Net cash used in operating activities for the three six months ended MarchJune 31,30, 2025 was $1,453,874, and were mainly$1,948,332, comprised of the net loss of $712,919, increase in other receivables$1,285,819 from relatedcontinuing operations partiesand net loss of $2,194,$50,346 increasefrom indiscontinued prepaidoperations, taxesunrealized holding gain on marketable securities of $3,990,$6,652, the increase in prepayments and deposits of $581,028,$631,794, the decrease in accountsaccount payablespayable (including related parties) of $33,333,$41,996, the decrease in customer deposits of $6,246,$6,533, the payment of operating lease liabilities of $37,518,$76,876, the decrease in other payables (including related parties) and accrued liabilities of $163,419. $125,847 and the net cash used in discontinued operations of $25,368. The net cash used in operating activities was mainly offset by non-cash depreciation and amortization expense of $13,709,$14,900, amortization of finance assets of $10,634,$12,360, amortization of operating right-of-use assets of $37,316, allowance for credit loss of $8,280,$76,465, inventory write off of $6,777, unrealized holding loss on marketable securities of $1,096,$6,897, the decrease in accounts receivables of $4,366,$31,462, the decrease in other receivables from related parties of $1,626, the decrease in inventories of $2,898, and$5,034, the decrease in other receivablereceivables of $1,697.$2,517, and the increase in amount due to directors of $101,292.

Net cash usedprovided inby investing activities for the three six months ended MarchJune 31,30, 20252026 was $23,000,649,$144, which was mainly from advancesthe forproceeds investment.of disposal of subsidiary.

Net cash provided by financing activities for the three six months ended MarchJune 31,30, 2025 was $22,994,658,$23,115,678, whichconsisted was mainly fromof the proceeds from issuance of shares of common stock.stock for $23,000,000, reduction of finance lease liability of $6,392, advance from director of $126,633 and net cash used of $4,563 from discontinued operations.

As of MarchJune 31,30, 2026, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Management reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value. For the threesix months ended MarchJune 31,30, 2026 and 2025, there were no inventory write-down; and $2,099$2,087 and $6,777$6,897 inventory write-off respectively.