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

Examples of forward-looking statements in this annualquarterly report include, but are not limited to, our expectations regarding our business strategy, business prospects, operating results, operating expenses, working capital, liquidity and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our offerings, the cost, terms and availability of components, pricing levels, the timing and cost of capital expenditures, competitive conditions and general economic conditions. You should not rely on forward-looking statements as predictions of future events. These statements are based on our management’s expectations, beliefs and assumptions concerning future events affecting us, which are based on currently available information. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations and assumptions may prove to be incorrect. Our statements should not read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

Collab Z Inc., through its subsidiary, Collab CA LLC, has developed its pioneering Collab Platform, a first-of-its-kind Community-Based Property Management model that is designed to replace traditional property management practice by enabling community involvement and by leveraging modern technology, including artificial intelligence features currently under development. Our approach actively involves tenants and other skilled community members in the management process, handling leasing and daily operations in a way that minimizes conflicts of interest and improves tenant satisfaction. With a four-year five-year lead over new market entrants and the ability to scale instantly without local staffing, Collab Z uniquely positions itself against both traditional property management firms and SaaS-based ProTechPropTech competitors.

The Company identifies EB-5 immigration investment projects and assists investors with project identification, assistance and support during the project application process. Fees are recognized at a point in time upon the fulfillment of the EB-5 service obligations, which is when the EB-5 application package has been submitted. Payments are typically billed immediately, or in two tranches, and any deferred revenue is recognized once performance obligations are met.

The Company provides other real estate consulting services to both related and third parties that are defined by respective service agreements. Consulting services may include terms whereby there are a set of deliverables required for which revenue will be recognized over time as the deliverables are satisfied.satisfied, or at a point in time if the contract calls for a defined deliverable. Each contract is assessed for performance obligations. There is generally no right of return or refund related to these services.

Our sales and marketing costs consistsconsist primarily of salaries and other related costs for business development personnel and advertising and marketing costs. We expect that our sales and marketing expense will increase significantly on an absolute dollar basis and vary from period-to-period as a percentage of revenue for the foreseeable future as we focus on building out our third-party customer facing organization and expanding our brand.

Comparison of Three Months Ended DecemberMarch 31, 31, 20252026 and 20242025

The following table sets forth key components of our results of operations for the three months ended DecemberMarch 31, 20252026 and 2024,2025, both in dollars and as a percentage of our nettotal revenues.revenue.

Related party revenue increased by $153,729$97,008 for the three months ended March December 31, 20252026 to $383,596$392,777 as compared to $229,867$295,769 in the prior period. The increase was primarily due to increasedincrease consulting services of $208,900 andin development and construction management fees ofby $49,503,$45,789 and consulting services by $122,900, partially offset by a decrease in property management ofby $55,966, and a decrease in procurement revenue of $48,708. Consulting services were primarily related to EB5 services, for which the Company provides support services for EB5 applicants and the EB5 project.$71,681.

Revenues from third parties was $99,647$386,172 for the three months ended DecemberMarch 31, 2025,2026, consistingprimarily of consulting fees performed and property management services to third parties. In 2024,2025, the Company generated revenue of $200,000$82,549 forfrom consulting fees performed and property management services.

Cost of revenue was $77,367$119,941 for the three months ended DecemberMarch 31, 20252026 as compared to $82,810$103,147 in 2024.2025. The decreaseincrease was primarily due to increase in a lower third-party revenue during the three months ended DecemberMarch 31, 2025.2026.

Sales and marketing expenses increased by $55,394 $136,159 for the three months ended DecemberMarch 31, 20252026 to $59,920$141,881 as compared to $4,526$5,722 in the prior period. This increase was primarily due to higher personnel costs assisting with business development.

General and administrative expenses increased by $40,046$91,213 for the three months ended DecemberMarch 31, 20252026 to $261,837$335,977 as compared to $221,791$244,764 in the prior period. This increase was primarily due to higher personnel costs and professional services as we expanded our operations, increased headcount and incurred professional costs in connection with our contemplated initial public offering.

Other income (expense) was $10,593$11,074 and ($7,405)$3,168 for the three months ended ended DecemberMarch 31, 20252026 and 2024,2025, respectively, which primarily consisted of interest income $4,253 from a note receivable and interest income of $9,575 on restricted cash, offset by loss on joint ventures of $2,238,($2,754), compared to $8,710interest income $17,351 from a note receivable and other income of $113, offset by $14,296 interest expense on the Company’s outstanding line of credit,credit offset by other income of $1,305 during the prior period.

Net income was $94,712$192,224 for the three months ended December March 31, 20252026 as compared to a net income of $113,335$27,853 for the prior period. The decreaseincrease of income of $18,623$164,371 was primarily due to increased operatingother expenses revenue during the three months ended DecemberMarch 31, 2025.2026.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had $250,904$10,794 in cash as of DecemberMarch 31, 2025,2026, and $892,747$1,006,805 in amounts due from related parties. The Company is heavily reliant on related parties as its primary revenue and cash flow sources and has historically generated revenues from sources that may not be recurring.

The Company is in its early stage,early-stage and we expect expects to incur significant costs to expand its operations and conduct its business plan, which may result in future losses if it cannot effectively market its products and achieve market acceptance.

The net due to and from related parties’ balances at December March 31, 2025,2026, which are expected to be fully collected and paid, provide for a net positive effect to cash of approximately $0.87 $0.39 million. In addition, third party receivables and the note receivable are expected to be paid and create cash inflows of $0.5$0.8 million in aggregate. These funds are expected to provide the Company with operating capital sufficient to cover basic operations while the Company makes efforts to increase revenue and maintain cost management to make operations more profitable and sustainable. Lastly, the Company is seeking to raise capital via an equity offering. In the event the Company does not complete an offering, the Company expects to seek additional funding through private equity offering, debt and/or related party financings to provide additional operating capital. The Company may not be able to obtain financing on acceptable terms, or at all.

Liquidity activity is shown for the Six months ended March 31, 2026 and 2025. The following is a summary of the Company’s cash flows provided (used in) operating, investing, and and financing activities:

Cash (used in) provided by operating activities was ($157,392$271,017) for the three six months ended DecemberMarch 31, 20252026 as compared to $221,495$128,796 for the prior period. Cash used in during the threesix months ended DecemberMarch 31, 2025 2026 was primarily due to net income of $94,712$286,936 and cash used in operating assets and liabilities of $273,199$605,136 due to the increased receivables, and partially offset by non-cash charges of $21,095.$47,183. Cash provided during the threesix months ended DecemberMarch 31, 20242025 was primarily due to our net income of $113,335,$141,188, non-cash charges of $23,333$42,667 and cash provided byused in operating assets and liabilities of $84,827.$55,509.

Net Cash Provided by FinancingInvesting Activities

Cash provided by financinginvesting activities was $106,993 and $558,028$83,006 for the threesix months ended March 31, 2026 as compared to 1,237,974 for the prior period. Cash provided during the six months ended DecemberMarch 31, 20252026 was primarily due to the receipt from repayment of loan receivable of $250,000, partially offset by the repayment of due to related parties of $37,001 and 2024,a respectively.software capitalization of $129,993. Cash provided by financinginvesting activities forduring the three six months ended DecemberMarch 31, 2025 includedwas realizationprimarily due to receipts from related parties of subscription$2,065,199 and repayment of loan receivable of $150,000 and $10,332 in proceeds from due to related parties, partially$662,275, offset by $53,339 in capitalized deferred offering costs. Cash provided by financing activities for the three months ended December 31, 2024 included $1,300,000 in proceeds from the Company’s revolving lineissuance of credit,loan partiallyreceivable of offset$1,470,000 byand $741,942 insoftware repaymentcapitalization toof due to related parties.$19,500.

During the year ended September 30, 2025, the Company borrowed an aggregate of $1,300,000, which was used to provide a loan to a third party (see Note 4). On February 4, 2025, the Company paid off the line of credit with the funds from the collection of the Company’s due from related parties and receivables. As a result, the line of credit was closed prior to its contractual maturity date, and no amounts were outstanding or available under the facility as of DecemberMarch 31, 2025.2026.

As of DecemberMarch 31, 20252026 and September 30, 2025, the the fair value of SAFEs was $25,000 and $25,000, respectively. See Note 5 for fair value disclosures.

Due to related parties includes cash advances received from various related parties. These advances are unsecured, due on demand and non-interest bearing. As of DecemberMarch 31, 20252026 and September 30, 2025, the amounts outstanding were $26,937$30,001 and $16,605 respectively.

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting standards in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this annualquarterly report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

An “established trading market” for the Company’s common stock does not exist. In 2024, the fair value of the shares of common stock was determined based on public company comparables, specifically microcap companies in similar industries including PropTechProtech and technology platform services. The Company then applied a discount factor accounting for the private to public discount and minority interest discount, which was estimated using comparable valuations. In 2025, the Company considered the planned go-public transaction and the estimated price, as well as Series B preferred shares sold near year end, and estimated the accretion of value over the period until estimated IPO to estimate the fair value of common stock. In connection with the stock options granted on January 31, 2026, the Company estimated the fair value of common stock at $3.60 per share, derived from the contemporaneous arm’s-length issuance of Series C convertible preferred stock at $4.00 per share, which on an as-converted basis (at the 90% conversion price embedded in the Series C Certificate of Designation, assuming a $4.00 anticipated Qualified Public Offering price) implies a per-common-share value of $3.60. This input reflects the state of the IPO process as of the grant date, including that Nasdaq listing approval had not been received and no definitive offering timeline existed.

A description of recently issued and adopted accounting accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 to our condensed consolidated financial statements appearingincluded at the end ofin this annual report.report

As of the issuance date of these condensed consolidated financial statements, the maximum potential rental guarantees were approximately $102,000 per month. Since entering into these terms, the Company has achieved occupancy rates at all properties at or above market rental rates. As such, there have been no shortfall payments incurred by Collab Z to date.

We have taken advantage of certain reduced reporting requirements in this annualquarterly report. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.