AMC Robotics Corp
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 14, 2026
AMCI$1.100.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-19.
0001493152-26-024300
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001493152-26-038443
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 156 previous paragraphs and 172 current paragraphs.
47 unchanged; 42 reworded; 81 added; 67 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (81)
Current report
The Company primarily distributes intelligent security camera products through e-commerce platforms serving customers in the United States, Canada, and Europe. In addition to product sales, the Company generates recurring revenue through cloud-based intelligent information services, artificial intelligence service-sharing arrangements, intelligent information services, and revenue-sharing arrangements with strategic business partners. During 2026, the Company continued to expand its emphasis on higher-margin service-based revenue while maintaining a more disciplined approach to inventory management and operating expenses.
Current report
Concurrently with the Business Combination, the Company completed a private investment in public equity (“PIPE”) financing that generated gross proceeds of approximately $8.0 million. The financing enhanced the Company’s liquidity and financial flexibility to support working capital requirements, strategic initiatives, and future growth opportunities.
Current report
Strategic Investment
Current report
During the second quarter of 2026, the Company invested an aggregate of $1.0 million in Etronium AI Inc**.** through two Simple Agreements for Future Equity (“SAFEs”). The investment reflects management’s strategy of pursuing opportunities in artificial intelligence technologies that may complement the Company’s long-term robotics and intelligent security solutions. The investment is accounted for as a long-term investment under the applicable provisions of U.S. GAAP.
Current report
Revenue Strategy
Current report
The Company’s revenue mix has continued to evolve from traditional product sales toward higher-margin recurring revenue generated through cloud-based intelligent information services, artificial intelligence service offerings, and revenue-sharing arrangements with strategic partners, including Kami Vision Inc. Management believes this transition reduces working capital requirements associated with inventory-intensive product sales while supporting improved gross margins and more predictable recurring revenue.
Current report
During the six months ended June 30, 2026, the Company continued to generate a significant portion of its revenue from cloud-service revenue sharing, AI service sharing, and intelligent information service arrangements with Kami. The Company also continued to generate product revenue through sales to related and unrelated customers.
Current report
Management remains focused on expanding the Company’s intelligent security and robotics business while continuing to improve operating efficiency and profitability. Key strategic priorities include:
Current report
The Company may evaluate financing alternatives from time to time to support its working capital requirements, strategic investments, and long-term growth objectives. There can be no assurance that additional financing will be available on acceptable terms or at all.
Current report
While management believes the Company is well positioned to execute its long-term strategy, future operating results will continue to depend on customer demand, technological innovation, competitive market conditions, the successful execution of strategic initiatives, and general economic conditions.
Current report
The Company’s financial performance during the three and six months ended June 30, 2026 reflected a continued shift toward higher-margin revenue streams and improved operating efficiency. Although total revenues declined compared with the corresponding periods in 2025, gross profit increased significantly as a result of a more favorable revenue mix and substantially lower product-related costs.
Current report
For the three months ended June 30, 2026, total revenues decreased by $460,098, or 33%, to $937,177, compared with $1,397,275 for the corresponding period in 2025. The decrease was primarily attributable to lower product revenue, partially offset by an increase in revenue share and other service-based revenue included within revenue share.
Current report
Cost of revenues decreased by $944,124, or 83%, to $186,570, compared with $1,130,694 for the corresponding period in 2025. The decrease primarily reflected lower product costs, e-commerce platform expenses, delivery and freight costs, and inventory impairment losses associated with the reduction in product sales.
Current report
As a result, gross profit increased by $484,026, or 182%, to $750,607, compared with $266,581 for the prior-year period. Gross margin increased to approximately 80% for the three months ended June 30, 2026, from approximately 19% for the corresponding period in 2025. The improvement was primarily attributable to a greater contribution from higher-margin revenue-sharing and service-based activities and lower product-related costs.
Current report
The Company reported a loss from operations of $156,500 for the three months ended June 30, 2026, compared with a loss from operations of $735,036 for the corresponding period in 2025, representing an improvement of $578,536. The improvement was primarily attributable to increased gross profit and lower sales and marketing expenses, partially offset by higher general and administrative expenses.
Current report
The Company reported a net loss of $175,730 for the three months ended June 30, 2026, compared with a net loss of $228,913 for the corresponding period in 2025, representing an improvement of $53,183. The current-year period included an income tax benefit of approximately $1,655, compared with income tax expense of approximately $1,751 in the prior-year period. The improvement in operating results was partially offset by total other expense, net, of $20,885 during the current-year quarter, compared with total other income, net, of $507,874 during the prior-year quarter. The prior-year quarter included $533,688 of other income from a related party.
Current report
For the six months ended June 30, 2026, total revenues decreased by $1,068,007, or 33%, to $2,121,793, compared with $3,189,800 for the corresponding period in 2025. The decrease was primarily attributable to lower product revenue, partially offset by increased revenue share and service-based revenue.
Current report
Cost of revenues decreased by $2,084,358, or 86%, to $350,530, compared with $2,434,888 for the corresponding period in 2025. Consequently, gross profit increased by $1,016,351, or 135%, to $1,771,263, compared with $754,912 in the prior-year period. Gross margin increased to approximately 83% for the six months ended June 30, 2026, from approximately 24% for the corresponding period in 2025.
Current report
The Company reported a loss from operations of $27,961 for the six months ended June 30, 2026, compared with a loss from operations of $1,482,788 for the corresponding period in 2025, representing an improvement of $1,454,827. The improvement primarily reflected increased gross profit and significantly lower sales and marketing expenses, partially offset by higher general and administrative and research and development expenses.
Current report
The Company reported a net loss of $30,129 for the six months ended June 30, 2026, compared with a net loss of $306,090 for the corresponding period in 2025, representing an improvement of $275,961. Total other expense, net, was $1,724 for the first six months of 2026, compared with total other income, net, of $1,182,772 for the corresponding period in 2025. The prior-year period included $1,217,586 of other income from a related party. The Company recorded income tax expense of approximately $444 and $6,074 for the six months ended June 30, 2026 and 2025, respectively.
Current report
During the second quarter of 2026, the Company invested an aggregate of $1.0 million in Etronium AI Inc. through two Simple Agreements for Future Equity. The investment supports the Company’s long-term strategy of pursuing artificial intelligence technologies that may complement its robotics and intelligent security solutions.
Current report
Overall, the results for the first six months of 2026 reflected significantly improved gross margins, reduced sales and marketing expenditures, and a substantial reduction in operating loss, despite lower total revenues.
Current report
Management evaluated the errors in accordance with applicable accounting guidance and concluded that they were not material, individually or in the aggregate, to the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2025. Accordingly, an amendment or restatement of those financial statements was not required.
Current report
Management also concluded that correcting the errors entirely in the three months ended March 31, 2026 would have materially misstated the Company’s results of operations for that interim period. Therefore, the Company revised the December 31, 2025 comparative balance sheet included in the unaudited condensed consolidated financial statements to reflect the correction of the immaterial prior-period errors.
Current report
The revisions increased accrued expenses and other current liabilities and accumulated deficit by approximately $109,000 as of December 31, 2025. The revisions had no effect on the Company’s cash flows for the year ended December 31, 2025.
Current report
The Company’s results of operations for the three and six months ended June 30, 2026 reflected continued progress in its transition toward a higher-margin, more capital-efficient business model. Although total revenues declined compared with the corresponding periods in 2025, the Company achieved significant improvements in gross profit and operating results through changes in revenue composition, disciplined cost management, and reduced product-related expenses.
Current report
Management believes these changes reflect its long-term strategy of improving profitability, reducing working capital requirements, and expanding recurring revenue streams.
Current report
Total revenues for the three months ended June 30, 2026 were $937,177, a decrease of $460,098, or 33%, compared with $1,397,275 for the same period in 2025. Total revenues for the six months ended June 30, 2026 were $2,121,793, a decrease of $1,068,007, or 33%, compared with $3,189,800 for the corresponding period in 2025.
Current report
The decrease in revenues during both periods was primarily attributable to lower third-party product sales as the Company continued to reduce its emphasis on inventory-intensive product distribution. This decline was partially offset by continued growth in revenue generated through revenue-sharing arrangements with related parties.
Current report
Product revenue decreased by $591,366, or 79%, during the second quarter and by $1,711,151, or 87%, during the first six months of 2026 compared with the corresponding periods in 2025. The decrease primarily reflected lower sales volumes as management continued to shift its business strategy away from lower-margin product sales toward higher-margin service-based activities.
Current report
Product revenue from related parties totaled $5,143 for the three months ended June 30, 2026, compared with $146,655 for the corresponding period in 2025. For the six months ended June 30, 2026, product revenue from related parties totaled $141,691, compared with**$**146,789 for the corresponding period in 2025.
Current report
Revenue share from related parties increased by $272,780, or 54%, during the second quarter and by $648,242, or 60%, during the first six months of 2026. Revenue-sharing arrangements represented approximately 83% and 81% of total revenues during the three- and six-month periods ended June 30, 2026, respectively, compared with approximately 36% and 34%, respectively, during the corresponding periods in 2025.
Current report
The Company’s revenue mix continued to evolve during 2026, with revenue-sharing arrangements becoming the primary source of revenues. Management believes these arrangements generally require substantially less working capital, involve lower direct costs than traditional product sales, and support higher gross margins. The Company expects to continue pursuing opportunities that expand recurring and service-based revenue while maintaining a disciplined approach to inventory investment.
Current report
Cost of revenues for the three months ended June 30, 2026 was $186,570, compared with $1,130,694 for the corresponding period in 2025, representing a decrease of $944,124, or 83%. Cost of revenues for the six months ended June 30, 2026 was $350,530, compared with $2,434,888 for the corresponding period in 2025, representing a decrease of $2,084,358, or 86%.
Current report
The decrease in cost of revenues during both periods was primarily attributable to lower product-related costs resulting from reduced product sales volumes, together with significant reductions in e-commerce platform expenses, product procurement costs, delivery and freight costs, and inventory impairment losses. These reductions reflect management’s continued efforts to reduce inventory-intensive operations and improve operating efficiency.
Current report
Gross profit increased to $750,607 for the three months ended June 30, 2026 from $266,581 for the corresponding period in 2025, representing an increase of $484,026, or 182%. For the six months ended June 30, 2026, gross profit increased to $1,771,263 from $754,912 for the corresponding period in 2025, representing an increase of $1,016,351, or 135%.
Current report
Gross margin improved to approximately 80% and 83% for the three- and six-month periods ended June 30, 2026, respectively, compared with approximately 19% and 24%, respectively, for the corresponding periods in 2025. The increase primarily reflected a significant change in revenue mix. Revenue-sharing and service-based arrangements, which generally have limited direct costs and are recognized on a net basis, represented approximately 83% and 81% of total revenue for the three and six months ended June 30, 2026, respectively. By comparison, product revenue declined substantially and represented a smaller portion of total revenue. Accordingly, the improvement in consolidated gross margin was primarily attributable to the increased proportion of revenue generated from higher-margin revenue-sharing and service-based activities, together with lower product-related costs and inventory impairment charges.
Current report
Management believes the continued shift toward service-based and recurring revenue, together with disciplined inventory and cost management, has strengthened the Company’s gross profitability and positioned the business for more capital-efficient growth.
Current report
Total operating expenses for the three months ended June 30, 2026 were $907,107, compared with $1,001,617 for the corresponding period in 2025, representing a decrease of $94,510 or 9%. For the six months ended June 30, 2026, total operating expenses were $1,799,224, compared with $2,237,700 for the corresponding period in 2025, representing a decrease of $438,476, or 20%. The overall decrease during both periods was primarily attributable to significantly lower sales and marketing expenditures, partially offset by higher general and administrative expenses.
Current report
General and Administrative Expenses
Showing the first 40 of 81 passages. Open the source sections for the rest.
Removed paragraphs (67)
Previous report
The Company distributes security camera products through e-commerce platforms across the United States, Canada, and Europe. Its product offerings are primarily focused on residential and small business applications, including indoor and outdoor smart cameras.
Previous report
In connection with the Business Combination, the Company completed a PIPE financing that generated gross proceeds of $8.0 million. The PIPE financing closed concurrently with the Business Combination, and the Company issued warrants to investors as part of the transaction.
Previous report
Revenue Streams
Previous report
During 2025, the Company’s revenue mix shifted, with a decline in product sales and the introduction of a revenue-sharing arrangement with its related party, Kami Vision Inc.. Under this arrangement, the Company is entitled to a percentage of revenue generated from intelligent information services. This revenue stream continued during the three months ended March 31, 2026.
Previous report
The Company intends to continue generating revenue from its existing product lines while advancing its strategy to develop and deploy autonomous robotic systems and intelligent security solutions. Management expects that continued execution of this strategy may improve margins and support long-term growth, although the timing and extent of such improvements remain subject to market conditions and execution risks.
Previous report
The Company’s financial performance for the three months ended March 31, 2026 reflects a shift in operating focus toward profitability, cost efficiency, and higher-margin revenue streams.
Previous report
Total revenue decreased by $607,909, or 34%, to $1,184,616 for the three months ended March 31, 2026, compared to $1,792,525 for the same period in 2025. The decline was primarily attributable to a reduction in lower-margin product sales and decreased e-commerce volume. Correspondingly, cost of revenue decreased by $1,140,235, or 87%, to $163,960, reflecting improved cost discipline, reduced inventory-related inefficiencies, and a shift in revenue mix.
Previous report
As a result, gross profit increased by $532,326, or 109%, to $1,020,656, compared to $488,330 in the prior-year period. Gross margin expanded significantly from approximately 27% for the three months ended March 31, 2025 to approximately 86% for the three months ended March 31, 2026. This improvement was primarily driven by reduced inventory impairment, improved procurement and cost controls, and a higher contribution from revenue-sharing and service-based revenue streams.
Previous report
Operating results improved from a loss of $747,753 for the three months ended March 31, 2025 to operating loss of $128,539 for the three months ended March 31, 2026, representing an improvement of approximately $876,292. This improvement was primarily attributable to higher gross profitability and significantly reduced discretionary spending, particularly in sales and marketing expenses, while general and administrative expenses remained relatively consistent between periods.
Previous report
For the three months ended March 31, 2026, the Company reported net income of $145,601, compared to a net loss of $77,177 for the three months ended March 31, 2025, representing an improvement of approximately $222,778. The improvement in net results reflects enhanced cost efficiency and improved gross margins, partially offset by changes in other income and expense items.
Previous report
Liquidity remained strong, with cash and cash equivalents of $6,632,619 as of March 31, 2026, compared to $7,004,601 as of December 31, 2025, a decrease of $371,982. The decrease was primarily attributable to operating cash outflows during the period, partially offset by proceeds from warrant exercises.
Previous report
Compared to March 31, 2025, cash and cash equivalents increased $6.4 million, reflecting proceeds received in connection with the Business Combination and related financing activities completed in December 2025. The Company’s strengthened liquidity position has enhanced its ability to support working capital needs and execute its operational strategy.
Previous report
During the three months ended March 31, 2026, the Company continued to focus on improving profitability, enhancing cost efficiency, and maintaining a disciplined approach to managing its balance sheet.
Previous report
The Company’s results of operations for the three months ended March 31, 2026 were characterized by declining revenue but significantly improved profitability, driven by changes in revenue composition, cost structure, and operational discipline.
Previous report
These changes reflect a broader strategic repositioning of the Company toward a more sustainable and capital-efficient operating model.
Previous report
Total revenue for the three months ended March 31, 2026 was $1,184,616, a decrease of $607,909, or 34%, compared to $1,792,525 for the same period in 2025. The decline was primarily attributable to a significant reduction in third-party product revenue, partially offset by increases in revenue derived from related party arrangements.
Previous report
Product revenue decreased by $1,119,785, or 92%, to $102,018 for the three months ended March 31, 2026, compared to $1,221,803 in the prior-year period. The decrease reflects reduced sales volume and a strategic shift away from lower-margin product lines, resulting in a contraction of traditional inventory-based sales activities.
Previous report
Product revenue from related parties increased by $136,414 to $136,548 for the three months ended March 31, 2026, compared to $134 in the prior-year period. While the increase is significant on a percentage basis, related party product revenue remains a relatively small portion of total revenue. The increase reflects expanded transactions with affiliated entities as part of the Company’s evolving commercial relationships.
Previous report
Revenue share from related parties increased by $375,462, or 66%, to $946,050 for the three months ended March 31, 2026, compared to $570,588 in the prior-year period. This category represents the Company’s participation in revenue-sharing arrangements, including cloud-based services and intelligent information services introduced in 2025. Revenue share has become the largest contributor to total revenue in the current period, reflecting continued growth in these collaborative arrangements.
Previous report
The overall change in revenue composition reflects a shift from traditional product sales toward revenue-sharing and service-based models. These arrangements generally involve lower direct costs and reduced working capital requirements compared to inventory-based sales. Management believes this transition supports a more scalable and potentially higher-margin revenue structure over time, although total revenue declined in the current period due to the reduction in product sales.
Previous report
Cost of revenue for the three months ended March 31, 2026 was $163,960, compared to $1,304,195 in the prior-year period, a decrease of $1,140,235. Gross profit increased to $1,020,656 from $488,330, resulting in gross margin improving to 86% from 27%.
Previous report
The decrease in cost of revenue was primarily driven by significantly lower product-related costs, including reduced inventory-related charges and lower sales volume. In addition, logistics, fulfillment, and platform costs declined in line with reduced inventory-based sales activity.
Previous report
The improvement in gross margin also reflects a shift in revenue mix toward revenue-sharing and service-based arrangements, which generally carry lower direct costs compared to product sales. Overall, the results indicate a more favorable cost structure in the current period.
Previous report
Total operating expenses for the period were $892,117, compared to $1,236,083 in the prior-year period, representing a decrease of $343,966, or 28%. The overall reduction was primarily driven by a significant decrease in sales and marketing expenses.
Previous report
General and administrative expenses were $854,786, compared to $817,412 in the prior-year period, an increase of $37,374, or 5%. The increase was primarily attributable to higher professional fees and other administrative costs associated with operating as a public company following the Business Combination.
Previous report
Sales and marketing expenses decreased to $14,332 from $404,112, a decline of $389,780, or 96%, primarily due to reduced promotional activities.
Previous report
Research and development expenses increased to $22,999 from $14,559, an increase of $8,400, or 58%, reflecting continued investment in product and technology development.
Previous report
Overall, the decrease in total operating expenses was mainly attributable to lower sales and marketing spending, partially offset by increased general and administrative expenses and continued investment in research and development.
Previous report
Total other income, net was $19,161 for the three months ended March 31, 2026, compared to $674,899 in the prior-year period, a decrease of $655,738. The decrease was primarily due to the absence of other income from related parties in the current period, compared to $683,898 recognized in the prior-year period.
Previous report
Interest income increased to $28,651 from $318, reflecting higher cash balances during the period. Other income (expense), net decreased by $16,675, and no related party interest expense was recognized in the current period compared to $16,502 in the prior-year period.
Previous report
● Operating performance, including gross margin and expense management
Previous report
● Working capital dynamics, particularly receivables and payables, including those with related parties
Previous report
● Access to external financing, including equity financing and capital markets transactions
Previous report
● Inventory management, which affects cash utilized in operations
Previous report
Net cash used in operating activities was $391,580 for the three months ended March 31, 2026, compared to net cash provided by operating activities of $203,985 in the prior-year period, representing a decrease of $595,565. The use of cash in the current period was primarily driven by changes in working capital, including the timing of collections and payments.
Previous report
Net cash provided by investing activities was nil for the three months ended March 31, 2026, compared to net cash used of $305,624 in the prior-year period. The prior-year activity primarily related to transactions involving financial assets, while there were no significant investing activities in the current period.
Previous report
Net cash provided by financing activities was $20,085 for the three months ended March 31, 2026, compared to no financing activity in the prior-year period. The current period activity primarily reflects proceeds from financing-related transactions.
Previous report
The Company’s capital resources consist primarily of cash on hand and, to a lesser extent, cash generated from operations. Following the Business Combination completed in December 2025, the Company significantly improved its liquidity and capital structure through the receipt of trust proceeds and PIPE financing. The Company may continue to rely on related-party transactions and financing arrangements, as well as external financing sources, to support its working capital needs and growth initiatives as necessary.
Previous report
The Company’s capital requirements are driven primarily by working capital needs, operating expenses (including public company costs), and potential investments in product development and service offerings. The Company currently does not maintain a revolving credit facility or other committed borrowing arrangements.
Previous report
Management expects that the Company’s current cash position and anticipated operating cash flows will be sufficient to meet its short-term liquidity needs. However, the Company may seek additional financing to support future growth initiatives or respond to changing market conditions.
Showing the first 40 of 67 passages. Open the source sections for the rest.
Reworded paragraphs (42)
Previous wording
References to the “Company,” “our,” “us” or “we” refer to AMC Robotics Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Current wording
References to the “Company,” “our,” “us,” or “we” refer to AMC Robotics Corporation. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The discussion below contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements due to various factors, including those discussed under “Risk Factors” in our Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
Previous wording
AMC Robotics Corporation became publicly listed through its business combination with AlphaVest Acquisition Corp. in December 2025. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer. Accordingly, the historical financial statements of AMC Corporation form the basis of the Company’s consolidated financial statements.
Current wording
AMC Robotics Corporation became a publicly traded company upon the completion of its business combination with AlphaVest Acquisition Corp. on December 9, 2025. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer. Accordingly, the historical financial statements of AMC Corporation became those of the combined company.
Previous wording
Prior to December 2025, certain e-commerce platform accounts were operated through arrangements with third-party entities, including Ants, Xiaoyun, and Yishijue, pursuant to authorization agreements. As of December 1, 2025, the Company terminated the contractual arrangements with Xiaoyun and Yishijue, resulting in the deconsolidation of these variable interest entities. Following such termination, the Company operates its business without reliance on VIE structures.
Current wording
Prior to December 2025, certain e-commerce platform accounts were operated through contractual arrangements with third-party entities, including Ants, Xiaoyun, and Yishijue. Effective December 1, 2025, the Company terminated the contractual arrangements with Xiaoyun and Yishijue and deconsolidated those variable interest entities (“VIEs”). Since that time, the Company has conducted its operations without reliance on VIE structures. Limited transitional transactions associated with certain former VIE marketplace accounts continued during 2026 and were accounted for as related-party transactions.
Previous wording
In December 2025, the Company completed its business combination with AlphaVest Acquisition Corp., as a result of which AMC Corporation became a wholly owned subsidiary of AMC Robotics Corporation. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer for financial reporting purposes.
Current wording
In December 2025, the Company completed its business combination with AlphaVest Acquisition Corp., pursuant to which AMC Corporation became a wholly owned subsidiary of AMC Robotics Corporation. The transaction significantly strengthened the Company’s capital structure and provided access to the public capital markets.
Previous wording
Private Investment in Public Equity (“PIPE”) Financing
Current wording
Private Investment in Public Equity Financing
Previous wording
During the preparation of the Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, management identified certain immaterial prior period errors primarily related to omitted accruals for professional service fees in the Company’s previously issued consolidated financial statements for the year ended December 31, 2025. Management concluded that the errors were not material to the previously issued annual financial statements for the year ended December 31, 2025 and, therefore, restatement of the previously issued financial statements was not required. However, management further concluded that recording the correction entirely within the quarter ended March 31, 2026 would materially misstate the Company’s results for the interim period. Accordingly, the Company revised the comparative balance sheet as of December 31, 2025 included in the unaudited condensed financial statements to correct such immaterial prior period errors.
Current wording
During the preparation of the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2026, management identified certain immaterial errors in the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2025. The errors primarily related to the omission of accrued professional service fees.
Previous wording
As of March 31, 2026, the Company had cash and cash equivalents of approximately $6.6 million, compared to approximately $7.0 million as of December 31, 2025, representing a decrease of approximately $0.4 million. The decrease was primarily attributable to operating cash outflows during the period, partially offset by proceeds from warrant exercises.
Current wording
As of June 30, 2026, the Company had cash and cash equivalents of approximately $4.5 million, compared with approximately $7.0 million as of December 31, 2025, representing a decrease of approximately $2.5 million during the first six months of 2026. The decrease primarily reflected approximately $1.5 million of net cash used in operating activities and the Company’s $1.0 million investment in Etronium AI Inc., partially offset by approximately $20,000 of proceeds from the exercise of warrants.
Previous wording
Compared to March 31, 2025, cash and cash equivalents increased significantly, primarily reflecting proceeds received in connection with the Business Combination and related financing activities completed in December 2025.
Current wording
Compared to June 30, 2025, the Company’s cash and cash equivalents increased significantly, primarily reflecting the proceeds received from the Business Combination and the related PIPE financing completed in December 2025, which substantially strengthened the Company’s liquidity position.
Previous wording
The Company’s liquidity position continues to be influenced by several key factors:
Current wording
The Company’s liquidity continues to be influenced by several key factors, including:
Previous wording
Management believes that the Company’s current cash position, together with expected operating cash flows, will be sufficient to meet its working capital requirements and capital expenditure needs for at least the next twelve months from the issuance date of these financial statements. However, the Company’s future liquidity will depend on its ability to sustain profitability, manage working capital efficiently, and maintain access to capital markets if needed.
Current wording
Management believes that the Company’s existing cash and cash equivalents, together with anticipated cash flows from operations, will be sufficient to meet its expected working capital requirements, planned operating activities, and capital expenditure needs for at least the next twelve months from the date these unaudited condensed consolidated financial statements are issued. However, the Company’s future liquidity will continue to depend on its ability to generate positive operating cash flows, effectively manage working capital, successfully execute its strategic initiatives, and, if necessary, obtain additional financing on acceptable terms. There can be no assurance that any financing will be completed on acceptable terms or at all.
Previous wording
The Company’s contractual obligations consist primarily of lease obligations, and other operating liabilities, as disclosed in Note 9 - Lease and Note 14 – Commitments and Contingencies.
Current wording
The Company’s contractual obligations consist primarily of operating lease obligations and other operating liabilities, as disclosed in Note 9 – Leases and Note 15 – Commitments and Contingencies to the unaudited condensed consolidated financial statements.
Previous wording
The Company enters into purchase commitments with suppliers in the normal course of business. These commitments are generally short-term in nature and aligned with expected sales demand. The Company continues to manage inventory levels conservatively, limiting exposure to long-term procurement commitments.
Current wording
The Company enters into purchase commitments with suppliers in the ordinary course of business. These commitments are generally short-term in nature and are intended to support anticipated customer demand. Management continues to monitor inventory levels and procurement activities to efficiently manage working capital and minimize exposure to long-term purchase commitments.
Previous wording
The Company may be subject to contingencies, including legal or contractual matters, in the ordinary course of business. Management does not believe that any such matters will have a material adverse effect on the Company’s financial position as of March 31, 2026.
Current wording
The Company may be involved in legal proceedings, claims, and other contingencies arising in the ordinary course of business. Management does not believe that any currently pending matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
Previous wording
The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures. These estimates are based on historical experience, current conditions, and various other assumptions that management believes are reasonable under the circumstances.
Current wording
The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. These estimates are based on historical experience, current conditions, and various other assumptions that management believes are reasonable under the circumstances.
Previous wording
Because of the inherent uncertainty involved in making these estimates, actual results could differ materially from those estimates. The Company’s most critical accounting policies are those that involve significant judgment and have a material impact on the financial statements. There have been no material changes to the Company’s critical accounting policies and estimates from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Because of the inherent uncertainty involved in making estimates, actual results could differ materially from those estimates. Management continually evaluates its accounting estimates and assumptions as facts and circumstances change.
Previous wording
There were no material changes to the terms of the FPA during the three months ended March 31, 2026. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional details regarding the FPA.
Current wording
There have been no material changes to the Company’s critical accounting policies or significant estimates during the six months ended June 30, 2026 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
The Company recognizes revenue in accordance with ASC 606,Revenue from Contracts with Customers, when control of goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled.
Current wording
The Company recognizes revenue in accordance with ASC 606,Revenue from Contracts with Customers when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
Previous wording
A significant area of judgment involves determining whether the Company acts as a principal or an agent in its revenue arrangements, particularly in transactions involving:
Current wording
The Company generates revenue primarily from product sales, revenue-sharing arrangements, and related services. A significant area of judgment involves determining whether the Company acts as a principal or an agent in certain revenue arrangements, particularly those involving:
Previous wording
If the Company is determined to be the principal, revenue is recognized on a gross basis; if the Company is an agent, revenue is recognized on a net basis. Changes in this assessment could materially affect reported revenue and cost of revenue.
Current wording
When the Company concludes that it is the principal in an arrangement, revenue is recognized on a gross basis. When the Company concludes that it acts as an agent, revenue is recognized on a net basis. Changes in these judgments could materially affect the amount of revenue and cost of revenue reported in the Company’s condensed consolidated financial statements.
Previous wording
In addition, revenue-sharing arrangements require judgment in identifying performance obligations and determining the appropriate allocation of transaction price. Variability in contract terms or interpretation could impact the timing and amount of revenue recognized.
Current wording
Revenue-sharing arrangements also require significant judgment in identifying performance obligations, determining the transaction price, and assessing the timing of revenue recognition. Differences in contractual terms or changes in the underlying facts and circumstances could affect the timing and amount of revenue recognized.
Previous wording
Inventory is stated at the lower of cost or net realizable value. Cost is determined using standard costing methods, which approximate actual costs.
Current wording
Inventory is stated at the lower of cost or net realizable value. Cost is determined using the moving-average cost method, which approximates actual cost.
Previous wording
The Company evaluates inventory for excess quantities, obsolescence, and slow-moving items. This evaluation requires significant judgment regarding forecasted demand, product lifecycle and technological obsolescence, and pricing trends and competitive conditions.
Current wording
Management evaluates inventory for excess quantities, obsolescence, slow-moving items, and expected future demand. These assessments require significant judgment regarding forecasted customer demand, product life cycles, technological developments, pricing trends, and competitive market conditions.
Previous wording
During 2025, the Company improved its inventory management practices, resulting in reduced inventory levels and lower impairment charges compared to prior periods. These practices continued during the three months ended March 31, 2026. However, inventory valuation remains sensitive to changes in demand patterns, product innovation cycles, and market conditions, which could result in additional write-downs in future periods.
Current wording
During the six months ended June 30, 2026, the Company recorded inventory impairment charges of $49,929. Nevertheless, inventory valuation continues to be sensitive to changes in customer demand, product innovation cycles, and market conditions, which could result in additional write-downs in future periods.
Previous wording
The Company accounts for expected credit losses under ASC 326 using a loss-rate methodology based on historical credit loss experience, current economic conditions, and forward-looking information.
Current wording
The Company measures expected credit losses in accordance with ASC 326,Financial Instruments—Credit Losses, using a methodology that considers historical loss experience, current economic conditions, and reasonable and supportable forecasts.
Previous wording
A significant portion of the Company’s accounts receivable is due from related parties (see Note 8), which introduces concentration risk. Management evaluates collectability on an ongoing basis, considering factors such as the financial condition of counterparties, payment history, and contractual terms.
Current wording
A significant portion of the Company’s accounts receivable and other receivables relates to transactions with related parties (see Note 6 – Related Party Balances and Transactions), resulting in concentrations of credit risk. Management evaluates the collectability of these balances on an ongoing basis by considering the financial condition of counterparties, historical payment experience, contractual terms, and other relevant information.
Previous wording
The Company provides warranties on certain products and recognizes a liability for estimated warranty costs at the time of sale.
Current wording
The Company provides limited warranties on certain products and records an estimated warranty liability at the time the related revenue is recognized.
Previous wording
Warranty liabilities are estimated based on historical claim rates, product failure trends, and estimated repair or replacement costs. These estimates require judgment and may be affected by changes in product design, manufacturing quality, or customer usage patterns. Actual warranty costs may differ from estimates, resulting in adjustments in future periods.
Current wording
Warranty liabilities are estimated based on historical claims experience, product failure trends, expected repair or replacement costs, and other relevant factors. These estimates require significant judgment and are subject to change as additional information becomes available. Actual warranty costs may differ from management’s estimates due to changes in product design, manufacturing quality, customer usage patterns, or other factors, and such differences are recognized in the period in which they become known.
Previous wording
Historically, the Company consolidated certain VIEs that held e-commerce platform accounts. In December 2025, the Company terminated the underlying contractual arrangements and deconsolidated these entities (see Note 1). As of March 31, 2026, the Company does not consolidate these entities.
Current wording
Historically, the Company consolidated certain VIEs that operated e-commerce platform accounts. In December 2025, the Company terminated the contractual arrangements that established its controlling financial interest in those entities and deconsolidated the VIEs. As of June 30, 2026, the Company no longer consolidates those entities, and management has concluded that no additional entities require consolidation under ASC 810.
Previous wording
The evaluation of VIE relationships requires judgment, particularly in assessing contractual arrangements and decision-making authority. Changes in such arrangements or in the Company’s level of involvement could result in future consolidation or deconsolidation.
Current wording
The evaluation of VIE relationships requires significant judgment, particularly in assessing contractual arrangements, decision-making authority, and the Company’s economic interests in an entity. Changes in contractual arrangements, ownership interests, or the Company’s level of involvement could require a reassessment of consolidation conclusions in future reporting periods.
Previous wording
The Company engages in transactions with related parties, including revenue-sharing arrangements and product sourcing (see Note 6).
Current wording
The Company engages in transactions with related parties in the ordinary course of business, including product sales, procurement activities, revenue-sharing arrangements, and other operating transactions (see Note 6 – Related Party Balances and Transactions).
Previous wording
The Company evaluated the FPA and determined that it is appropriately accounted for as an equity transaction. Accordingly, the outstanding balance is presented as a reduction to additional paid-in capital within stockholders’ equity.
Current wording
As of June 30, 2026, the FPA subscription receivable remained $1,678,678, unchanged from December 31, 2025. The Company continues to account for the FPA as an equity transaction. Accordingly, the outstanding subscription receivable is presented as a reduction of additional paid-in capital within stockholders’ equity.
Previous wording
The Company accounts for income taxes under ASC 740,Income Taxes, which requires recognition of deferred tax assets and liabilities for temporary differences between financial reporting and tax bases.
Current wording
The Company accounts for income taxes in accordance with ASC 740,Income Taxes, which requires the recognition of deferred tax assets and liabilities for temporary differences between the financial reporting and tax bases of assets and liabilities.
Previous wording
Management evaluates the realizability of deferred tax assets, including net operating loss carryforwards, and establishes a valuation allowance when it is more likely than not that such assets will not be realized.
Current wording
Management evaluates the realizability of deferred tax assets, including net operating loss carryforwards, and records a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized.
Previous wording
Changes in these assumptions could result in adjustments to valuation allowances and income tax expense.
Current wording
Changes in these assumptions could result in adjustments to deferred tax assets, valuation allowances, and income tax expense in future reporting periods.
Previous wording
As of March 31, 2026, the Company does not have any material off-balance sheet arrangements as defined under Item 303 of Regulation S-K.
Current wording
As of June 30, 2026, the Company did not have any material off-balance sheet arrangements, as defined in Item 303(b)(1) of Regulation S-K.
Previous wording
Historically, the Company utilized variable interest entities (“VIEs”) to conduct certain e-commerce operations. These VIEs were consolidated in prior periods; however, following the termination of the underlying contractual arrangements in December 2025, the Company deconsolidated these entities. As a result, the Company does not have exposure to the assets, liabilities, or operations of these entities, other than any residual contractual relationships, which are not material.
Current wording
Historically, the Company consolidated certain VIEs used in connection with its e-commerce operations. Following the termination of the underlying contractual arrangements in December 2025, the Company deconsolidated those entities. As of June 30, 2026, the Company has no material exposure to the assets, liabilities, or operations of those former VIEs other than ordinary-course contractual relationships, which management does not consider material.
Previous wording
The Company is exposed to certain market risks in the normal course of business, including foreign currency risk, interest rate risk, and general economic risk.
Current wording
The Company is exposed to certain market risks in the ordinary course of business, including foreign currency risk, interest rate risk, concentration risk, and general economic conditions.
Previous wording
The Company’s exposure to interest rate risk is limited due to the absence of significant interest-bearing debt. Interest income is earned on cash balances, and changes in interest rates may affect the amount of interest income recognized. However, this exposure is not considered material.
Current wording
The Company’s exposure to interest rate risk is limited because it has no significant interest-bearing debt outstanding. Interest income is earned on cash and cash equivalents balances, and changes in market interest rates may affect future interest income. Management does not believe that interest rate risk is material to the Company’s financial position or results of operations.
Previous wording
A hypothetical 10% change in foreign exchange rates would not have a material impact on the Company’s financial position based on current exposure levels; however, this may change as the Company expands its international operations.
Current wording
Management believes that a hypothetical 10% change in foreign currency exchange rates would not have a material impact on the Company’s financial position, results of operations, or cash flows based on its current level of foreign currency exposure.
Previous wording
The Company’s operations are subject to the impact of inflation and broader economic conditions, which may affect both costs and demand.
Current wording
The Company’s business is subject to the effects of inflation and broader macroeconomic conditions, which may affect both operating costs and customer demand.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
There were no material changes to the terms or accounting treatment of the FPA during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
This evaluation requires significant judgment regarding: