XMax Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
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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
XMAX$5.33+6.6%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 2026-05-15.
0001493152-26-023861
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.
0001493152-26-038444
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 146 previous paragraphs and 181 current paragraphs.
100 unchanged; 39 reworded; 34 added; 7 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 4 previous and 9 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 (34)
Current report
On December 8, 2025, Preamble X Capital I entered into a separate Subscription Agreement with a separate fund to subscribe certain interest of such fund for an amount of $5,400,000, which will be used by such fund to purchase shares of common stock of xAI.
Current report
On December 16, 2025, Xmax Beta entered into a Subscription Agreement (the “Agreement”) with Preamble X Capital I, a series of Preamble X Capital LLC, a Delaware Limited Liability Company. Pursuant to the Agreement, Xmax Beta made an additional subscription in an aggregate amount of US$5,375,000 (the “Subscription Amount”), thereby increasing Xmax Beta’s interest in Preamble X Capital I to approximately 99.9%.
Current report
On December 18, 2025, Preamble X Capital I entered into a Subscription Agreement with a certain fund to subscribe certain interest of such fund for an amount of $5,400,000, which will be used by such fund to purchase shares of xAI.
Current report
On April 1, 2026, the Company incorporated XMax AI Inc. in the State of Nevada. On June 4, 2026, the Company incorporate Elonx AI Holdings PTE. LTD in Singapore (“Elonx AI”). Both subsidiaries’ primary business is the provision of enterprise AI infrastructure and Model-as-a-Service (MaaS) solutions, enabling businesses to integrate large language model capabilities into their core operations through cloud-based inference APIs. Their services include enterprise AI APIs, technical support, and AI infrastructure for applications such as intelligent customer service, knowledge management, workflow automation, AI agents, long-context retrieval-augmented generation (RAG), AI coding assistants, multimodal content generation, and AI-powered research and search. Revenues are generated based on customers’ actual compute usage, and the Company does not engage in token trading, exchange, or market-making activities.
Current report
On May 28, 2026, the Company entered into Securities Purchase Agreements (the “Agreements”) with certain non-U.S. investors identified on the signature pages thereto (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers in a private placement for a total of 486,500 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $7.347 per share for an aggregate offering price of $3,574,315.50 (the “Private Placement”). In addition, without the prior written consent of the Company, the Purchasers shall not, during the period commencing on the date of the Agreements and ending 18 months after such date (the “Lock-Up”) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares, with respect to which such Purchaser has the power of disposition. The Private Placement was completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.
Current report
On July 1, 2026, the Company entered into Securities Purchase Agreements (the “Agreements”) with certain non-U.S. investors identified on the signature pages thereto (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers in a private placement for a total of 434,600 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $8.454 per share for an aggregate offering price of $3,674,108.40 (the “Private Placement”). In addition, without the prior written consent of the Company, the Purchasers shall not, during the period commencing on the date of the Agreements and ending 18 months after such date (the “Lock-Up”) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares, with respect to which such Purchaser has the power of disposition. The Private Placement was completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.
Current report
On July 6, 2026, Xmax Beta Holdings Ltd. (the “Company”) entered into a Subscription Agreement (the “Agreement”) with Preamble X Capital I, a series of Preamble X Capital LLC, a Delaware Limited Liability Company. Pursuant to the Agreement, the Company made additional subscription in an aggregate amount of US$8,770,000 (the “Subscription Amount”), which increases the Company’s interest in Preamble X Capital I to more than 99.9%. Allocations Fund Administration, LLC is the administrative manager of Preamble X Capital I. The applicable management fee percentage for the Company is 0%. On July 7, 2026, the Company completed the subscription.
Current report
On July 17, 2026, Xmax Beta Holdings Ltd. (the “Company”) entered into a Subscription Agreement (the “Agreement”) with Preamble X Capital I, a series of Preamble X Capital LLC, a Delaware Limited Liability Company. Pursuant to the Agreement, the Company made additional subscription in an aggregate amount of US$8,320,000 (the “Subscription Amount”), which increases the Company’s interest in Preamble X Capital I to more than 99.9%. Allocations Fund Administration, LLC is the administrative manager of Preamble X Capital I. The applicable management fee percentage for the Company is 0%. On July 17, 2026, the Company completed the subscription.
Current report
On July 17, 2026, Preamble X Capital I entered into a Subscription Agreement with a private investment fund (the “Fund”). Pursuant to the agreement, Preamble X Capital I subscribed for approximately 48% interests in the Fund for an aggregate amount of $8,000,000 (the “Transaction”). The Fund Manager intends to invest, indirectly, substantially all of its investable assets in shares of common or preferred stock of Figure AI Inc., a Delaware corporation. On July 22, 2026, Preamble X Capital I completed the Transaction.
Current report
In its interim financial statements, the Company follows the guidance in ASC 270 “Interim reporting” and ASC 740 “Income Taxes” whereby the Company utilizes the expected annual effective rate in determining its income tax provision. The income tax expense for the six and three months ended June 30, 2026 is $7,809,615, and is mainly attributable to deferred tax expense recognized on the unrealized gain in the Preamble investment. The income tax benefit for the six and three months ended June 30, 2025 is $63,257 and $997, respectively, and is mainly due to true up the tax deduction wrote off Jade mts for inventory impairment over the prior years in Nova Malaysia.
Current report
The Company derives its revenues primarily from two business segments to (i) sales of residential and commercial furniture, and (ii) provide API-based (Application Programming Interface) services.
Current report
Sales of residential and commercial furniture
Current report
API-based services revenue
Current report
API-based service revenue primarily consists of service income from providing via our recently deployed AI platform, enabling the customer to integrate, distribute, and commercialize these capabilities globally under its own branding. Our platform supports high availability and scalable deployment, enabling customers to efficiently integrate advanced AI capabilities into their commercial applications. The Company acts as the principal in these arrangements as it maintains control over the platform, establishes pricing, and bears the primary responsibility for service fulfillment. Transaction prices are determined based on the total consideration specified in the contracts, net of any volume discounts or price concessions.
Current report
The Company offers these services through two primary billing models: (1) a usage-based (post-paid) model, where customers are billed based on actual monthly API consumption, and (2) a prepaid model, where customers purchase usage limits upfront. For the prepaid model, upfront payments are initially recorded as deferred revenue (contract liabilities). Under both models, revenue is recognized over time as the underlying API services are continuously rendered and consumed by the customer. Pursuant to certain contract terms, upon contract expiration or early termination, any unearned remaining balance of customer deposits is calculated and refunded to the customer within the timeframe specified in the applicable contract.
Current report
Disaggregation of Revenue
Current report
The following table provides information about disaggregated revenue by product or service type:
Current report
During three months ended June 30, 2026, our API-based service revenue was $1.10 million, an increase of 100% from nil million for the same period of 2025. The increase in the service revenue mainly due to we launched our API platform and provided API-based service to our customers in June 2026.
Current report
The following table presents our costs of revenues by products and services provided as percentage of total cost of revenues for the periods presented.
Current report
Cost of sales consists of costs of finished goods and materials purchased from third-party manufacturers and API-based fee. Total cost of sales increased by 29% or $0.37 million to $1.64 million for the three months ended June 30, 2026, compared to $1.27 million for the same period of 2025. Cost of sales as a percentage of sales increased to 60% for the three months ended June 30, 2026, compared to 50% for the same period of 2025. The increase in cost of sales in dollar term and in cost of sales as a percentage of sales are a result of expanding new AI business to our customers. Our API-based fee was increased 100% to $1.20 million from nil in the same period of 2025. Our API-based fee was occupied 73% of our total cost of sales for the three months ended June 30, 2026, compared with 0% for the same period of 2025.
Current report
Income Tax (expense) Benefit
Current report
Comparison of Six Months Ended June 30, 2026 and 2025
Current report
Sales
Current report
During six months ended June 30, 2026, our API-based service revenue was $1.10 million, an increase of 100% from nil million for the same period of 2025. The increase in the service revenue mainly due to we launched our API platform and provided API-based service to our customers in June 2026.
Current report
Cost of Sales
Current report
The following table presents our costs of revenues by products and services provided as percentage of total cost of revenues for the periods presented.
Current report
Gross Profit
Current report
Gross profit was $1.97 million for the six months ended June 30, 2026, compared to $2.49 million for the same period of 2025, representing a decrease in gross profit of $0.52 million. Our gross profit margin was 44% for the six months ended June 30, 2026, compared to 48% for the same period of 2025. The gross profit, excluding API-based service revenue, was $2.07 million for the six months ended June 30, 2026, compared to $2.49 million for the same period of 2025, representing a decrease in gross profit of $0.42 million. Our gross profit margin, excluding API-based service revenue, was 61% for the six months ended June 30, 2026, compared to 48% for the same period of 2025. The decrease in gross profit in dollar term was mainly due to a result of less sales. The increase in gross profit in percentage was mainly due to selling more products with higher profit margin.
Current report
Operating Expenses
Current report
Operating expenses consisted of selling, general and administrative expenses, and research and development. Operating expenses were $3.73 million for the six months ended June 30, 2026, compared to $2.88 million for the same period of 2025. Selling expenses increased by 4%, or $0.02 million, to $0.66 million for the six months ended June 30, 2026, from $0.64 million for the same period of 2025, primarily due to increased marketing and advertising expenses. Also, general and administrative expenses increased by 37%, or $0.82 million, to $3.07 million for the six months ended June 30, 2026, from $2.24 million for the same period of 2025, primarily due to an increase in cloud service fee of $0.40 million, filing fee of $0.07 million and legal and professional fee of $0.21 million, while the decrease was partially offset by a decrease in consulting fee of $0.18 million and auditing fee of $0.06 million.
Current report
Other Income (Expenses), Net
Current report
Income Tax (Expense) Benefit
Current report
Income tax (expense) benefit was ($7.81 million) and $63,257 for the six months ended June 30, 2026 and 2025, respectively. The income tax expense for the six months ended June 30, 2026 was mainly attributable to deferred tax expense recognized on unrealized gain of $42.92 million in the Preamble investment for the six months ended June 30, 2026.
Current report
Net Income (Loss)
Removed paragraphs (7)
Previous report
We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling expenses on our unaudited consolidated statements of operations.
Previous report
Segment Reporting
Previous report
An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.
Previous report
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s revenue segments have similar economic characteristics and they are managed as a single business unit. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company has determined that there is only one reportable operating segment.
Previous report
We concluded that we had one reportable segment under ASC 280 because Diamond Bar is a furniture distributor based in California focusing on customers in the US. Each of our subsidiaries is operated under the same senior management of our company, and we view the operations of Diamond Bar as a whole for making business decisions. Our long-lived assets are mainly property, plant and equipment located in the United States.
Previous report
Sales to customers by geographic area are determined by reference to the physical product shipment delivery locations requested by our customers. For example, if the products are delivered to a customer in the U.S., the sales are recorded as generated in the U.S.; if the customer directs us to ship its products to China, the sales are recorded as sold in China.
Previous report
Income Tax Benefit (Expense)
Reworded paragraphs (39)
Previous wording
s Discussion and Analysis of Financial Condition and Results of Operations
Current wording
Item 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations
Previous wording
The following discussion and analysis are based upon our financial statements as of the dates and for the periods presented in this section. You should read this discussion and analysis in conjunction with the financial statements and notes thereto found in Part I, Item 1 of this Form 10-Q and our consolidated financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). All references to the first quarter and first three months of 2026 and 2025 mean the three-month periods ended March 31, 2026 and 2025. In addition to historical information, the following discussion and other parts of this report contain certain forward-looking information. When used in this discussion, the words, “believes,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from projected results, due to a number of risks, uncertainties and factors beyond our control. We do not undertake to publicly update or revise any of these forward-looking statements, even if experience or future changes show that the indicated results or events will not be realized. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Readers also are urged to carefully review and consider our discussions regarding the various factors that affect the company’s business, which are described in this section and elsewhere in this report. For more information, see our discussion of risk factors located at Part I, Item 1A of our 2025 Form 10-K.
Current wording
The following discussion and analysis are based upon our financial statements as of the dates and for the periods presented in this section. You should read this discussion and analysis in conjunction with the financial statements and notes thereto found in Part I, Item 1 of this Form 10-Q and our consolidated financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). All references to the second quarter and first six months of 2026 and 2025 mean the three-month periods ended June 30, 2026 and 2025. In addition to historical information, the following discussion and other parts of this report contain certain forward-looking information. When used in this discussion, the words, “believes,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from projected results, due to a number of risks, uncertainties and factors beyond our control. We do not undertake to publicly update or revise any of these forward-looking statements, even if experience or future changes show that the indicated results or events will not be realized. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Readers also are urged to carefully review and consider our discussions regarding the various factors that affect the company’s business, which are described in this section and elsewhere in this report. For more information, see our discussion of risk factors located at Part I, Item 1A of our 2025 Form 10-K.
Previous wording
The Company’s brand family currently includes XMAX, Nova LifeStyle, Diamond Sofa (www.diamondsofa.com) and Nova Living.
Current wording
The Company’s brand family currently includes XMAX, XMAX AI, Nova LifeStyle, Diamond Sofa (www.diamondsofa.com) and Nova Living.
Previous wording
We are a U.S. holding company with no material assets in the U.S. other than the ownership interests of our wholly owned subsidiaries through which we market, design and sell residential and commercial furniture and provide AI software and platform-based services. Our subsidiaries include Nova Furniture Limited domiciled in the British Virgin Islands (“Nova Furniture”), Nova Furniture Ltd. domiciled in Samoa (“Nova Samoa”), Diamond Bar Outdoors, Inc. domiciled in California (“Diamond Bar”), Nova Living (M) SDN. BHD. domiciled in Malaysia (“Nova Malaysia”), Nova Living (HK) Group Limited domiciled in Hong Kong (“Nova HK”). We also have a wholly owned subsidiaries Xmax AI Inc. incorporated in Nevada and Xmax Capital Ltd. domiciled in Samoa and its wholly owned subsidiaries Xmax Alpha Holdings Ltd. (the “Xmax Alpha”), Xmax Beta Holdings Ltd., Xmax Delta Holdings Ltd. and Xmax Sigma Holdings Ltd., all domiciled in the Cayman Islands. The Company had three former subsidiaries Bright Swallow International Group Limited domiciled in Hong Kong (“Bright Swallow” or “BSI”) which was sold in January 2020, and Nova Furniture Macao Commercial Offshore Limited domiciled in Macao (“Nova Macao”) which was de-registration and liquidation in January 2021. In February 2022, Nova HK entered a de-registration process and transferred all its assets and business to Nova Malaysia. The process of de-registration and liquidation of Nova HK was completed in February 2023.
Current wording
We are a U.S. holding company with no material assets in the U.S. other than the ownership interests of our wholly owned subsidiaries through which we market, design and sell residential and commercial furniture and provide AI software and platform-based services. Our subsidiaries include Nova Furniture Limited domiciled in the British Virgin Islands (“Nova Furniture”), Nova Furniture Ltd. domiciled in Samoa (“Nova Samoa”), Diamond Bar Outdoors, Inc. domiciled in California (“Diamond Bar”), Nova Living (M) SDN. BHD. domiciled in Malaysia (“Nova Malaysia”), Nova Living (HK) Group Limited domiciled in Hong Kong (“Nova HK”). We also have a wholly owned subsidiaries Xmax AI Inc. incorporated in Nevada and its wholly owned subsidiary Elonx AI Holdings PTE. LTD. domiciled in Singapore (“Elonx AI”), and Xmax Capital Ltd. domiciled in Samoa and its wholly owned subsidiaries Xmax Alpha Holdings Ltd. (the “Xmax Alpha”), Xmax Beta Holdings Ltd., Xmax Delta Holdings Ltd. and Xmax Sigma Holdings Ltd., all domiciled in the Cayman Islands. The Company had three former subsidiaries Bright Swallow International Group Limited domiciled in Hong Kong (“Bright Swallow” or “BSI”) which was sold in January 2020, and Nova Furniture Macao Commercial Offshore Limited domiciled in Macao (“Nova Macao”) which was de-registration and liquidation in January 2021. In February 2022, Nova HK entered a de-registration process and transferred all its assets and business to Nova Malaysia. The process of de-registration and liquidation of Nova HK was completed in February 2023.
Previous wording
We do not have access to a revolving credit facility. On May 4, 2020, the Company received loan proceeds in the amount of approximately $139,802 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. On May 5, 2020, Diamond Bar Outdoors Inc. (“Diamond Bar”) was granted a loan from Cathay Bank in the aggregate amount of $176,294, pursuant to the Paycheck Protection Program. On June 19, 2020, Diamond Bar was granted a U.S. Small Business Administration (SBA) loan in the aggregate amount of $150,000, pursuant to the Economic Injury Disaster Loan. During the fiscal year of 2025, the Company completed three private placements for gross proceeds of $500,000, a public offering for proceeds of $9 million, two registered direct offerings for approximately $19 million and a convertible note financing for $5 million. The Company also repaid $217,000 debt with its shares of common stock, $6,503 to director and $3,441 to SBA loan for the year ended December 31, 2025. During the first quarter of 2026, the Company also made one registered direct offering for approximately $36 million and one private placement for approximately $7 million. We currently believe that our financial resources will be adequate to finance our operations in the next 12 months. However, in the event that we do need to raise capital in the future, the instability in the securities markets could adversely affect our ability to raise additional capital.
Current wording
We do not have access to a revolving credit facility. On May 4, 2020, the Company received loan proceeds in the amount of approximately $139,802 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. On May 5, 2020, Diamond Bar Outdoors Inc. (“Diamond Bar”) was granted a loan from Cathay Bank in the aggregate amount of $176,294, pursuant to the Paycheck Protection Program. On June 19, 2020, Diamond Bar was granted a U.S. Small Business Administration (SBA) loan in the aggregate amount of $150,000, pursuant to the Economic Injury Disaster Loan. During the fiscal year of 2025, the Company completed three private placements for gross proceeds of $500,000, a public offering for proceeds of $9 million, two registered direct offerings for approximately $19 million and a convertible note financing for $5 million. The Company also repaid $217,000 debt with its shares of common stock, $6,503 to director and $3,441 to SBA loan for the year ended December 31, 2025. During the first quarter of 2026, the Company also made one registered direct offering for approximately $36 million and one private placement for approximately $7 million. During the second quarter of 2026, the Company made three private placements for approximately $37.6 million. We currently believe that our financial resources will be adequate to finance our operations in the next 12 months. However, in the event that we do need to raise capital in the future, the instability in the securities markets could adversely affect our ability to raise additional capital.
Previous wording
On April 1, 2026, the Company incorporated XMax AI Inc. in the State of Nevada. On April 6, 2026, XMax AI Inc. (“XMax AI”) entered into an AI Inference Platform Deployment and Service Agreement (the “Agreement”) with Cloud Alliance Inc. (the “Service Provider”), effective as of April 1, 2026. Pursuant to the Agreement, the Service Provider will develop and deploy an AI inference platform (“Platform”) to the Amazon Web Services (AWS) cloud environment designated by the Company for a total fixed service fee of US$400,000.
Current wording
On April 6, 2026, XMax AI Inc. (“XMax AI”) entered into an AI Inference Platform Deployment and Service Agreement (the “Agreement”) with Cloud Alliance Inc. (the “Service Provider”), effective as of April 1, 2026. Pursuant to the Agreement, the Service Provider will develop and deploy an AI inference platform (“Platform”) to the Amazon Web Services (AWS) cloud environment designated by the Company for a total fixed service fee of US$400,000.
Previous wording
The core focus of the Company’s furniture business today is entirely centered on our products, identifying a fashion-driven generational shift in the general perception and consumption of furniture, being more aware of actual consumer tastes and how best to fulfil and engage that need, and closely integrating product development alongside marketing results in appealing products that adheres to the scope of our target demographic of decision makers in the design, staging and retail fields. A process that is continually refined upon each release cycle, maintaining a singular, cohesive vision. In short, we have better identified our customers and how to cater to them – in the process gaining greater traction with every product launch considerably more so on an international level than ever previous. In addition, we have been developing AI software and platform-based services to provide our customers access to XMax’s artificial intelligence models through API-based (Application Programming Interface) services. These services are provided via our recently deployed AI platform, enabling the customer to integrate, distribute, and commercialize these capabilities globally under its own branding. Our platform supports high availability and scalable deployment, enabling customers to efficiently integrate advanced AI capabilities into their commercial applications. We believe these new strategies will provide us with significant long-term growth opportunities.
Current wording
The core focus of the Company’s furniture business today is entirely centered on our products, identifying a fashion-driven generational shift in the general perception and consumption of furniture, being more aware of actual consumer tastes and how best to fulfil and engage that need, and closely integrating product development alongside marketing results in appealing products that adheres to the scope of our target demographic of decision makers in the design, staging and retail fields. A process that is continually refined upon each release cycle, maintaining a singular, cohesive vision. In short, we have better identified our customers and how to cater to them – in the process gaining greater traction with every product launch considerably more so on an international level than ever previous. In addition, we have been developing AI software and platform-based services to provide our customers access to XMax’s artificial intelligence models through API-based (Application Programming Interface) services. These services are provided via our recently deployed AI platform, enabling the customer to integrate, distribute, and commercialize these capabilities globally under its own branding. Our platform supports high availability and scalable deployment, enabling customers to efficiently integrate advanced AI capabilities into their commercial applications. We believe these new strategies have provided new revenues and will continue to provide us with significant long-term growth opportunities.
Previous wording
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for XMax Inc. and its subsidiaries, Diamond Bar, i Design, Nova BVI, Nova Samoa, Nova Malaysia and XMax Capital and its subsidiaries.
Current wording
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for XMax Inc. and its subsidiaries, Diamond Bar, i Design, Nova BVI, Nova Samoa, Nova Malaysia, XMax AI, Inc. Elonx AI, and XMax Capital and its subsidiaries.
Previous wording
We maintained an allowance for expected credit loss of $379 and $258 as of March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026 and 2025, expected credit losses provision was $121 and $287, respectively. As of March 31, 2026, we had gross receivable of $2,457,617 of which $2,424,846 was over 90 days past due.
Current wording
We maintained an allowance for expected credit loss of $343 and $258 as of June 30, 2026 and December 31, 2025, respectively. During the six months ended June 30, 2026 and 2025, expected credit losses provision was $85 and ($6), respectively; and $($36) and ($293) for the three months ended June 30, 2026 and 2025. As of June 30, 2026, we had gross receivable of $2,454,042 of which $2,419,747 was over 90 days past due.
Previous wording
XMax Inc. (formerly Nova Lifestyle, Inc.) and Diamond Bar are subject to U.S. federal and state income taxes. Nova BVI was incorporated in the BVI, Nova Samoa and Xmax Capital was incorporated in Samoa. Xmax Alpha Holdings Ltd, Xmax Beta Holdings Ltd, Xmax Delta Holdings Ltd and Xmas Sigma Holdings Ltd were incorporated in Caymen Island. There is no income tax for companies domiciled in the BVI, Cayman Islands and Samoa. Accordingly, the Company’s unaudited condensed consolidated financial statements do not present any income tax provisions related to the BVI, Cayman Islands and Samoa tax jurisdictions where Nova BVI, Nova Samoa, Xmax Capital, Xmax Alpha Holdings Ltd, Xmax Beta Holdings Ltd, Xmax Delta Holdings Ltd and Xmax Sigma Holdings Ltd are domiciled. Nova Malaysia is incorporated in Malaysia and ceased business operations. Nova Malaysia completed its de-registration with the Malaysian government in the first quarter of 2026.
Current wording
XMax Inc. (formerly Nova Lifestyle, Inc.), Diamond Bar Outdoors, Inc. (“Diamond Bar”), and XMax AI Inc. are subject to U.S. federal and state income taxes. Nova Furniture Limited was incorporated in the British Virgin Islands; Nova Furniture Ltd. and Xmax Capital Ltd. were incorporated in Samoa; and Xmax Alpha Holdings Ltd., Xmax Beta Holdings Ltd., Xmax Delta Holdings Ltd., and Xmax Sigma Holdings Ltd. were incorporated in the Cayman Islands. There is no income tax for companies domiciled in the British Virgin Islands, Samoa, or the Cayman Islands. Accordingly, the Company’s consolidated financial statements do not present any income tax provision related to the British Virgin Islands, Samoa, or Cayman Islands tax jurisdictions where these entities are domiciled. Elonz AI Holdings Pte. Ltd. was incorporated in Singapore during the second quarter of 2026 and is subject to Singapore corporate income tax. Accordingly, the Company records a Singapore income tax provision, when applicable. Nova Living Ltd. was incorporated in Malaysia and ceased business operations; the entity completed its de-registration with the Malaysian government in the first quarter of 2026.
Previous wording
The Tax Cuts and Jobs Act of 2017 also amended IRC Section 174 to require specified research and experimental expenditures to be capitalized and amortized for tax years beginning after December 31, 2021. The One Big Beautiful Bill Act subsequently restored current expensing for domestic research and experimental expenditures paid or incurred in tax years beginning after December 31, 2024, while foreign research and experimental expenditures remain subject to capitalization and amortization over 15 years. For the three months ended March 31, 2026, the Company expensed current-year U.S. research and experimental expenditures for federal income tax purposes. The Company did not elect to accelerate the deduction of unamortized domestic research and experimental expenditures from prior years and continues to amortize such amounts over the remaining applicable amortization period. Since the Company’s research and experimental expenditures were incurred within the United States and the amount is immaterial, the Company does not anticipate a material impact to its income tax provision.
Current wording
The Tax Cuts and Jobs Act of 2017 also amended IRC Section 174 to require specified research and experimental expenditures to be capitalized and amortized for tax years beginning after December 31, 2021. The One Big Beautiful Bill Act subsequently restored current expensing for domestic research and experimental expenditures paid or incurred in tax years beginning after December 31, 2024, while foreign research and experimental expenditures remain subject to capitalization and amortization over 15 years. For the six months ended June 30, 2026, the Company expensed current-year U.S. research and experimental expenditures for federal income tax purposes. The Company did not elect to accelerate the deduction of unamortized domestic research and experimental expenditures from prior years and continues to amortize such amounts over the remaining applicable amortization period. Since the Company’s research and experimental expenditures were incurred within the United States and the amount is immaterial, the Company does not anticipate a material impact to its income tax provision.
Previous wording
As of March 31, 2026 and December 31, 2025, the accumulated undistributed earnings generated by its foreign subsidiaries were approximately $21.7 million and $21.7 million of which substantially all was previously subject to U.S. tax, the one-time transition tax on foreign unremitted earnings required by the Tax Act, GILTI, or NCTI, as applicable. Those earnings are considered to be permanently reinvested and accordingly, no deferred tax expense is recorded for U.S. federal and state income tax or applicable withholding taxes.
Current wording
As of June 30, 2026 and December 31, 2025, the accumulated undistributed earnings generated by its foreign subsidiaries were approximately $21.8 million and $21.7 million of which substantially all was previously subject to U.S. tax, the one-time transition tax on foreign unremitted earnings required by the Tax Act, GILTI, or NCTI, as applicable. Those earnings are considered to be permanently reinvested and accordingly, no deferred tax expense is recorded for U.S. federal and state income tax or applicable withholding taxes.
Previous wording
As of March 31, 2026, unrecognized tax benefits were approximately $0. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $0 as of March 31, 2026. As of March 31, 2025, unrecognized tax benefits were approximately $0. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $0 as of March 31, 2025.
Current wording
As of June 30, 2026, unrecognized tax benefits were approximately $0. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was nil as of June 30, 2026. As of June 30, 2025, unrecognized tax benefits were approximately $0. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was nil as of June 30, 2025.
Previous wording
A reconciliation of unrecognized tax benefits excluding interest and penalties (“Gross UTB”) for the three months ended March 31, 2026 and 2025, is as follows:
Current wording
A reconciliation of unrecognized tax benefits excluding interest and penalties (“Gross UTB”) for the six months ended June 30, 2026 and 2025, is as follows:
Previous wording
As of March 31, 2026 and December 31, 2025, the Company had cumulatively accrued approximately $0 and $0 for estimated interest and penalties related to unrecognized tax benefits. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax (benefit)/expense, which totaled $0 and $0 for the three months ended March 31, 2026 and 2025, respectively; and $0 and $0 for the three months ended March 31, 2025, and 2024, respectively, related to the Company’s continuing operations. The Company does not anticipate any significant changes to its unrecognized tax benefits within the next 12 months.
Current wording
As of June 30, 2026 and December 31, 2025, the Company had cumulatively accrued approximately nil and nil for estimated interest and penalties related to unrecognized tax benefits. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax (benefit)/expense, which totaled nil and nil for the six months ended June 30, 2026 and 2025, respectively; and nil and nil for the three months ended June 30, 2026, and 2025, respectively, related to the Company’s continuing operations. The Company does not anticipate any significant changes to its unrecognized tax benefits within the next 12 months.
Previous wording
XMax Inc. (formerly Nova Lifestyle) and Diamond Bar are subject to U.S. federal and state income taxes and tax years 2020-2024 remain open to examination by tax authorities in the U.S.
Current wording
XMax Inc. (formerly Nova Lifestyle, Inc.), Diamond Bar, XMax AI and I Design are subject to U.S. federal and state income taxes and tax years 2020-2024 remain open to examination by tax authorities in the U.S.
Previous wording
We recognize revenues when our customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. We recognize revenues following the five step model prescribed under ASU No. 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
Current wording
The Company recognizes revenues when its customers obtain control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASC-606: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
Previous wording
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to our customer.
Current wording
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer.
Previous wording
Our sales policy allows for the return of product within the warranty period if the product is defective and the defects are our fault. As alternatives for the product return option, the customers have the option of asking us for a discount for products with quality issues, or of receiving replacement parts from us at no cost. The amount of reserves for return of products, the discount provided to the customers, and cost for the replacement parts were immaterial for the three months ended March 31, 2026 and 2025.
Current wording
The Company’s sales policy allows for product returns within the warranty period if the product is defective and the defects are the Company’s fault. As alternatives to the product return option, the customers have the option of requesting a discount from the Company for products with quality issues or of receiving replacement parts from the Company at no cost. The amount for product returns, the discount provided to the Company’s customers, and the costs for replacement parts were immaterial for the three months ended June 30, 2026 and 2025.
Previous wording
The accompanying unaudited consolidated financial statements are presented in United States Dollar (“$” or “USD”), which is also the functional currency of XMax Inc. (formerly Nova LifeStyle, Inc.), XMax Capital, XMax Alpha, XMax Beta, Nova Furniture, Nova Samoa, Diamond Bar, and i Design.
Current wording
The accompanying consolidated financial statements are presented in United States Dollar (“$” or “USD”), which is also the functional currency of XMAX (Nova LifeStyle), Nova Furniture, Nova Samoa, Diamond Bar, XMax AI, Elonx AI, I Design, Xmax Capital, Xmax Alpha Holdings Ltd, Xmax Beta Holdings Ltd, Xmax Delta Holdings Ltd and Xmax Sigma Holdings Ltd.
Previous wording
The Company’s subsidiary with operations in Malaysia uses its local currency, Malaysian Ringgit (“RM”), as its functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates, which is normally the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements.
Current wording
The Company’s subsidiaries with operations in Singapore and Malaysia use their local currency, the Singapore Doller (“SGD”) and Malaysian Ringgit (“RM”), as their functional currency. The entities’ functional currencies are the currency of the primary economic environment in which they operate, which are the currencies of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements.
Previous wording
The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in accumulated deficits during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets.
Current wording
The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets.
Previous wording
Gross profit was $0.88 million for the three months ended March 31, 2026, compared to $1.20 million for the same period of 2025, representing a decrease in gross profit of $0.32 million. Our gross profit margin was 50% for the three months ended March 31, 2026, compared to 46% for the same period of 2025. The decrease in gross profit in dollar term was mainly due to a result of less sales. The increase in gross profit in percentage was mainly due to selling more products with higher profit margin.
Current wording
Gross profit was $1.09 million for the three months ended June 30, 2026, compared to $1.28 million for the same period of 2025, representing a decrease in gross profit of $0.19 million. Our gross profit margin was 40% for the three months ended June 30, 2026, compared to 50% for the same period of 2025. The gross profit, excluding API-based service revenue, was $1.19 million for the three months ended June 30, 2026, compared to $1.28 million for the same period of 2025, representing a decrease in gross profit of $0.10 million. Our gross profit margin, excluding API-based service revenue, was 73% for the three months ended June 30, 2026, compared to 50% for the same period of 2025. The decrease in gross profit in dollar term was mainly due to a result of less sales. The increase in gross profit in percentage was mainly due to selling more products with higher profit margin.
Previous wording
Operating expenses consisted of selling, general and administrative expenses, and research and development. Operating expenses were $1.42 million for the three months ended December 31, 2026, compared to $1.40 million for the same period of 2025. Selling expenses increased by 13%, or $0.04 million, to $0.37 million for the three months ended March 31, 2026, from $0.33 million for the same period of 2025, primarily due to increased marketing and advertising expenses. Also, general and administrative expenses decreased by 2%, or $0.02 million, to $1.05 million for the three months ended March 31, 2026, from $1.07 million for the same period of 2025, primarily due to a decrease in accounting and auditing fee of $0.04 million and consulting fee of $0.11 million, while the decrease was partially offset by an increase in legal and professional fee of $0.08 million and travel expense of $0.02 million.
Current wording
Operating expenses consisted of selling, general and administrative expenses, and research and development. Operating expenses were $2.31 million for the three months ended June 30, 2026, compared to $1.48 million for the same period of 2025. Selling expenses decreased by 6%, or $0.02 million, to $0.29 million for the three months ended June 30, 2026, from $0.31 million for the same period of 2025, primarily due to decreased marketing and advertising expenses. Also, general and administrative expenses increased by 72%, or $0.85 million, to $2.02 million for the three months ended June 30, 2026, from $1.17 million for the same period of 2025, primarily due to an increase in cloud service fee of $0.40 million and filing fee of $0.13 million, while the decrease was partially offset by a decrease in auditing fee of $0.04 million, consulting fee of $0.07 million and travel expense of $0.03 million.
Previous wording
Other income, net was $0.73 million for the three months ended March 31, 2026, compared to other expense, net of $0.21 million for the same period of 2025, representing an increase in other income of $0.94 million. The increase in other income was due primarily to an increase in unrealized gain of $0.79 million from the investment in the fund of Preamble.
Current wording
Other income, net was $41.46 million for the three months ended June 30, 2026, compared to other expense, net of $0.09 million for the same period of 2025, representing an increase in other income of $41.55 million. The increase in other income was due primarily to an increase in unrealized gain of $42.12 million from the investment in the fund of Preamble.
Previous wording
Income tax benefit (expense) was $0 and $62,260 for the three months ended March 31, 2026 and 2025, respectively. The income tax benefit for the three months ended March 31, 2026 was mainly due to unrealized gain of $0.79 million is non-taxable income for the three months ended March 31, 2026.
Current wording
Income tax (expense) benefit was ($7.81) million and $997 for the three months ended June 30, 2026 and 2025, respectively. The income tax expense for the three months ended June 30, 2026 was mainly attributable to deferred tax expense recognized on unrealized gain of $42.12 million in the Preamble investment.
Previous wording
As a result of the foregoing, our net income was $0.19 million for the three months ended March 31, 2026, compared to $0.34 million of net loss for the same period of 2025.
Current wording
As a result of the foregoing, our net income was $32.43 million for the three months ended June 30, 2026, compared to $0.29 million of net loss for the same period of 2025.
Previous wording
Sales for the three months ended March 31, 2026 were $1.78 million, a decrease of 32% from $2.64 million for the same period of 2025. This decrease in sales resulted primarily from 36.92% decrease in sales volume, while partially offset by 7.16% increase in average selling price. Our three largest selling product categories for the three months ended March 31, 2026 were sofa, beds and coffee tables, which accounted for approximately 58%, 11% and 10% of sales, respectively. For the three months ended March 31, 2025, the three largest selling categories were sofas, chairs and beds, which accounted for approximately 55%, 10% and 9% of sales, respectively.
Current wording
Sales for the six months ended June 30, 2026 were $4.52 million, a decrease of 13% from $5.19 million for the same period of 2025. Sales, excluding API-based service revenue, for the six months ended June 30, 2026 were $3.42 million, a decrease of 34% from $5.19 million for the same period of 2025. This decrease in sales resulted primarily from 36.10% decrease in sales volume, while partially offset by 3.11% increase in average selling price. Our three largest selling product categories for the six months ended June 30, 2026 were sofa, beds and coffee tables, which accounted for approximately 59%, 11% and 10% of sales, respectively. For the six months ended June 30, 2025, the three largest selling categories were sofas, beds and coffee tables, which accounted for approximately 54%, 13% and 10% of sales, respectively.
Previous wording
The $0.86 million decrease in sales for the three months ended March 31, 2026, compared to the same period of 2025, was mainly due to decreased sales to North America. Sales to North America decreased by 32% to $1.78 million for the three months ended March 31, 2026, compared to $2.62 million for the same period of 2025, such decrease mainly due to decrease in sales volume by 37% from the customers in North America. Sales to other countries decreased by $0.02 million to $1,519 for the three months ended March 31, 2026, from $0.02 million for the same period of 2025, primary due to less sales order received from our customers in other countries.
Current wording
The $1.76 million decrease in sales for the six months ended June 30, 2026, compared to the same period of 2025, was mainly due to decreased sales to North America. Sales to North America decreased by 34% to $3.42 million for the six months ended June 30, 2026, compared to $5.17 million for the same period of 2025, such decrease mainly due to decrease in sales volume by 36% from the customers in North America. Sales to other countries decreased by $0.02 million to $1,519 for the six months ended June 30, 2026, from $0.02 million for the same period of 2025, primary due to less sales order received from our customers in other countries.
Previous wording
Cost of sales consists primarily of costs of finished goods and materials purchased from third-party manufacturers. Total cost of sales decreased by 37% to $0.90 million for the three months ended March 31, 2026, compared to $1.43 million for the same period of 2025. Cost of sales as a percentage of sales decreased to 50% for the three months ended March 31, 2026, compared to 54% for the same period of 2025. The decrease in cost of sales in dollar term and in cost of sales as a percentage of sales are a result of selling more products with higher profit margins.
Current wording
Cost of sales consists of costs of finished goods and materials purchased from third-party manufacturers and API-based fee. Total cost of sales decreased by 6% to $2.55 million for the six months ended June 30, 2026, compared to $2.70 million for the same period of 2025. Cost of sales as a percentage of sales increased to 56% for the six months ended June 30, 2026, compared to 52% for the same period of 2025. The decrease in cost of sales in dollar term is a result of selling more products with higher profit margins. The increase in cost of sales as a percentage of sales is a result of costs of expanding new AI business to our customers. Our API-based fee was increased 100% to $1.20 million from the same period of 2025. Our API-based fee was occupied 47% of our total cost of sales for the six months ended June 30, 2026, compared with 0% for the same period of 2025.
Previous wording
We had working capital of $18,187,987 at March 31, 2026, an increase of $8,798,031 from net working capital of $9,389,956 at December 31, 2025. The ratio of current assets to current liabilities was 12.99-to-1 at March 31, 2026.
Current wording
We had working capital of $45,308,911 at June 30, 2026, an increase of $35,918,955 from net working capital of $9,389,956 at December 31, 2025. The ratio of current assets to current liabilities was 28.80-to-1 at June 30, 2026.
Previous wording
The following is a summary of cash provided by or used in each of the indicated types of activities during the three months ended March 31, 2026 and 2025:
Current wording
The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended June 30, 2026 and 2025:
Previous wording
Net cash used in operating activities was $0.64 million for the three months ended March 31, 2026, a decrease in cash outflow by $0.32 million from $0.32 million of cash used in operating activities for the same period of 2025.
Current wording
Net cash used in operating activities was $4.29 million for the six months ended June 30, 2026, an increase in cash outflow by $4.06 million from $0.23 million of cash used in operating activities for the same period of 2025.
Previous wording
The increase in cash outflow was attributable primarily to (i) a decrease in cash inflow of $0.21 million for inventory to $0.50 million cash inflow for the three months ended March 31, 2026, from $0.72 million cash inflow for the same period of 2025, such decrease in cash inflow being mainly due to we purchased less products from our suppliers due to reciprocal tariff took effective in April 2025; (ii) an increase in cash outflow of $0.26 million for other current assets to $0.08 million cash outflow for the three months ended March 31, 2026, from $0.19 million cash inflow for the same period of 2025, such increase in cash outflow being mainly due to we made prepayments to our service providers. The increase in operating cash outflow was partially offset by (i) increase in cash inflow of $0.25 million of accounts payable to cash outflow of $0.20 million for the three months ended March 31, 2026, from the accounts payable of cash outflow of $0.44 million for the same period of 2025, such increase in cash inflow being mainly due to purchase more products on credits; (ii) increase in cash inflow of $0.13 million of contract liabilities to cash inflow of $0.03 million for the three months ended March 31, 2026, from the contract liabilities of cash outflow of $0.10 million for the same period of 2025, such increase in cash inflow being primarily due to received more deposits from our customers; (iii) increase in cash inflow of $0.14 million of accrued liabilities and other payables to cash outflow of $0.45 million for the three months ended March 31, 2026, from the accrued liabilities and other payables of cash outflow of $0.60 million for the same period of 2025, such increase in cash inflow being primarily due to that we delayed payments to our service provides.
Current wording
The increase in cash outflow was attributable primarily to (i) an increase in cash outflow of $0.75 million for accounts receivable to $0.75 million cash outflow for the six months ended June 30, 2026, from $623 cash inflow for the same period of 2025, such increase in cash outflow being mainly due to our new AI business customers purchased our service on credit; (ii) an decrease in cash inflow of $1.02 million for inventory to $0.23 million cash inflow for the six months ended June 30, 2026, from $1.24 million cash inflow for the same period of 2025, such increase in cash outflow being mainly due to we purchased more products from our suppliers due to we are ready for peak sales season for July and August 2026; (iii) an increase in cash outflow of $1.35 million for other current assets to $1.29 million cash outflow for the six months ended June 30, 2026, from $0.06 million cash inflow for the same period of 2025, such increase in cash outflow being mainly due to we made more prepayments and deposits to our service providers. The increase in operating cash outflow was partially offset by (i) increase in cash inflow of $0.72 million of accounts payable to cash inflow of $0.15 million for the six months ended June 30, 2026, from the accounts payable of cash outflow of $0.57 million for the same period of 2025, such increase in cash inflow being mainly due to purchase more products on credits; (ii) increase in cash inflow of $0.20 million of contract liabilities to cash inflow of $0.13 million for the six months ended June 30, 2026, from the contract liabilities of cash outflow of $0.07 million for the same period of 2025, such increase in cash inflow being primarily due to received more deposits from our customers; (iii) decrease in cash outflow of $0.55 million of accrued liabilities and other payables to cash outflow of $0.08 million for the six months ended June 30, 2026, from the accrued liabilities and other payables of cash outflow of $0.63 million for the same period of 2025, such increase in cash inflow being primarily due to that we delayed payments to our service provides.
Previous wording
Net cash used in investing activities was $8.35 million for the three months ended March 31, 2026, an increase in cash outflow of $8.35 million from $0 million of cash used in investing activities for the same period of 2025. We incurred cash outflow of $5.30 million to loan toa third party and $3.05 million to invest into the funds of Preamble Capital LLC.
Current wording
Net cash used in investing activities was $13.10 million for the six months ended June 30, 2026, an increase in cash outflow of $13.10 million from nil million of cash used in investing activities for the same period of 2025. We incurred cash outflow of $5.30 million to loan to a third party and $7.80 million to invest into the funds of Preamble Capital LLC.
Previous wording
Net cash provided by financing activities was $12.20 million for the three months ended March 31, 2026, compared to $0.28 million for the same period of 2025. During the three months ended March 31, 2026, we issued stocks to investors with the net proceeds of $12.20 million. During the three months ended March 31, 2025, we sold one million shares of common stock with the proceeds of $0.50 million for our working capital, while we paid off one of loans from shareholder by issued 434,000 shares of our common stocks which was equivalent in the value of $0.22 million.
Current wording
Net cash provided by financing activities was $45.30 million for the six months ended June 30, 2026, compared to $0.48 million for the same period of 2025. During the six months ended June 30, 2026, we issued stocks to investors with the net proceeds of $45.71 million, while we paid off $0.40 million to loans from a shareholder. During the six months ended June 30, 2025, we sold one million shares of common stock with the proceeds of $0.50 million for our working capital and borrowed $0.20 million loan from a shareholder, while we paid off one of loans from shareholder by issued 434,000 shares of our common stocks which was equivalent in the value of $0.22 million.
Previous wording
As of March 31, 2026, we had gross accounts receivable of $2,457,617 of which $32,718 was not yet past due, $53 was less than 90 days past due and $2,424,846 was more than 90 days past due. We had an allowance for expected credit losses of $379. As of May 7, 2026, 0.99% of accounts receivable outstanding as of March 31, 2026 had been collected. As of May 7, 2025, all of our accounts receivable outstanding at December 31, 2025 had been collected.
Current wording
As of June 30, 2026, we had gross accounts receivable of $3,192,518 of which $15,457 was not yet past due, $751,671 was less than 90 days past due and $2,425,390 was more than 90 days past due. We had an allowance for expected credit losses of $343. As of August 7, 2026, 0.99% of accounts receivable outstanding as of June 30, 2026 had been collected. As of August 7, 2026, all of our accounts receivable outstanding at December 31, 2025 had been collected.
Previous wording
As of March 31, 2026 and December 31, 2025, we had advances to suppliers of $225,604 and $313,924, respectively. These supplier prepayments are made for goods before we actually receive them.
Current wording
As of June 30, 2026 and December 31, 2025, we had advances to suppliers of $73,924 and $313,924, respectively. These supplier prepayments are made for goods before we actually receive them.
Previous wording
As of May 7, 2026, $225,604 or 100% and $313,924 or 100% of our advances to suppliers outstanding at March 31, 2026 and December 31, 2025 had been delivered to us in the form of purchases of furniture, respectively.
Current wording
As of August 7, 2026, $40,000 or 54% and $313,924 or 100% of our advances to suppliers outstanding at June 30, 2026 and December 31, 2025 had been delivered to us in the form of purchases of furniture, respectively.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Allocations Fund Administration, LLC is the administrative manager of Preamble X Capital I. The applicable management fee percentage for Xmax Beta is 0%. On December 17, 2025, Xmax Beta completed the subscription.
Current report — wording carried from elsewhere
On December 2, 2025, Preamble X Capital I, a series of Preamble X Capital LLC entered into a Subscription Agreement with a dedicated SPV (the “SPV”) to subscribe 40,106 equity certificates in the SPV for an amount of US$2,999,928.80 (the “Transaction”) and the SPV holds 502,236 equity certificates, and each certificate is entitled to a share of Series B Preferred Stock of xAI and such Series B Preferred Stock of xAI are directly held by a certain fund, as previously disclosed in the Form 8-K filed by the Company with SEC on December 8, 2025, amended on December 10, 2025. On December 16, 2025, Preamble X Capital I closed the Transaction.
Current report — wording carried from elsewhere
Translation of amounts from SGD into U.S. dollars has been made at the following exchange rates:
Current report — wording carried from elsewhere
Sales for the three months ended June 30, 2026 were $2.74 million, an increase of 7% from $2.56 million for the same period of 2025. Sales, excluding our API-based service revenue, for the three months ended June 30, 2026 were $1.64 million, a decrease of 36% from $2.56 million for the same period of 2025. This decrease in sales resulted primarily from 35.13% decrease in sales volume and 1.17% decrease in average selling price. Our three largest selling product categories for the three months ended June 30, 2026 were sofa, coffee tables and beds, which accounted for approximately 59%, 12% and 11% of sales, respectively. For the three months ended June 30, 2025, the three largest selling categories were sofas, coffee tables and beds, which accounted for approximately 54%, 10% and 9% of sales, respectively.
Current report — wording carried from elsewhere
The $0.92 million decreases in sales for the three months ended June 30, 2026, compared to the same period of 2025, was mainly due to decreased sales to North America. Sales to North America decreased by 36% to $1.64 million for the three months ended June 30, 2026, compared to $2.56 million for the same period of 2025, such decrease mainly due to decrease in sales volume by 35% and 1% in average selling price from the customers in North America.
Current report — wording carried from elsewhere
The following table sets forth the results of our operations for the six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Other income, net was $42.18 million for the six months ended June 30, 2026, compared to other expense, net of $0.30 million for the same period of 2025, representing an increase in other income of $42.48 million. The increase in other income was due primarily to an increase in unrealized gain of $42.92 million from the investment in the fund of Preamble.
Current report — wording carried from elsewhere
As a result of the foregoing, our net income was $32.62 million for the six months ended June 30, 2026, compared to $0.63 million of net loss for the same period of 2025.