HomesToLife Ltd

Current liabilities

As at 31 December 2025 and 30 June 2026, our current liabilities amounted to US$105.4 million and US$91.4 million, and accounted for 94.7% and 94.0% of total liabilities as at 31 December 2025 and 30 June 2026 respectively. Our current liabilities comprise accounts payable, customer deposits, accrued liabilities and other payables, short-term borrowings, amounts due to related parties, current lease liabilities, warranty liabilities, income tax payable and derivative financial instruments.

Short-term borrowings comprise secured trade financing loans amounted to US$10.4 million and US$7.3 million, and accounting for 9.9% and 7.9% of current liabilities as at 31 December 2025 and 30 June 2026 respectively. Further details are set out in the section entitled “Capitalisation and Indebtedness” of this Introductory Document. Short-term borrowings decreased by US$3.1 million, mainly attributable to stronger cash inflows from customer and related parties payments, with surplus operating cash deployed to settle maturing loans during the half year.

Accounts payable amounted to US$79.4 million and US$68.3 million, and accounted for 75.3% and 74.7% of current liabilities as at 31 December 2025 and 30 June 2026 respectively. These are mainly trade payables to our vendors, of which US$74.9 million and US$63.7 million or 71.1% and 69.7% of current liabilities are due to related parties, arising from the purchase of goods by our Group in the normal course of business. Such payables are unsecured, non-interest bearing and repayable on demand. The US$11.1 million reduction in payables was mainly driven by settlement of outstanding balances.

Accrued liabilities and other payables amounted to US$6.1 million and US$6.7 million, and accounted for 5.8% and 7.3% of current liabilities as at 31 December 2025 and 30 June 2026 respectively. These are mainly accruals for commission, inland trucking, royalties and duties.

Current lease liabilities relating to our Group’s obligation to make lease payments in the short-term amounted to US$1.9 million and US$2.3 million, and accounted for 1.8% and 2.5% of current liabilities as at 31 December 2025 and 30 June 2026 respectively.

Warranty liabilities amounted to US$2.2 million and US$1.9 million, and accounted for 2.1% and 2.1% of current liabilities as at 31 December 2025 and 30 June 2026 respectively. Our Group offers a product warranty to its customers for repairs and replacements, details of which are set out in the section entitled “Business – Quality Assurance” of this Introductory Document. Historically, our Group has experienced a low rate of repairs and replacements on product claims. The provision for the expected warranty claims is estimated based on our Group’s past experience with requests by customers.

Income tax payable amounted to US$4.2 million and US$3.7 million, and accounted for 3.9% and 4.1% of current liabilities as at 31 December 2025 and 30 June 2026 respectively.

Customer deposits amounted to US$1.2 million and US$1.2 million, and accounted for 1.1% and 1.3% of current liabilities as at 31 December 2025 and 30 June 2026 respectively. Payments received as deposits for the purchase orders made by the customers are recognised as customer deposits and included in current liabilities. Customer deposits are recognised as revenue when control over the ordered furniture is transferred to and accepted by the customer.

Derivative financial instruments amounted to US$0.1 million and nil, and accounted for 0.1% and nil of current liabilities as at 31 December 2025 and 30 June 2026 respectively. Our Group enters into foreign currency derivative contracts to economically hedge exposure to foreign currency fluctuations associated with the forecasted sale and purchase of inventories, the foreign exchange risk associated with certain receivables denominated in foreign currencies and certain future commitments for foreign expenditures. Foreign currency derivative contracts are measured using quoted forward currency rates at the balance sheet date. The Group did not have any outstanding foreign currency derivative contracts as at 30 June 2026.