Q1 2026: AMC Robotics (NASDAQ: AMCI) earns profit as revenue shifts to services
AMC Robotics Corporation reported its first-quarter 2026 results, showing a small profit despite lower sales. Revenue for the three months ended March 31, 2026 was $1,184,616, down from $1,792,525 a year earlier, as the business shifted away from hardware-heavy product sales.
Gross profit more than doubled to $1,020,656, and income from operations improved to $128,539 from a loss of $747,753, driven largely by higher-margin revenue-sharing and intelligent information services with related party Kami. Net income was $145,601, compared with a net loss of $77,177 in the prior-year quarter, while basic and diluted earnings per share were $0.01. Operating cash flow was negative $391,580, and cash and cash equivalents were $6,632,619 as of March 31, 2026, with total assets of $11,299,702 and stockholders’ equity of $10,482,380.
Positive
- None.
Negative
- None.
Insights
AMC Robotics turned a modest profit as it pivots toward higher-margin, related-party service revenues.
AMC Robotics generated Q1 2026 revenue of $1,184,616, down from $1,792,525 in Q1 2025, but gross profit rose to $1,020,656. The business mix now leans heavily on revenue-sharing with related party Kami Vision, which contributed $946,050 plus additional intelligent information and AI services.
Net income improved to $145,601 from a loss of $77,177, while operating cash flow was a use of $391,580, indicating earnings quality is still bedding in. Customer and counterparty concentration is high: Kami represented 80% of Q1 2026 revenue and 82% of related-party receivables.
Post-SPAC, the balance sheet remains light, with cash of $6,632,619, total assets of $11,299,702, and no financial debt disclosed. Actual performance for the rest of 2026 will hinge on sustaining monetization with Kami and managing working capital as the company scales its services model.
Key Figures
Key Terms
reverse recapitalization financial
variable interest entities financial
PIPE Warrants financial
two-class method financial
emerging growth company financial
ASC 606 financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (IRS Employer | |
| of incorporation or organization) | Identification Number) |
| (Address of principal executive offices) | (Zip code) |
(Issuer’s telephone number including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ | ||
| Smaller
reporting company |
|||
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As
of May 18, 2026, the registrant had
| INDEX | |
| Part I - Financial Information | |
| Item 1 – Financial Statements | 2 |
| Condensed Consolidated Balance Sheets (Unaudited) | 2 |
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) | 3 |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) | 4 |
| Condensed Consolidated Statements of Cash Flows (Unaudited) | 5 |
| Notes to Unaudited Condensed Consolidated Financial Statements | 6 |
| Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 34 |
| Item 3 – Quantitative and Qualitative Disclosures About Market Risk | 45 |
| Item 4 – Controls and Procedures | 45 |
| Part II - Other Information | |
| Item 5 – Other Information | 45 |
| Item 6 – Exhibits | 46 |
| Signatures | 47 |
| 1 |
Part I - Financial Information
Item 1 – Financial Statements
AMC ROBOTICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Accounts receivable - related party | ||||||||
| Accounts receivable | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses | ||||||||
| Other receivable | - | |||||||
| Other receivable - related party, net | ||||||||
| Other receivable | ||||||||
| Advance to suppliers | ||||||||
| Advance to suppliers – related party | ||||||||
| Advance to suppliers | ||||||||
| Prepayment - related party (current) | ||||||||
| Total current assets | ||||||||
| Right-of-use asset | ||||||||
| Other non-current assets | ||||||||
| Prepayment - related party | - | |||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable - related party | $ | $ | - | |||||
| Accounts payable | $ | $ | - | |||||
| Accrued and other liabilities | ||||||||
| Tax payable | ||||||||
| Other payable - related party | - | |||||||
| Other payable | - | |||||||
| Lease liability - current | ||||||||
| Warranty liabilities - current | ||||||||
| Total current liabilities | ||||||||
| Lease liability - noncurrent | ||||||||
| Warranty liabilities - noncurrent | ||||||||
| TOTAL LIABILITIES | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficits | ( | ) | ( | |||||
| Accumulated other comprehensive loss | ( | ) | - | |||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 2 |
AMC ROBOTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
| 2026 | 2025 | |||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| REVENUES | ||||||||
| Product revenue | $ | $ | ||||||
| Product revenue - related party | ||||||||
| Revenue share – related party | ||||||||
| Total Revenues | ||||||||
| COST OF REVENUES | ||||||||
| E-commerce platform expenses | ( | ) | ( | ) | ||||
| Product cost - related party | ( | ) | ( | ) | ||||
| Delivery and freight cost | ( | ) | ( | ) | ||||
| Inventory impairment losses | ( | ) | ( | ) | ||||
| Total Cost of Revenues | ( | ) | ( | ) | ||||
| Gross Profit | ||||||||
| OPERATING EXPENSES | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Sales and marketing expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total Operating Expenses | ( | ) | ( | ) | ||||
| INCOME (LOSS) FROM OPERATIONS | ( | ) | ||||||
| OTHER INCOME (EXPENSES) | ||||||||
| Other income - related party | - | |||||||
| Other income (loss), net | ( | ) | ||||||
| Interest income | ||||||||
| Interest expense | - | ( | ) | |||||
| Total Other Income , Net | ||||||||
| INCOME (LOSS) BEFORE INCOME TAX | ( | ) | ||||||
| Income tax expense | ( | ) | ( | ) | ||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| Other comprehensive loss | ( | ) | ( | ) | ||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | $ | $ | ( | ) | ||||
| NET INCOME (LOSS) PER SHARE: BASIC | ( | ) | ||||||
| NET INCOME(LOSS) PER SHARE: DILUTED | $ | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: DILUTED | ||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 3 |
AMC ROBOTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
Number of Shares | Amount | Paid-in Capital | Accumulated Deficits | Comprehensive Loss | Total | |||||||||||||||||||
| Common stock | Additional | Accumulated Other | ||||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Accumulated Deficits | Comprehensive Loss | Total | |||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Other comprehensive loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ( | ) | $ | - | $ | ||||||||||||||||
| Issuance of shares from exercise of warrants | - | - | - | |||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||
| Net income (loss) | - | - | - | |||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 4 |
AMC ROBOTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| 2026 | 2025 | |||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash (used in)/provided by operating activities: | ||||||||
| Provision for warranty | ||||||||
| Inventory impairment losses | ( | ) | ||||||
| Non-cash lease expenses | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Accounts receivable - related party | ( | ) | ||||||
| Inventories, net | ||||||||
| Prepaid expenses | ||||||||
| Other receivable | ( | ) | - | |||||
| Other receivable - related party, net | ( | ) | ||||||
| Advance to suppliers | - | ( | ) | |||||
| Prepayment - related party | ||||||||
| Accounts payable - related party | ( | ) | ||||||
| Accrued and other liabilities | ( | ) | ||||||
| Tax payable | - | ( | ) | |||||
| Other payable - related party | ||||||||
| Warranty liabilities | - | ( | ) | |||||
| Lease liability | ( | ) | - | |||||
| Net cash (used in) / provided by operating activities | $ | ( | ) | $ | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Repayment of note receivable - stockholder | - | |||||||
| Issuance of promissory note | - | ( | ) | |||||
| Net cash used in investing activities | $ | - | $ | ( | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from exercised warrants | - | |||||||
| Net cash provided by financing activities | $ | $ | - | |||||
| Effect of changes of foreign exchange rate on cash and cash equivalent | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents - beginning of the period | ||||||||
| Cash and cash equivalents - end of the period | $ | $ | ||||||
| Supplemental Cash Flow Disclosures | ||||||||
| Cash paid for interest expenses | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Unpaid deferred offering cost | $ | - | $ | |||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 5 |
AMC ROBOTICS CORPORATION
Notes to CONSOLIDATED financial statements (UNAUDITED)
| 1. | ORGANIZATION AND BUSINESS BACKGROUND |
Organization and Business
AMC Robotics Corporation (formerly known as AlphaVest Acquisition Corp.) (the “Company”) is a Delaware corporation and a publicly traded holding company. The Company conducts its operations through its wholly owned subsidiaries.
The Company and its consolidated subsidiaries as of March 31, 2026 are as follows:
SCHEDULE OF COMPANY AND ITS SUBSIDIARIES AND CONSOLIDATED ENTITIES
| Company Name | Date of Incorporation | Place of Incorporation | Ownership Interest | Principal Activities | ||||
| AMC Robotics Corporation (F/K/A AlphaVest Acquisition Corp.) | ||||||||
| AMC Corporation | ||||||||
| AMCV Company Limited |
AMC Corporation (“AMC” or the “Predecessor”) was incorporated in the State of Washington on October 21, 2021. The Company designs and sells residential and small-business security camera products, including indoor and outdoor camera devices, which are sourced from suppliers in Asia and sold primarily through e-commerce platforms in the United States, Canada, and Europe.
Formation of New Subsidiary
On January 5, 2026, the Company established a wholly owned subsidiary, AMCV Company Limited (“AMCV”), in Vietnam to support manufacturing and operational activities related to the Company’s robotics products. As of March 31, 2026, AMCV had not commenced material revenue-generating operations. The Company has begun initial operational setup activities, including administrative, hiring, and procurement functions. The accompanying unaudited condensed consolidated financial statements include the accounts of AMCV from its date of incorporation, and its impact on the Company’s financial position as of March 31, 2026 and results of operations for the period from its date of incorporation through March 31, 2026 was not material.
Reverse Recapitalization and Basis of Presentation
On December 9, 2025, the Company consummated a business combination (“Business Combination”) with AlphaVest Acquisition Corp., a special purpose acquisition company (the “SPAC” or “AlphaVest”). The transaction was accounted for as a reverse recapitalization in accordance with ASC 805-40, with AMC determined to be the accounting acquirer.
Under this method of accounting, the transaction is treated as a capital transaction rather than a business combination. Accordingly, the assets and liabilities of AlphaVest were recognized at their historical carrying values, with no goodwill or identifiable intangible assets recorded. AlphaVest’s historical equity accounts were eliminated, and the equity structure was retroactively adjusted to reflect that of the combined company. The net assets received from AlphaVest were recognized as a capital contribution, with the offset recorded within additional paid-in capital (“APIC”).
| 6 |
As a result, the unaudited condensed consolidated financial statements represent a continuation of AMC’s historical financial statements. All share and per-share information has been retroactively adjusted to reflect the legal capital structure of AMC Robotics Corporation for all periods presented.
The significant equity transactions completed in connection with the Business Combination, including the issuance of shares to public shareholders, PIPE investors, sponsor and founder shareholders, and the conversion of sponsor-related instruments, are disclosed in Note 11 – Stockholders’ Equity.
As
of December 31, 2025, the Company had
Variable Interest Entities
Historically, the Company conducted certain e-commerce operations through contractual arrangements with Shanghai Xiaoyun Technology Limited (“Xiaoyun”) and Kunshan Yishijue Technology Limited (“Yishijue”), which were determined to be variable interest entities (“VIEs”) under ASC 810. The Company was previously the primary beneficiary and consolidated these entities.
On December 1, 2025, the Company terminated the contractual arrangements with Xiaoyun and Yishijue and transferred the ownership and operational control of the related e-commerce platform accounts to the Company. As a result, the Company ceased to be the primary beneficiary and deconsolidated these entities as of that date.
Accordingly, as of March 31, 2026, the Company does not have any VIEs and does not have any continuing involvement with or exposure to losses from Xiaoyun or Yishijue.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted.
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented have been included. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.
These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
| 7 |
The Company’s fiscal year-end date is December 31.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, allowance for credit losses, valuation of inventory, estimated replacement rates to calculate warranty liabilities and warranty expenses.
Foreign Currency translation
The Company’s reporting currency is the U.S. dollar (“USD”). The functional currency of AMC Robotics Corporation and its wholly owned U.S. subsidiary is USD. The functional currency of the Company’s Vietnam subsidiary, AMCV Company Limited (“AMCV”), is the Vietnamese Dong (“VND”).
Transactions denominated in currencies other than the functional currency are translated at exchange rates prevailing on the transaction dates, with resulting gains and losses recorded in other income (expense). Assets and liabilities of foreign operations are translated into USD at period-end exchange rates, while revenues and expenses are translated at average exchange rates for the period. Translation adjustments are recorded in accumulated other comprehensive income (loss).
For the three months ended March 31, 2026, the Company used the following exchange rates for its Vietnam subsidiary:
SCHEDULE OF FOREIGN CURRENCY TRANSLATION
| Period ended March 31, 2026 | ||||||||
| Balance sheet, except for equity accounts | ₫ | VND to $ | ||||||
| Income statement and cash flows | ₫ | VND to $ |
As
a result of applying the above translation methodology, the Company recorded a foreign currency translation loss of approximately $
Prior
to the deconsolidation of Shanghai Xiaoyun Technology Limited and Kunshan Yishijue Technology Limited on December 1, 2025, these VIE
entities used the Renminbi (“RMB”) as their functional currency. Assets and liabilities were translated at period-end exchange
rates, while revenues and expenses were translated at average exchange rates during the period. For the three months ended March 31,
2025, the Company recognized a foreign currency exchange loss of approximately $
| Balance sheet, except for equity accounts | ￥ | RMB
to $ |
||||||
| Income statement and cash flows | ￥ | RMB
to $ |
Cash and Cash Equivalents
Cash consists of cash on deposit with financial institutions that is unrestricted as to withdrawal or use. Cash equivalents include highly liquid investments with original maturities of three months or less at the time of purchase.
For purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents primarily consist of investments in money market funds.
As
of March 31, 2026 and December 31, 2025, the Company had cash and cash equivalent balances of $
| 8 |
The
Company maintains its cash balances with financial institutions in the United States. These balances may, at times, exceed federally
insured limits of $
Accounts receivable and Accounts receivable - related party
Accounts receivable is stated at the amount the Company expects to collect from customers through e-commerce platforms. Accounts receivable - related party primarily represents amounts due from Kami Vision Incorporated (“Kami”) under revenue-sharing and service arrangements. Refer to Note 6 - - Related Party Balances and Transactions.
The Company evaluates expected credit losses on accounts receivable, including related party balances, using a loss-rate method in accordance with ASC 326, which considers historical loss experience, current conditions, and reasonable and supportable forecasts.
As
of March 31, 2026 and December 31, 2025,
Other receivable - related party
Other receivables - related party primarily consist of amounts due from Kami Vision Incorporated (“Kami”) for marketing-related activities and from Ants Technology (HK) Limited (“Ants”) for operational and settlement-related transactions. The balances presented in the condensed consolidated balance sheets are net of any allowance for expected credit losses. Refer to Note 6 - Related Party Balances and Transactions.
The Company evaluates expected credit losses on other receivables - related party in accordance with ASC 326 using a loss-rate method, as described in “Accounts Receivable and Accounts Receivable - Related Party.”
As of March 31, 2026 and December 31, 2025, no allowance for expected credit losses was recorded, as management determined that the risk of non-collection is not significant based on historical experience and ongoing settlement activity.
Inventories, net
Inventories consist primarily of finished goods and include product costs and freight-in costs. Product costs are determined using the moving average cost method. Freight-in costs are capitalized as part of inventory and allocated to products based on average cost per unit.
Inventories are stated at the lower of cost or net realizable value (“NRV”). The Company evaluates inventories on a periodic basis and records write-downs when the carrying value exceeds estimated NRV due to factors such as obsolescence, changes in demand, or market conditions. NRV is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Any write-downs are recorded in cost of revenues in the period identified.
A significant portion of the Company’s inventories is purchased from related parties, including ZKCam Technology Limited. Refer to Note 6 - Related Party Balances and Transactions and Note 10 - Concentration Risk for additional information. The Company has obtained extended payment terms from these suppliers, which may exceed standard commercial terms.
Revenue
The
Company generated revenues of $
SCHEDULE OF REVENUE
| 2026 | 2025 | |||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| Product revenue | $ | $ | ||||||
| Product revenue - related party | ||||||||
| Revenue share - related party | ||||||||
| Intelligent Information Service - related party | - | |||||||
| AI Service Sharing - related party | - | |||||||
| Total revenues | $ | $ | ||||||
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Company applies the five-step model to each of its revenue streams, as described below. Revenue is reported net of value added taxes.
Revenue Recognition
Product Revenue
The Company generates product revenue from both third-party customers and related parties, including ZKCam Technology Limited., Shanghai Xiaoyun Technology Co., Ltd. and Kunshan Technology Co., Ltd.
| 9 |
For product sales via e-commerce platforms, primarily Amazon, as well as direct sales to customers, contracts are established through customer orders. The Company has a single performance obligation to deliver products to customers. The transaction price is the fixed sales price, net of promotional discounts offered on the platforms. As there is a single performance obligation, the transaction price is fully allocated to product delivery.
Revenue is recognized at a point in time when control of the products transfers to the customer, which is generally upon shipment. E-commerce platforms facilitate shipping and collection; however, the Company retains control of the products prior to transfer.
For product sales to related parties, including Kami and ZKCam, the terms are generally consistent with those of third-party transactions. The Company recognized the revenue from product sales - related party at a point in time when control of the products is transferred to the related party customer, which is generally upon shipment or delivery, depending on the contractual terms.
Payments are typically received within 3 to 14 days after shipment for e-commerce sales or based on agreed terms for related party transactions. As payments are not generally received in advance, no deferred revenue is recorded.
Revenue Share – Related Party (Kami)
The revenue sharing arrangements with its related party, Kami, related to cloud-based services & AI service sharing and intelligent information services.
Cloud-based services & AI service sharing
The Company enters into a revenue sharing agreement with Kami, under which the Company refers customers to Kami’s cloud-based services, including video storage, image analysis and alert-based features. The Company’s performance obligation is to provide referral services, and it does not control the underlying services provided by Kami.
Revenue is recognized when an end user referred by the Company subscribes to Kami’s cloud services and makes a payment. Kami provides the Company with a monthly statement summarizing the revenue share generated from customers referred by the Company. The Company recognizes revenue in the period in which the underlying subscription revenue is earned by Kami and reported to the Company.
Under
the original agreement,
The transaction price for the revenue share is based on fixed contractual percentages of subscription revenues earned by Kami from referred customers and does not include variable consideration or non-cash consideration. The Company has concluded that it acts as an agent in this arrangement and therefore recognizes revenue on a net basis representing its share of the consideration received.
In January 2026, based on the existing cloud services, a new AI service module has been developed, which utilizes AI technology to achieve capabilities such as face recognition, motion capture, and fall detection provided to end users. Revenue generated from these services is included within “Revenue Sharing - related party” in the accompanying condensed consolidated statements of operations.
The sharing ratio of revenue AI service and is consistent , at 30%
Intelligent information services
Beginning in the fourth quarter of 2025, the Company generated revenue from arrangements with related parties associated with intelligent information services. These arrangements are linked to products previously sold by the Company, where the Company enables access to downstream data-related monetization channels developed and operated by its business partners.
The Company does not control the underlying services provided to end users and does not have an ongoing obligation to perform services after the initial enablement. Accordingly, the Company’s role is limited to facilitating access to these arrangements, and it participates in a share of revenues generated by its business partners.
Revenue is recognized when the underlying services are delivered by the business partners to end users and the related consideration is earned and becomes determinable. The Company recognizes revenue on a net basis, representing its share of the amounts received, consistent with its conclusion that it acts as an agent in these arrangements. Revenue generated from these services is included within “Revenue Sharing - related party” in the accompanying condensed consolidated statements of operations.
| 10 |
Product Return Policy
The Company has a product return policy that permits e-commerce platform customers in North America to return products within 30 days from the date of purchase. For items purchased during the holiday season from October to December, the return period is extended until the end of January in the following year. For customers in Europe, the return period for e-commerce platforms is 30 days from the date of purchase. Within these specified periods, the Company offers a full refund for returned products, provided the return criteria are met.
The Company recognizes revenues adjusted for returns based upon the e-commerce platform statements, which reflect the actual refunds for returns. The Company reviews the subsequent statements after the reporting date and adjusts revenue for returns related to sales in the reporting period accordingly. For returns occurring during the reporting period, adjustments are made in the month of the return. During the three months ended March 31, 2026 and 2025, the Company’s revenue was not significantly impacted by returns due to the short-term free return policy.
For revenue sharing derived from related party arrangements with Kami, including revenue sharing from cloud-based service and intelligent information service, there are no product return rights or refund obligations applicable to the Company. These revenues are based on subscription or service usage by end users of Kami’s platform and are recognized based on amounts reported by Kami. As such, no returns or refund estimates are recorded for these revenue streams.
Product Warranty
The Company provides standard product warranties to customers who purchase products through e-commerce platforms. For customers in North America, the Company offers a one-year warranty from the date of purchase covering replacement of malfunctioning products. For customers in Europe, the warranty period extends to two years from the date of purchase.
These warranties are assurance-type warranties as defined under ASC 606 and do not provide services beyond assuring that the product complies with agreed-upon specifications and continues to function as intended. Accordingly, the warranties are not accounted for as separate performance obligations.
The Company estimates the expected costs of fulfilling warranty obligations and records a warranty liability at the time of sale, with a corresponding expense recognized in the unaudited condensed consolidated statements of operations. The estimation of warranty costs is based on historical experience, including product failure rates and replacement costs, as well as current trends and expectations.
Gross versus Net Revenue Presentation
The Company evaluates whether it acts as a principal or agent in accordance with ASC 606.
For product sales via e-commerce platforms, the Company acts as a principal and recognizes revenue on a gross basis, as it controls the products prior to transfer to customers, bears inventory risk, sets pricing, and is responsible for fulfillment.
For revenue sharing arrangements with Kami, including both cloud-based service and intelligent information service, the Company acts as an agent, as it does not control the underlying services provided to end users and has no ongoing performance obligation after the initial enablement. Accordingly, revenue is recognized on a net basis, representing the Company’s share of the consideration generated from end users.
Cost of revenues
Cost
of revenues includes cost of products, e-commerce platform fees, delivery and freight costs, and inventory impairment loss. The Company
expenses cost of revenues in conjunction with sales as incurred. The Company incurred cost of revenues of $
General and administrative expenses
General
and administrative expenses primarily consist of costs for consulting fee, payroll expenses, storage fees, and professional fees. The
Company has expensed all general and administrative expenses costs as incurred. For the three months ended March 31, 2026 and 2025, the
Company incurred general and administrative expenses of $
| 11 |
Sales and marketing expenses
Sales
and marketing expenses primarily consist of costs for the promotion of business brand and product marketing and warranty expenses. The
Company expensed all sales and marketing costs as incurred. For the three months ended March 31, 2026 and 2025, the Company incurred
sales and marketing expenses of $
Provision for credit losses
The Company estimates expected credit losses on accounts receivable, other receivables, and related party receivables using a loss-rate method in accordance with ASC 326. This approach incorporates historical loss experience, current conditions, and reasonable and supportable forecasts.
For
the three months ended March 31, 2026 and 2025, the Company did
As
of March 31, 2026 and December 31, 2025, there was
Comprehensive loss
The Company applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss is defined to include all changes in equity of the Company during a period arising from transactions and other events and circumstances except those resulting from investments by shareholders and distributions to shareholders. For the periods presented, the Company’s comprehensive income (loss) includes net income (loss) and other comprehensive income (loss), which primarily consists of the foreign currency translation adjustments.
Income taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. The provision for income taxes is determined using the asset and liability approach, under which deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates expected to apply in the periods in which those differences are expected to reverse.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, management considers all available positive and negative evidence, including historical operating results, projections of future taxable income, and the expected timing of reversal of existing temporary differences. Based on this assessment, the Company has recorded a full valuation allowance against its deferred tax assets as of March 31, 2026 and December 31, 2025.
The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained upon examination. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. As of March 31, 2026 and December 31, 2025, the Company had no material uncertain tax positions. The Company’s tax returns remain subject to examination by taxing authorities for all years since inception.
| 12 |
Private Investment in Public Equity (“PIPE”) Financing and PIPE Warrants
In
connection with the closing of the Business Combination on December 9, 2025 (the “Closing Date”), the Company entered into
securities purchase agreements (the “PIPE Agreements”) with certain investors (the “PIPE Investors”), pursuant
to which the Company issued an aggregate of
In
connection with the PIPE Financing, the Company issued warrants to purchase shares of its common stock (the “PIPE
Warrants”). At the Closing Date, the PIPE Warrants represented the right to acquire an aggregate of
The Company evaluated the PIPE Warrants for classification as either equity or liability instruments in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company determined that the PIPE Warrants failed the indexation guidance under ASC 815-40 due to provisions that introduce variability in the number of shares deliverable upon settlement and are not inputs solely based on the Company’s own stock. Accordingly, the PIPE Warrants were initially recorded at fair value upon issuance as a derivative liability.
Upon
the occurrence of the reset event on December 30, 2025, the terms of the PIPE Warrants became fixed, including a fixed exercise price
and a determinable number of shares issuable upon exercise. Accordingly, the PIPE Warrants met the criteria for equity classification
under applicable accounting guidance and were reclassified from derivative liabilities to equity in the amount of $
Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by reflecting the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, unless the effect would be anti-dilutive.
The
Company applies the two-class method in computing earnings per share, as its PIPE Warrants are considered participating securities.
Under the two-class method, net income is allocated between common stockholders and participating securities based on their
respective rights to participate in earnings. For the three months ended March 31, 2026, the Company reported net income of $
Basic and diluted earnings per share were calculated as follows:
SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED
Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 |
|||||||
| Basic earnings per share: | ||||||||
| Net income (loss) | $ | $ | ( |
) | ||||
| Less: income allocated to participating securities | $ | ( | ) | $ | - | |||
| Net income (loss) allocated to common stockholders | $ | $ | ( |
) | ||||
| Weighted-average shares outstanding – basic | ||||||||
| Earnings per share – basic | $ | $ | ( |
) | ||||
| Diluted earnings per share | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Weighted-average shares outstanding – diluted | ||||||||
| Earnings per share – diluted | $ | $ | ( | ) | ||||
Diluted earnings per share is equal to basic earnings per share for the period presented, as the Company’s participating securities are included in the allocation of earnings under the two-class method and there are no additional dilutive instruments.
| 13 |
Fair value measurements
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the input used in measuring fair value as follows:
| ● | Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; | |
| ● | Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| ● | Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. |
The carrying values of cash, accounts receivable, advance to suppliers, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate fair value due to the short-term nature of these instruments. Pursuant to ASC 820 and ASC 825, the fair value of cash is determined based on Level 1 inputs. The Company does not have any “Level 2” or “Level 3” fair value assets or liabilities.
Segment reporting
The Company applies ASC 280, Segment Reporting, which requires operating segments to be identified based on the internal reporting reviewed by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s chief executive officer serves as the CODM.
The
Company operates its business through e-commerce platforms and manages its operations on a geographic basis. As of March 31, 2026, the
Company has determined that it has
Revenue is attributed to geographic regions based on the location of the end customer. Revenue generated from regions outside North America and Europe is not material.
The Company has also established a wholly owned subsidiary in Vietnam to support manufacturing and operational activities. As of March 31, 2026, this subsidiary has not generated revenue. The costs and operating expenses associated with the Vietnam entity are included within the Company’s consolidated operating results and are not evaluated separately by the Company’s chief operating decision maker (“CODM”). Accordingly, the Vietnam operations do not constitute a separate operating or reportable segment under ASC 280.
Prior to December 1, 2025, the Company’s operations included activities conducted through variable interest entities (“VIEs”) in China, which were presented as a separate segment. Following the termination of the VIE arrangements in December 2025, the Company no longer has operations in China, and accordingly, no China segment is presented for the three months ended March 31, 2026.
| 14 |
Revision of Previously Issued Consolidated Financial Statements
During the preparation of the Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, management identified certain immaterial errors primarily related to the accrual of certain general and administrative expenses in the Company’s previously issued consolidated financial statements for the year ended December 31, 2025.
The errors primarily related to professional service fees for services substantially performed prior to December 31, 2025 that were not accrued as of year-end. Management evaluated the errors in accordance with ASC 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.
Management concluded that the errors were not material, individually or in the aggregate, to the Company’s previously issued annual financial statements for the year ended December 31, 2025. Accordingly, amendment or reissuance of the previously issued annual financial statements was not required. However, management further concluded that correction of the errors entirely within the current reporting period would materially misstate the Company’s results of operations for the quarter ended March 31, 2026 and fiscal year 2026. Therefore, the Company revised the comparative prior-period balances included herein to correct such immaterial prior-period errors.
The impact of the revision to record the omitted professional fee accruals on the Company’s previously reported consolidated balance sheet as of December 31, 2025 was as follows:
SCHEDULE OF PREVIOUSLY REPORTED CONSOLIDATED BALANCE SHEET
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Accrued and other liabilities | $ | $ | $ | |||||||||
| Accumulated deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| 15 |
Recently issued accounting pronouncements
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU 2023-06 modifies the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
On November 4, 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities (PBEs). ASU 2024-03 adds ASC 220-40 to require a footnote disclosure about specific expenses by requiring PBEs to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (DD&A) recognized as part of oil- and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. The ASU does not change or remove existing expense disclosure requirements; however, it may affect where that information appears in the footnotes to the financial statements. ASU 2024-03 shall be effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends the guidance in ASC 326. The amendments simplify the measurement of expected credit losses for accounts receivable and contract assets by permitting entities to use a practical expedient based on historical loss rates, adjusted for current conditions and reasonable and supportable forecasts.
The amendments in this update are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2025-05 effective January 1, 2026. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and does not expect the adoption of this guidance to have a material impact.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. We do not discuss recent standards that are not anticipated to have an impact on or are unrelated to our consolidated financial condition, results of operations, cash flows or disclosures.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012, and it continues to qualify as such as of March 31, 2026. As an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, exemption from the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements to hold a nonbinding advisory vote on executive compensation and to obtain stockholder approval of any golden parachute payments not previously approved.
| 16 |
In addition, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with such standards. The Company has elected not to opt out of this extended transition period. As a result, when a standard is issued or revised with different application dates for public and private companies, the Company may adopt the new or revised standard at the time private companies adopt such standard. Accordingly, the Company’s financial statements may not be comparable to those of public companies that comply with new or revised accounting standards on earlier effective dates.
| 3. | ACCOUNTS RECEIVABLE |
Accounts receivable represents amounts due from customers in the ordinary course of business, primarily from e-commerce platform sales.
As
of March 31, 2026 and December 31, 2025, accounts receivable was $
| 4. | INVENTORIES - NET |
As
of March 31, 2026 and December 31, 2025, the Company had inventory balances of $
SCHEDULE OF INVENTORY NET
| March 31, 2026 (Unaudited) | December 31, 2025 |
| ||||||
| Purchased goods | $ | $ | ||||||
| Freight-in costs | ||||||||
| Inventory | ||||||||
| Less: inventory impairment | ( | ) | ( | ) | ||||
| Inventory, net | $ | $ | ||||||
For
the three months ended March 31, 2026, the Company recognized an inventory provision of approximately $
For
the three months ended March 31, 2025, the Company recognized an inventory provision of $
The movement of inventory impairment provisions are summarized as follows:
SCHEDULE OF INVENTORY IMPAIRMENT PROVISIONS
| 2026 | 2025 | |||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Balance at the beginning of the period | $ | $ | ||||||
| Addition | ||||||||
| Deletion | ( | ) | ( | ) | ||||
| Balance at the end of the period | $ | $ | ||||||
| 17 |
| 5. | PREPAID EXPENSES |
As
of March 31, 2026 and December 31, 2025, the Company had prepaid expenses of $
| 6. | RELATED PARTY BALANCES AND TRANSACTIONS |
The principal related parties with which the Company had transactions for the three months ended March 31, 2026 and 2025, and balances as of March 31, 2026 and December 31, 2025 are as follows:
| Name | Relationship with the Company | |
| Sean Da | CEO and Board Chair, and majority stockholder | |
| Senslab HK Limited (hereinafter referred to as “Senslab HK”) | Affiliate of Sean Da | |
| Senslab Technology Co., Ltd (hereinafter referred to as “Senslab SH”) | Affiliate of Sean Da | |
| Ants Technology (HK) Limited (hereinafter referred to as “Ants”) | Affiliate of Sean Da | |
| Kami Vision Incorporated (hereinafter referred to as “Kami”) | Affiliate of Sean Da | |
| Yunyizhilian Information Technology Co., Ltd (hereinafter referred to as “Yunyizhilian”) | Entity under common control with Sean Da | |
| Shanghai Xiaoyun Technology Co., Ltd. (hereinafter referred to as “Xiaoyun”) | Formerly VIE | |
| Kunshan Ant Vision Electronic Technology Co., Ltd. (hereinafter referred to as “Yishijue”) | Formerly VIE | |
| ZKCam Co., Ltd. (“ZKCam”) | Minority Stockholder of the Company |
Impact of Related Party Transactions on Operations
During the three months ended March 31, 2026 and 2025, related party transactions had the following impact on income (loss) before income tax:
SCHEDULE OF RELATED PARTY TRANSACTIONS
| 2026 | 2025 | |||||||
| Related Party Transactions | Income (loss) before income tax | |||||||
| Income Statement | Three months ended | |||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue share – related party (Kami) | $ | $ | ||||||
| Product revenue - related party (Kami) | - | |||||||
| Product revenue - related party (ZKCam) | - | |||||||
| Product revenue - related party (Xiaoyun) | - | |||||||
| Product revenue - related party (Yishijue) | - | |||||||
| Intelligent Information Service (Kami) | - | |||||||
| AI Service Sharing (Kami) | - | |||||||
| Product cost - related party (Senslab) | ( | ) | ( | ) | ||||
| General and administrative expenses - Consulting fee-related party (Kami) | ( | ) | ( | ) | ||||
| General and administrative expenses - Stockholder’s business travel expense (Sean) | ( | ) | ( | ) | ||||
| General and administrative expenses - Financial consulting fee (Ants) | ( | ) | ( | ) | ||||
| Other income - Marketing incentive subsidy income (Kami) | - | |||||||
| Total impact on income (loss) before income tax | $ | $ | ||||||
| % of income (loss) before income tax | % | N/M | % | |||||
| 18 |
Related Party Balances
As of March 31, 2026 and December 31, 2025, balances with related parties were as follows.
| Balance Sheet | Ants | Senslab SH | Senslab HK | ZKCam | Kami | Sean Da | Yi shijue | Xiao Yun | Total | |||||||||||||||||||||||||||
| Related Party Transactions | As of March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Balance Sheet | Ants | Senslab SH | Senslab HK | ZKCam | Kami | Sean Da | Yi shijue | Xiao Yun | Total | |||||||||||||||||||||||||||
| Accounts receivable - related party | $ | - | $ | - | $ | - | $ | $ | $ | - | $ | $ | $ | |||||||||||||||||||||||
| Other receivable - related party, net | - | |||||||||||||||||||||||||||||||||||
| Including: | - | |||||||||||||||||||||||||||||||||||
| Other receivable - related party | - | - | ||||||||||||||||||||||||||||||||||
| Prepayment - related party | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Advance to suppliers – related party | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Accounts payable - related party | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Other payable - related party | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Balance Sheet | Ants | Senslab SH | Senslab HK | Xiaoyun |
ZKCam |
Kami | Sean Da | Total | ||||||||||||||||||||||||
| Related Party Transactions | As of December 31, 2025 | |||||||||||||||||||||||||||||||
| Balance Sheet | Ants | Senslab SH | Senslab HK | Xiaoyun |
ZKCam |
Kami | Sean Da | Total | ||||||||||||||||||||||||
| Accounts receivable - related party | $ | - | $ | - | $ | - | $ | $ | $ | - | $ | |||||||||||||||||||||
| Other receivable - related party, net | - | - | ||||||||||||||||||||||||||||||
| Including: | - | - | - | - | ||||||||||||||||||||||||||||
| Other receivable - related party | - | - | ||||||||||||||||||||||||||||||
| Advance to suppliers – related party | - | - | ||||||||||||||||||||||||||||||
| Prepayment - related party | - | - | - | - | - | |||||||||||||||||||||||||||
| 19 |
Specifically, transactions with each related party presented in the above tables are as follows:
Senslab HK Limited and Senslab Technology Co., Ltd
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| Advance to suppliers - related party (Senslab HK) | $ | % | $ | % | ||||||||||||
| Other receivable - related party (Senslab SH) | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Liability | Balance | % of Total Liability | |||||||||||||
| Accounts payable - related party (Senslab HK) | $ | - | - | % | $ | - | - | % | ||||||||
| Accounts payable - related party (Senslab SH) | - | - | % | - | - | % | ||||||||||
| Total | $ | - | - | % | $ | - | - | % | ||||||||
Sean
Da, the Company’s majority stockholder, owns approximately
Historically, the Company procured security cameras from Senslab HK. Senslab HK purchased the products from Senslab SH and exported them to the Company. Beginning in the fourth quarter of 2023, after Senslab SH obtained import and export trade approval, the Company also began purchasing security cameras directly from Senslab SH.
The
Company procured security cameras from Senslab HK for $nil during the three months ended March 31, 2026 and 2025. During the same periods,
purchases from Senslab SH totaled $nil and $
As of March 31, 2026 and December 31, 2025, accounts payable due to Senslab HK and Senslab SH were $nil for both periods.
Ants Technology (HK) Limited
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| Prepayment - related party | $ | % | $ | % | ||||||||||||
| Other receivable - related party | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total liabilities | Balance | % of Total liabilities | |||||||||||||
| Accounts Payable-related party | $ | % | $ | - | - | % | ||||||||||
| Total | $ | % | $ | - | - | % | ||||||||||
| Accounts Payable | $ | % | $ | - | - | % | ||||||||||
| 20 |
Sean
Da, the Company’s majority stockholder, owns
Prepayment – Related Party
The
prepayment is amortized based on (i) revenue collected from the sale of Ants’ inventories, (ii) reimbursements of costs incurred
by Ants, and (iii) financial consulting fees payable to Ants beginning January 1, 2025 for bookkeeping support services at a monthly
rate of $
For
the three months ended March 31, 2026 and 2025, the Company recognized $
As
of March 31, 2026 and 2025, the remaining prepayment balance was $
Other receivable – related party
As
of March 31, 2026 and December 31 2025, the Company had gross “other receivable – related party” balances due from
Ants of $
Account Payable – related party
During
the three months ended March 31, 2026 and ,2025, AMCV purchased security cameras from Ants in the amounts of $
As
of March 31, 2026 and December 31, 2025, accounts payable due to Ants were $
The following table presents the movement of “other receivable – related party” balances due from Ants:
SCHEDULE OF OTHER RECEIVABLE - RELATED PARTY
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance at the beginning of the period | $ | $ | ||||||
| Repayment from Ants (1) | - | ( | ) | |||||
| Inventory Transfer /(Procurement) (2) | - | |||||||
| Balance at the end of the period | $ | $ | ||||||
| (1) | ||
| (2) |
Kami Vision Incorporated
Sean
Da, the Company’s majority stockholder, also serves as Chief Executive Officer of Kami and holds approximately
| 21 |
Revenue-Sharing Arrangement – Cloud Services & AI Service Sharing
In October 2021, the Company entered into a revenue-sharing agreement with Kami related to cloud-based services associated with the Company’s products. These services include storage of recorded video data, image analysis, and alert and intelligent detection services provided to end users.
Under the arrangement, the Company refers customers to Kami and is entitled to a portion of the subscription revenues generated from those customers.
On July 1, 2025, the Company entered into an amended agreement with Kami to revise the revenue-sharing percentages applicable to subscription revenues from referred customers. The amended terms apply prospectively and do not affect revenue recognized prior to the modification date.
SCHEDULE OF ANNUAL SUBSCRIPTIONS REVENUES
| Annual subscription periods | Percentage basis | |||||||
Inception through June 30, 2025 | From July 1, 2025 Onwards | |||||||
| First year during which an end user starts the cloud service subscription from Kami | % | % | ||||||
| Second year during which an end user continues the cloud service | % | % | ||||||
| Third year and thereafter during which an end user continues the service subscription from Kami | % | % | ||||||
In
January 2026, based on the existing cloud services, the Company developed a new AI service module that utilizes AI technology to provide
capabilities such as facial recognition, motion capture, and fall detection to end users, and the revenue sharing ratio for the AI service
is consistent with the existing arrangement at
During
the three months ended March 31, 2026 and 2025, revenue share from Kami amounted to $
Revenue - sharing arrangement - Intelligent Information Service Agreement
On October 1, 2025, the Company entered a revenue-sharing arrangement related with Kami.
Under the arrangement, Kami operates an artificial intelligence-driven information distribution platform and related application, which utilizes hardware products sold by the Company to generate monetization opportunities. Kami manages all aspects of the platform operations, including content distribution, pricing, bidding processes, and relationships with third-party traffic or content providers.
The
Company does not operate the platform or application, does not control the underlying services provided to end users, and does not have
any ongoing performance obligations after the sale of its hardware products. Instead, the Company is contractually entitled to receive
The Company concluded that it acts as an agent in this arrangement, as it does not control the services provided to end users, does not determine pricing, and does not receive gross consideration from third-party platforms. Accordingly, revenue is recognized on a net basis equal to the Company’s contractual share of monetization revenue in accordance with ASC 606.
During
the three months ended March 31, 2026 and 2025, the Company recognized revenue of $
| 22 |
Accounts receivable – related party
Accounts receivable – related party primarily represents amounts due from Kami under the Company’s revenue-sharing arrangements, including the cloud services and AI services sharing arrangement and the Intelligent Information Service Agreement described above. These balances represent the Company’s contractual share of monetization revenues earned but not yet remitted by Kami as of the respective reporting dates.
The increase in accounts receivable – related party as of March 31, 2026 compared to December 31, 2025 primarily reflects increased monetization activities under arrangements with Kami and the timing of settlements.
Other Receivable – Related Party and Marketing Incentive Subsidy Income
The
Company entered into a market promotion subsidy agreement with Kami effective January 1, 2025, pursuant to which Kami agreed to provide
an annual subsidy of up to $
Subsidy amounts under the 2025 agreement were determined based on agreed marketing activities performed and were invoiced periodically by the Company to Kami. As these amounts were not generated from the Company’s primary revenue-producing activities, they were recognized as other income, with the related receivable recorded as “other receivable – related party.”
For
the three months ended March 31, 2026 and 2025, the Company recognized subsidy income of $nil and $
As of March 31, 2026 and December 31, 2025, the Company had other receivable – related party balances of $nil and $nil, respectively.
Product revenue – related party
To promote adoption of Kami’s cloud subscription services, Kami launched a promotional campaign beginning in the third quarter of 2024 under which customers received a complimentary security camera upon subscribing to Kami’s cloud services. As part of this promotion, Kami purchased security cameras from the Company.
For
the three months ended March 31, 2026 and 2025, product revenue - related party from Kami was $nil
and $
Consulting fee
The
Company engaged certain employees of Kami Vision Incorporated (“Kami”) to provide services as contractors. the Company paid
Kami service fees of $
There were no outstanding balances payable to Kami related to consulting services as of March 31, 2026 or December 31, 2025.
Sean Da
As
of March 31, 2026 and December 31, 2025, amounts due from the Company’s majority stockholder were $
As
of December 31, 2025, the balance of $
Beginning in 2025, the Company made advance payments to the Company’s majority stockholder, Sean Da, to cover business travel and other operating expenditures incurred on behalf of the Company. These advances are recorded within “other receivable – related party” until the related expenses are substantiated and recognized in the Company’s financial statements.
| 23 |
During
three months ended March 31, 2026, business travel expenses of $
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| Other receivable – related party | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
ZKCam Technology Limited
| Balance | % of Total Asset | Balance | % of Total Asset | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| Accounts receivable - related party | $ | % | $ | % | ||||||||||||
| Total | $ | % | $ | % | ||||||||||||
ZKCam Technology Limited (“ZKCam”) is an affiliate of the Company. The Company commenced product sales to ZKCam in 2025 following the execution of a product sales agreement in the same year. Transactions with ZKCam are conducted in the ordinary course of business and primarily consist of the sale of products.
For
the three months ended March 31, 2026 and 2025, product revenue recognized from ZKCam totaled $
Amounts
due from ZKCam primarily arose from these product sales and represent trade receivables generated in the normal course of business. As
of March 31, 2026, the outstanding balance due from ZKCam was $
Shanghai Xiaoyun Technology Co., Ltd.
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| Other receivable - related party | $ | % | $ | % | ||||||||||||
| Accounts Receivable - related party | $ | % | $ | - | - | % | ||||||||||
| Total | $ | % | $ | | % | |||||||||||
Shanghai Xiaoyun Technology Co., Ltd. (“Xiaoyun”) was previously a variable interest entity (“VIE”) of the Company and was deconsolidated in December 2025 when the Company ceased to meet the criteria for consolidation.
Following the deconsolidation, Xiaoyun is considered a related party of the Company.
After the deconsolidation, due to the transition period, some product links of certain Amazon UK stores have not been removed from the website. AMC still sells some products through Amazon stores in Europe. After evaluation by the management, these sales are considered as direct transactions with Xiaoyun
Amounts due from Xiaoyun primarily arose from transactions in the ordinary course of business subsequent to deconsolidation. The balance outstanding as of March 31, 2025 represents trade receivables, is non-interest-bearing, and is due on demand.
During
the three months ended March 31, 2026 and 2025, product revenue recognized from Xiaoyun totaled $
| 24 |
The Company evaluated and recorded the related-party receivable balance as of March 31, 2026 based on the underlying books and records. Management assesses collectability on an ongoing basis and believes the amount is recoverable as of March 31, 2026.
Kunshan Ant Vision Electronic Technology Co., Ltd
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| Accounts Receivable - related party | $ | % | $ | - | - | % | ||||||||||
| Total | % | $ | - | - | % | |||||||||||
| Balance | % of Total Assets | Balance | % of Total Assets | |||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Balance | % of Total Liabilities | Balance | % of Total Libilities | |||||||||||||
| Other payable - related party | $ | % | $ | - | - | % | ||||||||||
| Total | $ | % | $ | - | - | % | ||||||||||
Kunshan Ant Vision Electronic Technology Co., Ltd(“Yishijue”) was previously a variable interest entity (“VIE”) of the Company and was deconsolidated in December 2025 when the Company ceased to meet the criteria for consolidation.
Following the deconsolidation, Yishijue is considered a related party of the Company.
After the deconsolidation, due to the transition period, some product links of certain Amazon European stores have not been removed from the website. AMC still sells some products through Amazon stores in Europe. After evaluation by the management, these sales are considered as direct transactions with Yishijue
Amounts due from Yishijue primarily arose from transactions in the ordinary course of business subsequent to deconsolidation. The balance outstanding as of March 31, 2025 represents trade receivables, is non-interest-bearing, and is due on demand.
During
the three months ended March 31, 2026 and 2025, product revenue recognized from Yishijue totaled $
The Company evaluated and recorded the related-party receivable balance as of March 31, 2026 based on the underlying books and records. Management assesses collectability on an ongoing basis and believes the amount is recoverable as of March 31, 2026
| 7. | ACCRUED AND OTHER LIABILITIES |
As
of March 31, 2026 and December 31, 2025, total accrued expenses and other liabilities were $
The
overall decrease of $
| 25 |
These
increases were partially offset by a decrease in other payables, which declined from $
SCHEDULE OF ACCRUED AND OTHER LIABILITIES
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Credit card payable | $ | $ | - | |||||
| Insurance premiums | ||||||||
| Attorney fees payable | - | |||||||
| Audit fees payable | ||||||||
| Other payable | ||||||||
| Total accrued and other liabilities | $ | $ | ||||||
| 8. | WARRANTY LIABILITIES |
The Company estimates warranty liabilities based on historical product replacement rates, expected future claims, and estimated shipping and handling costs per unit. Management periodically reassesses the adequacy of the warranty reserve and adjusts the provision as necessary based on actual claims experience and updated assumptions.
In estimating warranty liabilities, the Company considers historical claim rates, product-specific performance, and applicable warranty terms, including extended warranty periods in certain markets. For products sold in Europe, which are generally subject to a two-year warranty period, the Company’s estimate incorporates expected claims over the applicable coverage period.
For
the three months ended March 31, 2026 and 2025, the Company recognized warranty expenses of $
As
of March 31, 2026 and December 31, 2025, the total warranty liabilities were $
The following table presents the movement of product warranty liabilities for the three months ended March 31, 2026 and 2025.
SCHEDULE OF WARRANTY LIABILITY
| 2026 | 2025 | |||||||
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Balance at the beginning of the period | $ | $ | ||||||
| Provision for warranties, net | ||||||||
| Warrant costs incurred | - | ( | ) | |||||
| Balance at the end of the period | $ | $ | ||||||
| Including: | ||||||||
| Current portion | $ | $ | ||||||
| Non-current portion | $ | $ | ||||||
| 26 |
| 9. | LEASE |
The Company determines whether an arrangement is or contains a lease at inception. Lease agreements under which the Company is a lessee are evaluated for classification as either finance or operating leases. The Company’s leases are classified as operating leases. Operating lease right-of-use (“ROU”) assets and corresponding lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The ROU asset represents the Company’s right to use the underlying asset during the lease term, and the lease liability represents the Company’s obligation to make lease payments. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate, determined based on information available at the lease commencement date, to measure the present value of lease payments.
Leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheets. Instead, lease expense for these short-term leases is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component.
The
Company leases office space in New York City under an operating lease with a term of approximately
In
addition, on January 5, 2026, the Company, through its subsidiary AMCV Company Limited, entered into a lease agreement for office space
in Vietnam with an initial term of 12 months. This lease qualifies as a short-term lease under ASC 842, and accordingly, no ROU asset
or lease liability has been recognized. Instead, lease payments are recognized as rent expense on a straight-line basis over the lease
term. Rent expense related to this lease was approximately $
For
the three months ended March 31, 2026, the Company recognized operating lease expense of $
As
of March 31, 2026, the Company’s operating lease ROU asset and total lease liability were $
The components of operating lease expense for the three months ended March 31, 2026 and 2025 were as follows:
SCHEDULE OF LEASE COST
Operating Lease Expense
| 2026 | 2025 | |||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease expense | $ | $ | - | |||||
Right-of-Use Asset and Lease Liability
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Short-term operating lease liabilities | ( | ) | ( | ) | ||||
| Long-term operating lease liabilities | ( | ) | ( | ) | ||||
| Total operating lease liabilities | $ | ( | ) | $ | ( | ) | ||
Weighted-Average Lease Term and Discount Rate
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Weighted average lease term | ||||||||
| Weighted average discount rate | % | % | ||||||
Supplemental Cash Flow Information
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Supplemental noncash information: | ||||||||
| Right-of-use asset obtained in exchange for lease obligations | $ | - | $ | |||||
| 27 |
Future Minimum Lease Payments
The following table summarizes the Company’s future lease payments under the operating lease as of March 31, 2026
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
| Future lease commitments | Commitments | |||
| 2026 (remaining of the year) | $ | |||
| 2027 | ||||
| Total Lease Payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Less: prepayments | - | |||
| Present value of lease liabilities | $ | |||
| Current portion of obligations under operating leases | ||||
| Obligations under operating leases, non-current | ||||
| 10. | CONCENTRATION RISK |
SCHEDULE OF CONCENTRATION RISK
Customer Concentration
The Company’s revenues are concentrated among a limited number of customers. The following customer accounted for 10% or more of total revenues for the three months ended March 31, 2026 and 2025:
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Kami Vision Incorporated | % | % | ||||||
As of March 31, 2026, and December 31, 2025, the following customer accounted for 10% or more of total accounts receivable – related party:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Kami Vision Incorporated | % | % | ||||||
| ZKCam Technology Limited | % | % | ||||||
The loss of this customer or a significant reduction in purchases by this customer could have a material adverse effect on the Company’s business, financial condition, and results of operations.
Supplier Concentration
The Company relies on a limited number of suppliers for its inventory purchases. The following suppliers accounted for 10% or more of total purchases for the three months ended March 31, 2026 and 2025:
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Senslab Technology Co., Ltd (related party) | % | % | ||||||
| ZKCam Technology Limited (related party) | % | % | ||||||
| Third-party supplier | - | % | % | |||||
| 28 |
| 11. | STOCKHOLDERS’ EQUITY |
The Company’s stockholders’ equity reflects the capital structure established upon the completion of the Business Combination on December 9, 2025, which was accounted for as a reverse recapitalization in accordance with ASC 805. Under this method of accounting, the Company was treated as the accounting acquirer and AlphaVest Acquisition Corp. (“AlphaVest”) was treated as the acquired company for financial reporting purposes.
In
connection with the Business Combination, AlphaVest held approximately $
As a result of the reverse recapitalization, AlphaVest’s historical equity was eliminated and replaced with the equity structure of the combined company, including the retroactive restatement of shares and per share amounts for all periods presented.
During
the three months ended March 31, 2026, the Company issued
There were no other material changes to stockholders’ equity 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 Business Combination.
| 12. | SEGMENT REPORTING |
The Company determines its reportable operating segments using the “management approach” in accordance with ASC 280, Segment Reporting. Under this approach, operating segments are based on the internal reporting structure used by the Company’s chief operating decision maker (“CODM”) to allocate resources and assess operating performance. The Company’s Chief Executive Officer serves as the CODM and evaluates segment performance primarily based on segment revenue and segment net income (loss).
The
Company operates online stores on e-commerce platforms with separate platform accounts serving North America and Europe.
Accordingly, the Company has identified
Following
the termination of the Company’s variable interest entity (“VIE”) arrangements in December 2025, the Company no longer
has operations in
| 29 |
Segment revenues are directly attributed to the geographic region in which the sales are generated. Cost of revenues and operating expenses are allocated based on the relative proportion of revenue generated by each segment. Interest income and interest expense are allocated based on the use of underlying assets or liabilities within each segment. Other segment expenses are not material individually and are not presented separately.
SCHEDULE OF SEGMENT REPORTING
| North America | Europe | Total | North America | Europe | China | Total | ||||||||||||||||||||||
| Three months ended | Three months ended | |||||||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||
| North America | Europe | Total | North America | Europe | China | Total | ||||||||||||||||||||||
| REVENUES | ||||||||||||||||||||||||||||
| Product revenue | $ | $ | - | $ | $ | $ | $ | - | $ | |||||||||||||||||||
| Product revenue - related party | - | - | ||||||||||||||||||||||||||
| Revenue share – related party | - | |||||||||||||||||||||||||||
| Intelligent Information Service - related party | - | - | - | - | ||||||||||||||||||||||||
| AI Service Sharing - related party | - | - | - | - | ||||||||||||||||||||||||
| Total Revenues | - | |||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||
| Cost of Revenue: | ||||||||||||||||||||||||||||
| E-commerce platform expenses | - | |||||||||||||||||||||||||||
| Product cost | - | |||||||||||||||||||||||||||
| Delivery and freight cost | - | |||||||||||||||||||||||||||
| Inventory impairment losses | - | |||||||||||||||||||||||||||
| Total Cost of Revenue | - | |||||||||||||||||||||||||||
| Gross Profit | - | |||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||
| Marketing and advertising | - | |||||||||||||||||||||||||||
| Consulting fee | - | |||||||||||||||||||||||||||
| Warranty expense | - | |||||||||||||||||||||||||||
| Payroll expenses | - | |||||||||||||||||||||||||||
| Professional fees | - | |||||||||||||||||||||||||||
| Travel and entertainment | - | |||||||||||||||||||||||||||
| (Reversal)/provision for credit losses - related party | - | - | - | - | - | - | - | |||||||||||||||||||||
| Office expenses | - | |||||||||||||||||||||||||||
| Sales tax | - | |||||||||||||||||||||||||||
| State B&O tax | - | - | - | - | - | |||||||||||||||||||||||
| Other segment expenses | ||||||||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||
| Other Income/(Expenses): | ||||||||||||||||||||||||||||
| Marketing campaign | - | - | - | - | ||||||||||||||||||||||||
| Interest income | - | - | ||||||||||||||||||||||||||
| Loss on deconsolidation | - | - | - | - | ||||||||||||||||||||||||
| Interest expense | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||
| Other income | - | - | - | - | ||||||||||||||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | - | ( | ) | |||||||||||||||
| Less: | ||||||||||||||||||||||||||||
| Income tax | ( | ) | ( | ) | ( | ) | - | - | ||||||||||||||||||||
| Segment Net Income (Loss) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| 30 |
The following table presents total assets by segment as of March 31, 2026 and December 31, 2025.
| North America | Europe | Total | North America | Europe | China | Total | ||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||
| North America | Europe | Total | North America | Europe | China | Total | ||||||||||||||||||||||
| TOTAL SEGMENT ASSETS | $ | $ | $ | $ | $ | - | $ | |||||||||||||||||||||
| 13. | TAXATION |
The Company’s provision for income taxes for the three months ended March 31, 2026 and 2025 consisted of the following:
SCHEDULE OF PROVISION FOR INCOME TAXES
| 2026 | 2025 | |||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Current tax provision | $ | $ | ||||||
| Deferred tax provision | - | - | ||||||
| Total provision for income taxes | $ | $ | ||||||
Income Tax
The
Company is subject to U.S. federal and state income taxation. For the three months ended March 31, 2026 and 2025, the Company recorded
state income tax expense of approximately $
The
Company’s effective tax rate is
Realization of a portion of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years to obtain benefit from the reversal of temporary differences.
Management considered all available evidence under existing tax law and anticipated expiration of tax statutes and determined that a full valuation allowance was required as of March 31, 2026.
We have not completed a study to determine whether and ownership change per the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions, has occurred. Utilization of the Company’s net operating loss and income tax credit carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future. These ownership changes may limit the amount of the net operating loss and income tax credit carryover that can be utilized annually to offset future taxable income. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. Currently the approximately 70% of the Company is owned by a single shareholder since the inception of the Company through 3/31/2026, it is unlikely that a section 382 ownership change has occurred.
The following table reconciles the U.S. federal statutory income tax rate to the Company’s effective tax rate for the three months ended March 31, 2026 and 2025:
SCHEDULE OF FEDERAL STATUTORY INCOME TAX RATE
| 2026($) | 2026(%) | 2025 ($) | 2025(%) | |||||||||||||
| Three months ended March 31, | ||||||||||||||||
| 2026($) | 2026(%) | 2025 ($) | 2025(%) | |||||||||||||
| Tax provision | $ | % | $ | ( | ) | % | ||||||||||
| Effect of State taxes | $ | % | $ | ( | )% | |||||||||||
| federal effect of state tax in deferred | $ | % | $ | ( | )% | |||||||||||
| Foreign tax rate differential | $ | - | % | $ | ( | )% | ||||||||||
| R&D tax credits | $ | - | ) | % | $ | -) | % | |||||||||
| Change in valuation allowance | $ | ( | ) | ( | )% | $ | ( | )% | ||||||||
| Credits generated in current year | $ | ( | ) | % | $ | ( | ) | % | ||||||||
| FDII | $ | ( | ) | % | $ | - | % | |||||||||
| Permanent differences | $ | - | % | $ | % | |||||||||||
| RTP | $ | - | % | $ | - | % | ||||||||||
| Federal Tax - PY | $ | - | % | $ | - | % | ||||||||||
| Federal Penalties | $ | - | % | $ | - | % | ||||||||||
| Rounding | $ | ( | ) | ( | )% | - | % | |||||||||
| Effective tax rate | $ | % | $ | ( | )% | |||||||||||
| 31 |
Deferred Tax
As of March 31, 2026 and December 31, 2025, the Company had no net deferred tax assets due to a full valuation allowance recorded against its deferred tax assets. The components of deferred tax assets and liabilities were as follows:
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Deferred tax asset attributable to: | ||||||||
| Tax effect of net operating losses carried forward | $ | $ | ||||||
| Section 174 costs, net | ||||||||
| Warranty liabilities | ||||||||
| Inventory reserve | ||||||||
| Tax credits | ||||||||
| State tax | ( | ) | ( | ) | ||||
| Lease Liability | ||||||||
| Right of Use Asset | ( | ) | ( | ) | ||||
| FIN 48 | - | |||||||
| Deferred tax assets | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net | $ | - | $ | - | ||||
In assessing the realizability of deferred tax assets, management evaluates whether it is more likely than not that such assets will be realized. Based on available evidence, including historical operating results, cumulative losses, projected future taxable income, and tax planning strategies, management determined that a full valuation allowance was required as of March 31, 2026 and December 31, 2025.
As
of March 31, 2026, the Company had federal net operating loss carryforwards of approximately $
Uncertain Tax Positions
In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company provided for state taxes for which the Company has a state filing requirement but has chosen not to file in these states.
The Company recognizes interest and penalties related to unrecognized tax positions within the income tax expense line in the accompanying consolidated statements of operations. If the uncertain tax positions were recognized, there would not be a material impact on the effective tax rate. There were no accrued interest and penalties associated with uncertain tax positions as of March 31, 2026 or December 31, 2025.
A reconciliation of the amount of unrecognized tax benefits is as follows:
SCHEDULE OF UNRECOGNIZED TAX BENEFITS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Beginning balances | $ | $ | ||||||
| Increases related to current year tax positions | - | - | ||||||
| Ending balances | $ | $ | ||||||
| 32 |
The Company is not currently under examination by federal, state, or foreign taxing authorities. As of March 31, 2026, the Company’s 2021 through 2024 tax years generally remain subject to examination for U.S. federal and state income tax purposes. In certain state jurisdictions where the Company may have nexus but has not filed income tax returns, the statute of limitations may remain open indefinitely. The Company’s foreign subsidiaries remain subject to examination by the relevant tax authorities in their respective jurisdictions.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act. AMC is still evaluating elections it may be eligible to make, so currently not possible to evaluate the impact of the law change to AMC.
| 14. | COMMITMENTS AND CONTINGENCIES |
In the ordinary course of business, the Company may be subject to various commitments and contingencies, including contractual obligations and potential legal matters.
The Company evaluates such matters in accordance with ASC 450, Contingencies, and records a liability when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible but not probable, or if the amount cannot be reasonably estimated, the Company discloses the nature of the contingency.
As of March 31, 2026 and December 31, 2025, the Company was not subject to any material pending or threatened litigation, claims, or assessments, and did not have any material commitments or contingencies that required accrual or disclosure in the condensed consolidated financial statements.
| 15. | SUBSEQUENT EVENTS |
In accordance with ASC Topic 855, Subsequent Events, which establishes general standards for the accounting and disclosure of events that occur after the balance sheet date but before the financial statements are issued, the Company has evaluated all events and transactions that occurred after March 31, 2026 through the date the consolidated financial statements were issued.
Based on this evaluation, management determined that there were no subsequent events that required recognition or disclosure in the accompanying consolidated financial statements.
| 33 |
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
Overview
Our Company and our Business Overview
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.
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.
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.
Recent Development and Future Objectives
Business Combination
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.
Private Investment in Public Equity (“PIPE”) Financing
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.
Revenue Streams
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.
Business Outlook
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.
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Executive Summary of Financial Performance
| Three months ended March 31, | ||||||||||||||||
| (in USD) | 2026 | 2025 | $ change | % Change | ||||||||||||
| Total Revenue | 1,184,616 | 1,792,525 | (607,909 | ) | (34 | )% | ||||||||||
| Cost of Revenue | (163,960 | ) | (1,304,195 | ) | 1,140,235 | 87 | % | |||||||||
| Gross Profit | 1,020,656 | 488,330 | 532,326 | 109 | % | |||||||||||
| Operating Income (Loss) | 128,539 | (747,753 | ) | 876,292 | NM | |||||||||||
| Net Income (Loss) | 145,601 | (77,177 | ) | 222,778 | NM | |||||||||||
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.
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.
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.
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.
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.
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.
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.
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.
Revision of Previously Issued Financial Statements
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.
Results of Operations
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.
The most significant drivers of the year-over-year changes include:
| ● | A shift away from inventory-intensive product sales toward higher-margin revenue-sharing arrangements | |
| ● | A substantial reduction in inventory impairment and excess stock | |
| ● | Improved cost alignment with revenue levels, particularly in logistics and marketing | |
| ● | Continued reliance on related-party transactions as a key component of both revenue and profitability |
These changes reflect a broader strategic repositioning of the Company toward a more sustainable and capital-efficient operating model.
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Revenue
| Three months ended March 31, | ||||||||||||||||
| Revenue Component | 2026 | 2025 | $ Change | % Change | ||||||||||||
| Product revenue | 102,018 | 1,221,803 | (1,119,785 | ) | (92 | )% | ||||||||||
| Product revenue – related party | 136,548 | 134 | 136,414 | 1,018 | % | |||||||||||
| Revenue share – related party | 946,050 | 570,588 | 375,462 | 66 | % | |||||||||||
| Total Revenue | 1,184,616 | 1,792,525 | (607,909 | ) | (34 | )% | ||||||||||
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.
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.
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.
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.
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.
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Cost of Revenue and Gross Profit
| Three months ended March 31, | ||||||||||||
| 2026 | 2025 | $ Change | ||||||||||
| Cost of Revenue | (163,960 | ) | (1,304,195 | ) | 1,140,235 | |||||||
| Gross Profit | 1,020,656 | 488,330 | 532,326 | |||||||||
| Gross Margin | 86 | % | 27 | % | 59 pts | |||||||
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%.
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.
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.
Operating Expenses
| Three months ended March 31, | ||||||||||||||||
| Expense Category | 2026 | 2025 | $ Change | % Change | ||||||||||||
| General & Administrative | 854,786 | 817,412 | 37,374 | 5 | % | |||||||||||
| Sales & Marketing | 14,332 | 404,112 | (389,780 | ) | (96 | )% | ||||||||||
| Research & Development | 22,999 | 14,559 | 8,440 | 58 | % | |||||||||||
| Total Operating Expenses | 892,117 | 1,236,083 | (343,966 | ) | (28 | )% | ||||||||||
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.
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.
Sales and marketing expenses decreased to $14,332 from $404,112, a decline of $389,780, or 96%, primarily due to reduced promotional activities.
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.
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.
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Other Income (Expense)
| Three months ended March 31, | ||||||||||||
| 2026 | 2025 | $ Change | ||||||||||
| Other income – related party | - | 683,898 | (683,898 | ) | ||||||||
| Other income (expense), net | (9,490 | ) | 7,185 | (16,675 | ) | |||||||
| Interest income | 28,651 | 318 | 28,333 | |||||||||
| Interest expense – related party | - | (16,502 | ) | 16,502 | ||||||||
| Total Other Income (loss), Net | 19,161 | 674,899 | (655,738 | ) | ||||||||
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.
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.
Liquidity and Capital Resources
Liquidity Overview
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.
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.
The Company’s liquidity position continues to be influenced by several key factors:
●
Operating performance, including gross margin and expense management
● Working capital dynamics, particularly receivables and payables, including those with related parties
● Access to external financing, including equity financing and capital markets transactions
● Inventory management, which affects cash utilized in operations
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.
Cash Flow Analysis
| Three months ended March 31, | ||||||||||||
| 2026 | 2025 | $ Change | ||||||||||
| Net cash (used in)/provided by operating activities | (391,580 | ) | 203,985 | (595,565 | ) | |||||||
| Net cash provided by (used in) investing activities | - | (305,624 | ) | 305,624 | ||||||||
| Net cash provided by (used in) financing activities | 20,085 | - | 20,085 | |||||||||
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Operating Activities
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.
Investing Activities
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.
Financing Activities
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.
Capital Resources
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.
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.
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.
Contractual Obligations and Commitments
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.
Lease Obligations (ASC 842)
The Company has operating lease arrangements for office space and facilities. As of March 31, 2026, lease liabilities totaled $96,051, representing the present value of future lease payments. The Company’s undiscounted future minimum lease payments total approximately $100,060. These obligations are not considered a significant liquidity burden.
Purchase Commitments
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.
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Related Party Obligations
Historically, the Company had obligations to related parties, which were reduced during 2025 through settlement using proceeds from financing activities (see Note 6). As of March 31, 2026, the Company continues to have transactions and balances with related parties in the ordinary course of business; however, outstanding related-party obligations are not material to the Company’s consolidated financial statements.
Other Commitments and Contingencies
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.
Overall Liquidity Assessment
As of March 31, 2026, the Company’s liquidity position remains strong following the financing activities completed in December 2025. While operating cash flows for the three months ended March 31, 2026 were negative, such usage was primarily driven by working capital timing and does not necessarily reflect a deterioration in underlying operating performance.
The Company’s current liquidity, combined with improved operating performance and reduced reliance on related-party financing, provides a solid financial foundation. However, future liquidity will depend on the Company’s ability to sustain operating performance, effectively manage working capital, and access external financing if needed.
Management believes the Company is well-positioned to meet its near-term obligations and support its ongoing operations and strategic initiatives.
Critical Accounting Policies and Estimates
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.
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.
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Revenue Recognition (ASC 606)
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.
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:
| ● | E-commerce platform sales | |
| ● | Related-party revenue-sharing arrangements (see Note 6 – Related Party Transactions) |
This assessment requires evaluation of factors such as control over goods or services, inventory risk, pricing discretion, and responsibility for fulfillment.
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.
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.
Inventory Valuation (ASC 330)
Inventory is stated at the lower of cost or net realizable value. Cost is determined using standard costing methods, which approximate actual costs.
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.
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.
Allowance for Expected Credit Losses (ASC 326)
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.
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.
While historical credit losses have been limited, changes in the financial condition of related parties or business relationships could result in increased credit loss provisions in future periods.
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Warranty Liabilities
The Company provides warranties on certain products and recognizes a liability for estimated warranty costs at the time of sale.
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.
Variable Interest Entity (VIE) Consolidation (ASC 810)
The Company evaluates its involvement with variable interest entities in accordance with ASC 810. A VIE is consolidated if the Company is determined to be the primary beneficiary.
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.
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.
Related Party Transactions (ASC 850)
The Company engages in transactions with related parties, including revenue-sharing arrangements and product sourcing (see Note 6).
Accounting for related-party transactions requires judgment in determining the appropriate revenue recognition treatment, classification, and presentation. Because these transactions may not be conducted on an arm’s-length basis, there is an increased risk of misstatement if terms are not properly evaluated.
The Company monitors related-party balances and transactions on an ongoing basis to ensure appropriate recognition and disclosure.
Forward Purchase Agreement
In connection with the Business Combination completed in December 2025, the Company entered into a Forward Purchase Agreement (“FPA”) with Harraden Circle Investments. Under the terms of the arrangement, the Company funded prepayments in exchange for the future settlement of shares of its common stock.
During 2025, the Company funded prepayments under the arrangement and received partial settlements. As of December 31, 2025 and March 31, 2026, an FPA subscription receivable of $1,678,678 remained outstanding.
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.
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.
Income Taxes (ASC 740)
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.
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.
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This assessment requires judgment regarding:
| ● | Future taxable income | |
| ● | Timing of reversals of temporary differences | |
| ● | Tax planning strategies |
Changes in these assumptions could result in adjustments to valuation allowances and income tax expense.
Sensitivity of Estimates and Judgments
The Company’s financial results are particularly sensitive to changes in estimates related to:
| ● | Revenue recognition (principal vs. agent) | |
| ● | Inventory valuation and impairment | |
| ● | Collectability of related-party receivables | |
| ● | VIE consolidation conclusions |
A change in any of these assumptions could materially affect reported revenue, gross profit, net income, and financial position.
For example:
| ● | A change in principal vs. agent conclusion could significantly alter reported revenue and cost of revenue | |
| ● | A modest increase in inventory obsolescence assumptions could materially reduce gross margin | |
| ● | Delays in collection of related-party receivables could increase credit loss provisions |
Management continuously reviews these estimates and assumptions and adjusts them as necessary based on evolving business conditions.
Recently Issued Accounting Pronouncements
For a discussion of our new or recently adopted accounting pronouncements, see Note 2, Recent issued accounting pronouncements, to our consolidated financial statements included elsewhere in this annual report.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the consolidated financial statements and notes thereto included elsewhere in this annual report.
Off-Balance Sheet Arrangements
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.
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.
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The Company does not have any material guarantees, retained interests in transferred assets, special purpose entities, or other undisclosed commitments that would be considered off-balance sheet arrangements.
Management believes that the absence of material off-balance sheet arrangements reduces the Company’s exposure to contingent liabilities and supports transparency in its financial reporting.
Quantitative and Qualitative Disclosures About Market Risk
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.
Foreign Currency Risk
A portion of the Company’s transactions are denominated in currencies other than the U.S. dollar, particularly Renminbi (RMB). As a result, fluctuations in exchange rates may affect revenue, cost of revenue, and operating expenses when translated into U.S. dollars.
A strengthening of the U.S. dollar relative to foreign currencies may reduce reported revenue and margins, while a weakening of the U.S. dollar may have the opposite effect. The Company does not currently use derivative instruments to hedge foreign currency risk.
Interest Rate Risk
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.
Concentration Risk
The Company is exposed to concentration risk due to its reliance on related-party transactions for both revenue and procurement. Changes in the financial condition or operating performance of these related parties could materially affect the Company’s results.
Sensitivity Analysis
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.
Inflation and Economic Conditions
The Company’s operations are subject to the impact of inflation and broader economic conditions, which may affect both costs and demand.
Cost Impacts
Inflation may increase the cost of components, manufacturing, logistics, and labor. These cost increases may not be fully recoverable through price adjustments, particularly in a competitive market environment where pricing pressure is significant.
Demand Impacts
The Company’s products are generally considered discretionary consumer purchases. As a result, economic downturns, reduced consumer confidence, or higher interest rates may negatively impact demand for the Company’s products.
Supply Chain Considerations
Global supply chain conditions, including component availability and shipping costs, may also affect the Company’s ability to procure inventory and maintain margins.
The Company actively monitors these factors and seeks to mitigate their impact through pricing strategies, cost management initiatives, and supply chain optimization.
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Item 3 – Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4 – Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026, as required by Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026 because of the material weaknesses in internal control over financial reporting described below.
The material weaknesses that have been identified for AMC are as follows:
| ● | Lack of Experienced Accounting Team - AMC lacks qualified in-house accounting staff and resources with adequate knowledge of U.S. GAAP, and proper period-end financial closing and accrual processes. A third-party consulting firm has been engaged to prepare financial statements and footnote disclosures in accordance with U.S. GAAP. | |
| ● | Lack of Duty Segregations - The Company separates the duties at certain areas, but there is only one person responsible for various functions of the Company, including processing payments and Human Resource functions. All other individuals involved in these processes are engaged through independent contractor roles. | |
| ● | Lack of sufficient inventory management process and control system - AMC does not have a sufficient inventory management process or control system. | |
| ● | Lack of proper approval for related party transactions - AMC lacks a formal approval process for related party transactions. |
The Company does not currently maintain a formal internal audit function, which management considered in evaluating the effectiveness of its control environment.
These material weaknesses could result in misstatements of account balances or disclosures that would not be prevented or detected on a timely basis. Accordingly, management concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2026.
Remediation Plan
We have begun to take, and intend to continue taking, steps to remediate the material weaknesses described above. Our remediation efforts include strengthening our finance and accounting function, enhancing review and approval procedures, formalizing policies and procedures, and improving the design and documentation of controls over financial reporting and related party transactions. However, the material weaknesses cannot be considered remediated until the applicable controls have been designed, implemented, operated for a sufficient period of time, and management has concluded, through testing, that such controls are operating effectively. This remediation process will require additional time and expense.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II - Other Information
Item 5 – Other Information
During
the quarter ended March 31, 2026, no director or officer
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Item 6 – Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the Inline XBRL document. |
* Filed herewith
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AMC ROBOTICS CORPORATION | ||
| Dated: May 18, 2026 | By. | /s/ Shengwei Da |
| Shengwei Da | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: May 18, 2026 | By. | /s/ Min Ma |
| Min Ma | ||
| VP, Finance | ||
| (Principal Financial and Accounting Officer) | ||
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