Megan Holdings swings to MYR5.83M half-year loss
Management believes working capital will be sufficient for at least 12 months, although cash alone was insufficient for forecast operating outflows.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Megan Holdings Limited (MGN) reported unaudited revenue of MYR12,777,311 for the six months ended June 30, 2026, down 8.4% from MYR13,944,813 a year earlier. It recorded a net loss of MYR5,834,069, compared with net income of MYR1,879,282. Gross profit was MYR1,477,311 and gross margin was 11.6%, versus 16.6%; general and administrative expenses rose to MYR4,180,890 from MYR357,370, and income tax expense was MYR2,774,576.
Operating activities used MYR24,198,827, versus MYR806,763 provided a year earlier; financing activities provided MYR27,345,920, including MYR29,756,713 of net proceeds from ordinary-share issuance. At June 30, 2026, cash was MYR325,817 and marketable securities were MYR33,237,789. Management said cash alone was insufficient for forecast operating outflows over the next 12 months, but believes working capital will cover anticipated needs for at least that period. Gross receivables of MYR28,182,125 were due from two customers and more than 150 days past due.
Positive
- None.
Negative
- Revenue declined 8.4% to MYR12,777,311 in the six-month period.
- Net results shifted from MYR1,879,282 income to a MYR5,834,069 loss.
- Operating cash flow shifted to MYR24,198,827 used, from MYR806,763 provided.
Filing Explained
Two customers signed an installment schedule for October 2026 through March 2027, setting a collection timetable rather than reporting completed payment.
Megan Holdings reports that the offering issued 691,667 ordinary shares; reported shares outstanding rose from 541,667 at
The filing says these share figures are retroactively restated for a 1-for-30 share consolidation that took effect on Nasdaq on
Both customers signed plans to settle their outstanding receivable balances in six monthly installments from
Key Figures
Key Terms
percentage-of-completion method financial
contract liabilities financial
expected credit losses financial
working capital financial
modified retrospective method technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were MGN's revenue and net result for the six months ended June 30, 2026?
When are MGN's overdue receivables due to be settled?
What resources did MGN cite to support working capital for the next 12 months?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September
Commission File Number:
B-01-07, Gateway Corporate Suites
Gateway Kiaramas
No.1, Jalan Desa Kiara
50480 Mont Kiara
Kuala Lumpur, Malaysia
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Interim Earnings Result for the Six Months Ended June 30, 2026 | |
| 101.INS | Inline XBRL Instance 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 (formatted as Inline XBRL and contained in Exhibit 101) |
1
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.
| Date: September 25, 2026 | Megan Holdings Limited | |
| By: | /s/ Hoo Wei Sern | |
| Name: | Hoo Wei Sern | |
| Title: | Executive Chairman, Chief Executive Officer and Executive Director | |
2
Exhibit 99.1
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
RESULTS OF OPERATIONS
The following table sets forth a summary of our unaudited interim condensed consolidated statements of operations for the periods ended June 30, 2026 and 2025.
| For the period ended June 30, | ||||||||||||
| 2025 (Unaudited) | 2026 (Unaudited) | 2026 (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Revenue | 13,944,813 | 12,777,311 | 3,130,159 | |||||||||
| Cost of revenue | (11,632,233 | ) | (11,300,000 | ) | (2,768,251 | ) | ||||||
| Gross profit | 2,312,580 | 1,477,311 | 361,909 | |||||||||
| General and administrative expenses | (357,370 | ) | (4,180,890 | ) | (1,024,226 | ) | ||||||
| Interest expenses | (12,667 | ) | (10,909 | ) | (2,672 | ) | ||||||
| Reversal of allowance/(allowance) for expected credit losses | 982,000 | (1,409,106 | ) | (345,200 | ) | |||||||
| Income from operations | 2,924,543 | (4,123,594 | ) | (1,010,189 | ) | |||||||
| Other income/(expenses), net | (455,347 | ) | 1,064,101 | 260,681 | ||||||||
| Income/(Loss) before income tax | 2,469,196 | (3,059,493 | ) | (749,508 | ) | |||||||
| Income tax expense | (589,914 | ) | (2,774,576 | ) | (679,710 | ) | ||||||
| Net income/(loss) | 1,879,282 | (5,834,069 | ) | (1,429,218 | ) | |||||||
Comparison of Periods Ended June 30, 2026 and 2025
Revenue
| For the Six Months Ended June 30, | ||||||||||||||||||||
| 2025 (Unaudited) | 2026 (Unaudited) | |||||||||||||||||||
| MYR | % | MYR | US$ | % | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Development of new aquaculture and agriculture farms | — | — | — | — | 0.0 | |||||||||||||||
| Upgrading of aquaculture and agriculture farms | 13,868,859 | 99.5 | 12,777,311 | 3,130,159 | 100.0 | |||||||||||||||
| Sales of industrial supplies | 75,954 | 0.5 | — | — | 0.0 | |||||||||||||||
| Total Revenue | 13,944,813 | 100 | 12,777,311 | 3,130,159 | 100.0 | |||||||||||||||
During the six months periods ended June 30, 2025 and 2026, revenue from development of new aquaculture and agriculture farms accounted for Nil% of the total revenue in both periods, while revenue from upgrading of aquaculture and agriculture farms accounted for 99.5% and 100.0% of the total revenue, respectively. In addition, revenue from sales of industrial supplies accounted for 0.5% and Nil% during the six months periods ended June 30, 2025 and 2026 respectively.
Revenue decreased by MYR1,167,502, or 8.4%, from MYR13,944,813 for the six months period ended June 30, 2025 to MYR12,777,311 (US$3,130,159) for the six months period ended June 30, 2026.
The Company currently generates its revenue by the below sources:
(a) Development of new aquaculture and agriculture farms
The Company currently generates revenue from the development of new aquaculture and agriculture farms. The Company is typically contracted through invitation to tender from or corporate negotiation with existing or potential customers in Malaysia. The Company primarily responsible for the fulfilling the promise to provide the designs and develops aquaculture and agriculture farms based on customers’ specific needs and adding value to the inputs by combining them in accordance with an architectural and engineering plan so that they are worth more as a scalable solution versus as individual components. The contract does not provide any post-contract customer warranty, support, or upgrades and there is no retention withheld by customers. The duration of the development period primarily between 6 to 18 months. The Company has discretion in establishing the price for the specified services.
In general, the design and builds of farming are mainly consist of four components:
| ● | Irrigation System |
| ● | Earthwork |
| ● | Water Discharge System |
| ● | Electrical Works |
The design of aquaculture and agriculture farms can have a significant impact on the productivity, efficiency, and sustainability of the farm. Some important factors to consider when designing aquaculture and agriculture farms include site selection, infrastructure design and sustainable practices.
The Company recognizes revenue using the percentage-of-completion method, based primarily on contract costs incurred to date compared to total estimated contract costs. The percentage-of-completion method (an input method) is the most representative depiction of the Company’s performance because it directly measures the value of the services or products transferred to the customer. Subcontractor, building materials, labor and equipment are included in revenue and cost of revenue when management believes that the Company is acting as a principal rather than as an agent (e.g., the Company integrates the materials and labor into the deliverable promised to the customer or is otherwise primarily responsible for fulfillment and acceptability of the materials and labor). The performance obligation to transfer the completed products are not separately identifiable, which is evidencing by the fact that the Company provides a significant service of integrating the goods and services into products for which the customer has contracted. As such, the Company’s contracts typically contain one single performance obligation to complete a defined construction project. The Company currently does not have any modification of contract and the contract currently does not have any variable consideration. The transaction price is clearly identifiable within service contracts. Historically, any contract acquisition costs have been immaterial; in the event that such costs arose, the Company expenses such costs incurred as periodic cost.
Recognition of revenue and cost of revenue for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and measurement of progress toward completion. Management believes it maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. In the event that an estimated losses on uncompleted contracts may occur based on evidence that indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion, a provision for the loss of the full amount will be recognized to the result of operations. Contract costs consist of costs on contracts, including labor, machine rental cost, materials, and amounts payable to subcontractors.
2
The Company’s contracts set forth payment terms that require the customer to make payment within 90 days of billing which is triggered by the Company reaching the milestone to bill the customer. Management does not believe that its contracts include a significant financing component because the period between delivery or the contracting services to the customer and the time of payment does not typically exceed one year.
The Company has no obligations for returns, refunds, or similar obligations of its projects with customers.
For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to development of new aquaculture and agriculture farms provided.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. The Company considers the guidance of control in ASC 340-40, there were no incremental costs incurred for the six-month ended June 30, 2025 and 2026.
(b) Upgrading of aquaculture and agriculture farms
Revenue from upgrading service contracts is generally between 3 to 18 months, which the Company primarily responsible for the fulfilling the promise to provide technical support and labor services for upgrading of aquaculture and agriculture farms during the contracted periods and adding value to the inputs by combining them in accordance to an architectural and engineering plan so that they are worth more as a scalable solution versus as individual components. The Company has discretion in establishing the price for the specified services.
For aquaculture farms (particularly shrimp farms), the focus areas of the works include ensuring proper water levels and quality, aeration and circulation systems and water intake, distribution, and discharge systems of shrimp ponds. For the agriculture farms (particularly pineapple farms), the focus area of the works is soil preparation which involves the improvement of soil structure and aeration. The upgrading services considered to be one single performance obligation since the work procedures are interrelated and affect the functions of each other like the seawater intake system, water distribution system, shrimp ponds, cables, paddle wheels, and water discharge system and work in conjunction are to ensure the farm operates effectively.
The Company recognizes revenue from upgrading of aquaculture and agriculture farms using the percentage-of-completion method, based primarily on contract costs incurred to date compared to total estimated contract costs. The percentage-of-completion method (an input method) is the most representative depiction of the Company’s performance because it directly measures the value of the services or products transferred to the customer. Subcontractor, building materials, labor and equipment are included in revenue and cost of revenue. The performance obligation to transfer the completed products are not separately identifiable, which is evidencing by the fact that the Company provides a significant service of integrating the goods and services into products for which the customer has contracted. As such, the Company’s contracts typically contain one single performance obligation to complete a defined upgrading services. The Company currently does not have any modification of contract and the contract currently does not have any variable consideration. The transaction price is clearly identifiable within service contracts. Historically, any contract acquisition costs have been immaterial; in the event that such costs arose, the Company expenses such costs incurred as periodic cost.
The Company’s contracts set forth payment terms that require the customer to make payment within 90 days of billing which is triggered by the Company reaching the milestone to bill the customer. Management does not believe that its contracts include a significant financing component because the period between delivery or the contracting services to the customer and the time of payment does not typically exceed one year.
The Company has no obligations for returns, refunds, or similar obligations of its projects with customers.
For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to upgrading of new aquaculture and agriculture farms provided.
3
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. The Company considers the guidance of control in ASC 340-40, there were no incremental costs incurred for the or the six-month ended June 30, 2025 and 2026.
(c) Sales of industrial supplies
The Company also generates revenue from sales of industrial supplies. The Company typically receives purchase orders from its customers which will set forth the terms and conditions including the transaction price, products to be delivered, terms of delivery, and terms of payment. The terms serve as the basis of the performance obligations that the Company must fulfil in order to recognize revenue. The key performance obligation is the delivery of the industrial supplies to the customer at their specified location at which point control to that asset passes to the customer. The completion of this earning process is evidenced by a written customer acceptance indicating receipt of the product. Typical payment terms set forth in the invoice is 30 days from the invoice date.
The industrial supplies were delivered directly to customers by the suppliers and relevant shipping and handling costs for the delivery will be charged to cost of revenue once incurred.
The transaction price does not include variable consideration related to returns or refunds as the contracts do not include provisions that allow for sales refunds or returns of products. For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to the sale of industrial supplies.
The Company is a principal and records revenue on a gross basis as the Company is primarily responsible for fulfilling the goods or services to the customers, is subject to inventory risk, has discretion in establishing pricing and the ability to direct the control of the promised goods before transferring those goods to the customers.
Direct cost of revenues
The cost of revenue primarily consists of subcontracting cost, and purchase of building material and rental of machinery.
The following table sets forth our cost of revenue by sales categories for the periods indicated.
| For the period ended June 30, | ||||||||||||||||||||
| 2025 (Unaudited) | 2026 (Unaudited) | |||||||||||||||||||
| MYR | % of revenue |
MYR | USD | % of revenue |
||||||||||||||||
| Development of new aquaculture and agriculture farms | — | — | % | — | — | 0.0 | ||||||||||||||
| Upgrading of aquaculture and agriculture farms | 11,568,375 | 83.0 | % | 11,300,000 | 2,768,251 | 88.4 | ||||||||||||||
| Sales of industrial supplies | 63,858 | 0.4 | % | — | — | 0.0 | ||||||||||||||
| Total cost of revenue | 11,632,233 | 83.4 | % | 11,300,000 | 2,768,251 | 88.4 | ||||||||||||||
In our cost of revenue, the cost of development of new aquaculture and agriculture farms as well as upgrading of aquaculture and agriculture farms is mainly comprised of subcontracting costs. The cost of sales of industrial supplies mainly includes sourcing of building materials. The cost of revenue decreased from MYR11,632,233 for the six months period ended June 30, 2025 to MYR11,300,000 (US$2,768,251) for the six months period ended June 30, 2026, representing a decrease of 2.9%.
4
Gross profit
For the six months periods ended June 30, 2025 and 2026, our gross profit was MYR2,312,580 and MYR1,477,311 (US$361,909), respectively, and our gross profit margins were 16.6% and 11.6%, respectively. The decrease in gross profit margin is mainly because of the increase of the costs for our projects including the cost of building material and subcontract cost.
General and administrative expenses
General and administrative expenses increased by MYR3,823,520, from MYR357,370 for the six months period ended June 30, 2025 to MYR4,180,890 (US$1,024,226) for the six months period ended June 30, 2026. General and administrative expenses consisted primarily of salary and welfare expenses of MYR200,717 (June 30, 2025: MYR205,900), tax penalties of MYR1,071,285 (June 30, 2025: nil) and professional service fees of MYR2,787,069 (June 30, 2025: MYR22,370), which were incurred by Megan Holdings Limited, the holding company.
Interest expenses
Interest expenses consisted primarily of interest expenses from finance lease liabilities and bank loan. For the six months periods ended June 30, 2025 and 2026, interest expenses were MYR12,667 and MYR10,909 (US$2,672), respectively.
Reversal of allowance/(allowance)/ for expected credit losses
A reversal of allowance for expected credit losses of MYR982,000 was recognized for the six months period ended June 30, 2025. An allowance for expected credit losses of MYR1,409,106 (US$345,200) was recognized for the six months period ended June 30, 2026, representing 5% of the accounts receivable balance of MYR28,182,125 as of June 30, 2026.
Other expenses
| For the period ended June 30, | ||||||||||||||||||||
| 2025 (Unaudited) |
2026 (Unaudited) |
|||||||||||||||||||
| MYR | % of revenue |
MYR | USD | % of revenue |
||||||||||||||||
| Dividend income | 11,223 | 0.1 | % | — | — | 0.0 | ||||||||||||||
| Fair value (loss)/gain on marketable securities | (512,903 | ) | (3.7 | )% | 1,063,898 | 260,631 | 8.3 | |||||||||||||
| Interest income | 46,333 | 0.3 | % | 203 | 50 | 0.0 | ||||||||||||||
| Total other expenses | (455,347 | ) | (3.3 | )% | 1,064,101 | 260,681 | 8.3 | |||||||||||||
Fair value (loss)/gain on marketable securities
During the six months periods ended June 30, 2025 and 2026, the fair value result on marketable securities moved from a loss of MYR512,903 to a gain of MYR1,063,898 (US$260,631), stated after investment charges of MYR782,467, mainly due to unrealized gains on the Group’s quoted equity holdings.
Income tax expense
Our income tax expense increased by MYR2,184,662, or 370.3%, from MYR589,914 for the six months period ended June 30, 2025 to MYR2,774,576 (US$679,710) for the six months period ended June 30, 2026, notwithstanding a loss before income tax of MYR3,059,493 for the current period. The charge for the current period comprises an underprovision of MYR2,765,139 in respect of the prior year and a deferred tax expense of MYR9,437, the significant underprovision is because of the underestimate of the income tax in year 2023 to year 2025. The effective tax rates were 23.9% and (90.7)% for the six months periods ended June 30, 2025 and 2026 respectively.
Net income/(loss)
Our result moved from net income of MYR1,879,282 for the six months period ended June 30, 2025 to a net loss of MYR5,834,069 (US$1,429,218) for the six months period ended June 30, 2026, a movement of MYR7,713,351. The movement was mainly due to an increase in general and administrative expenses of MYR3,823,520, the income tax charge of MYR2,774,576 and an allowance for expected credit losses of MYR1,409,106, partly offset by a fair value gain on marketable securities of MYR1,063,898.
5
Liquidity and Capital Resources
The Company’s accounts have been prepared assuming that the company will continue as a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with the expenditure requirements of the Company and repayment of the short-term debt facilities, if any, as and when they fall due.
The Company has considered whether there is substantial doubt about its ability to continue as a going concern. Cash flow from operations and capital contributions and advances from a director have been utilized to finance the working capital requirements of the Company.
As of June 30, 2026, the Company’s cash and cash equivalents amounted to MYR325,817. This represents a lower cash position relative to historical operating levels and is insufficient, on a standalone basis, to fund the Company’s forecasted operating cash outflows for the next twelve months. This condition required management to evaluate whether there is substantial doubt regarding the Company’s ability to continue as a going concern.
In evaluating this condition, management assessed the Company’s broader structural liquidity and overall financial solvency. The lower cash position is a temporary operational variance rather than a structural deficit. As of June 30, 2026, the Company maintains a robust balance sheet characterized by the following mitigants:
| ● | Net Current Asset Position: Current assets exceed current liabilities by MYR 72.1 million(USD 17.7 million), indicating strong capacity to settle short-term obligations. |
| ● | Net Asset Position: Total assets exceed total liabilities by MYR 72.5 million (USD 17.8 million), demonstrating overall corporate solvency and positive shareholder equity. |
| ● | High-Liquidity Investment in marketable securities: Included within the current asset position are MYR 33.2 million of investment securities recorded at fair market value. These assets consist entirely of Level 1 publicly traded equities and short-term government bonds that are unencumbered and traded in active markets. |
Management possesses both the explicit intent and the ability to liquidate these investment securities as necessary to fund daily operations and satisfy liabilities as they become due. Because these assets are highly liquid and carry no regulatory or debt-covenant restrictions, they function as an immediate secondary source of cash. Management’s internal stress-testing indicates that even under severe adverse market conditions—applying a significant discount to the current market value of these securities—the net realizable cash proceeds will be more than sufficient to bridge any operating cash shortfalls.
| As of | ||||||||||||
| December 31, 2025 (Audited) | June 30, 2026 (Unaudited) | June 30, 2026 (Unaudited) | ||||||||||
| MYR | MYR | US$ | ||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 172,025 | 325,817 | 79,818 | |||||||||
| Restricted cash | 12,090 | 12,090 | 2,962 | |||||||||
| Investments in marketable securities | 29,183,340 | 33,237,789 | 8,142,525 | |||||||||
| Accounts receivable, net | 31,050,630 | 26,773,019 | 6,558,799 | |||||||||
| Contract assets, net | — | — | — | |||||||||
| Deposits and other receivables | 33,428,420 | 101,285,108 | 24,812,618 | |||||||||
| Total current assets | 93,846,505 | 161,633,823 | 39,596,723 | |||||||||
| Current liabilities | ||||||||||||
| Accounts payable | 567,477 | 682,035 | 167,084 | |||||||||
| Contract liabilities | 9,848,141 | 49,745,891 | 12,186,646 | |||||||||
| Amount due to a director | 779 | 7,017 | 1,719 | |||||||||
| Amount due to a related party | 3,259,111 | 884,824 | 216,762 | |||||||||
| Accrued liabilities and other payables | 14,925,614 | 18,325,846 | 4,489,428 | |||||||||
| Bank loan | 33,637 | 25,157 | 6,163 | |||||||||
| Lease liabilities | 31,001 | 41,290 | 10,115 | |||||||||
| Deferred tax liabilities | — | 9,437 | 2,312 | |||||||||
| Income taxes payables | 17,202,927 | 19,768,065 | 4,842,740 | |||||||||
| Total current liabilities | 45,868,687 | 89,489,562 | 21,922,970 | |||||||||
| Working Capital | 47,977,818 | 72,144,261 | 17,673,753 | |||||||||
6
Accounts Receivable, net
Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 90 days from the date of invoice. In evaluating the collectability of receivable balances, the Company considers specific evidence including aging of the receivable, the client’s payment history, its current creditworthiness, current economic trends, industry trend analysis, and the credit history and financial conditions of the customers. The Company regularly reviews the adequacy and appropriateness of the allowance for expected credit losses. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. During the year ended December 31, 2025, the Company recorded an allowance for expected credit losses of MYR700,521 and a reversal of allowance for expected credit losses of MYR982,000. An allowance for expected credit losses of MYR1,409,106 was recognized for the six months period ended June 30, 2026, representing 5% of the accounts receivable balance of MYR28,182,125, the whole of which is due from two customers.
In assessing whether the contract meets the criteria in paragraph 606-10-25-1, the Company assesses whether it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the services that will be transferred to the customer. This includes assessing the entity’s history with this class of customer in accordance with paragraph 606-10-55-3B and its business practice of stopping service in response to customer nonpayment in accordance with paragraph 606-10-55-3C. Consequently, as part of this analysis, the entity does not consider the likelihood of payment for services that would not be provided in the event of the customer’s nonpayment because the entity is not exposed to credit risk for those services.
Our accounts receivable, net balance decreased by MYR4,277,611, or 13.8%, from MYR31,050,630 as of December 31, 2025 to MYR26,773,019 (US$6,558,799) as of June 30, 2026, after an allowance for expected credit losses of MYR1,409,106.
We strictly control outstanding receivables to contain credit risk and an impairment analysis is performed at the end of each period/year. Following the identification of doubtful debts, we will discuss with the relevant customers and report on their recoverability. Additionally, the Group makes specific bad debt write offs based on any specific knowledge the Group has acquired that might indicate that an account is uncollectible. Accounts receivable considered uncollectable are written off against allowances after exhaustive efforts at collection are made. The facts and circumstances of each account may require the Group to use substantial judgment in assessing its collectability. During the year ended December 31, 2025, an allowance for expected credit losses of MYR700,521 was recorded and a reversal of MYR982,000 was recognized in respect of long overdue accounts receivable. An allowance for expected credit losses of MYR1,409,106 was recognized for the six months period ended June 30, 2026, representing 5% of the accounts receivable balance of MYR28,182,125, the whole of which is due from two customers.
Contract assets, net
Contract assets are recorded when the progress to completion revenue earned on contracts exceeds amounts actually billed under the contract.
Deposits and other receivables
Deposits are mainly for rent, utilities and money deposited with certain vendors. These amounts are refundable and bear no interest. The short-term deposits usually have a one-year term and are refundable upon contract termination. Other receivables mainly represented advances to subcontractors of MYR820 and MYR101,134,288 (US$24,775,671) as of December 31, 2025 and June 30, 2026, respectively, for the Company's ongoing projects on agricultural farm improvement works and agricultural facility development works. These advances were made to facilitate procurement of construction materials, mobilization of manpower, rental of heavy machineries, and other related items for site works. The advances that was made to subcontractors will be progressively offset against subsequent progress claims over the next 6 to 9 months.
Deferred initial public offering costs
The Company follows the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred initial public offering (“IPO”) costs consist of underwriting, legal and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred IPO costs will be charged to shareholders’ equity netted against the proceeds upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred IPO costs, as well as additional expenses to be incurred, will be charged to statements of comprehensive income.
Investments in marketable securities
Investments in marketable securities, net, consist of investments in listed shares, which are listed on Bursa Malaysia. Marketable securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges with changes in fair value recorded in other income in the consolidated statements of comprehensive income. All changes in a marketable security’s fair value are reported in earnings as they occur, as such, the sale of a marketable security does not necessarily give rise to a significant gain or loss. Unrealized gains/(losses) due to fluctuations in fair value are recorded in the consolidated statements of comprehensive income. Declines in fair value below cost deemed to be other-than-temporary are recognized as impairments in the consolidated statements of comprehensive income.
Accounts payable
Accounts payable represents trade payables to vendors.
Contract liabilities
Contract liabilities are recorded when amounts billed under a contract exceed the progress towards completion of revenue earned under the contract. These payments are non-refundable and are recognized as revenue when the performance obligation is satisfied. As of December 31, 2025 and June 30, 2026, contract liabilities were MYR9,848,141 and MYR49,745,891 (US$12,186,646), respectively. The increase represents advances received from customers during the period for works not yet performed, previously carried within accounts payable.
7
Accrued liabilities and other payables
Accrued liabilities and other payables are primarily include salaries payable, payables to purchase of marketable securities and other accrual and payable.
Contractual obligations
The following tables summarized the contractual obligations of the Company as of June 30, 2026:
| Payments Due by Period (Unaudited) | ||||||||||||||||
| Less than | 2 to | More than | ||||||||||||||
| 1 year | 5 years | 5 years | Total | |||||||||||||
| MYR | MYR | MYR | MYR | |||||||||||||
| Contractual Obligations: | ||||||||||||||||
| Bank borrowings | 48,360 | 193,440 | 127,430 | 369,230 | ||||||||||||
| Lease liabilities | 46,410 | 74,269 | — | 120,679 | ||||||||||||
| Total contractual obligation | 94,770 | 267,709 | 127,430 | 489,909 | ||||||||||||
| Payments Due by Period (Unaudited) | ||||||||||||||||
| Less than | 2 to | More than | ||||||||||||||
| 1 year | 5 years | 5 years | Total | |||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| Contractual Obligations: | ||||||||||||||||
| Bank borrowings | 11,847 | 47,389 | 31,218 | 90,453 | ||||||||||||
| Lease liabilities | 11,369 | 18,194 | — | 29,564 | ||||||||||||
| Total contractual obligation | 23,217 | 65,583 | 31,218 | 120,017 | ||||||||||||
As of June 30, 2026, we did not have any capital expenditure commitment.
CASH FLOWS
Our use of cash primarily related to operating activities, capital expenditure and payment of dividends. We have historically financed our operations primarily through our cash flow generated from our operations. The following table sets forth a summary of our cash flows information for the periods indicated:
| For the Six Months Ended June 30, | ||||||||||||
| 2025 (Unaudited) | 2026 (Unaudited) | |||||||||||
| MYR | MYR | US$ | ||||||||||
| Net cash provided by/(used in) operating activities | 806,763 | (24,198,827 | ) | (5,928,178 | ) | |||||||
| Net cash used in investing activities | (576,342 | ) | (2,993,301 | ) | (733,293 | ) | ||||||
| Net cash (used in)/provided by financing activities | (24,184 | ) | 27,345,920 | 6,699,147 | ||||||||
| Increase in cash and cash equivalents | 206,237 | 153,792 | 37,676 | |||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 9,365 | 172,025 | 42,142 | |||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 215,602 | 325,817 | 79,818 | |||||||||
Operating activities
Our cash inflows from operating activities were principally from the receipt of revenue. Our cash outflow used in operating activities was principally for payment of staff costs and operating expenses.
For the six months period ended June 30, 2026, net cash used in operating activities was MYR24,198,827 (US$5,928,178), which primarily resulted from a net loss of MYR5,834,069 as adjusted for non-cash items and from changes in operating assets and liabilities. Adjustments primarily consisted of a fair value gain on marketable securities of MYR1,063,898, an allowance for expected credit losses of MYR1,409,106 and depreciation of MYR30,187. The movements in operating assets and liabilities were principally as below:
8
Changes in operating assets and liabilities mainly included:
| (i) | a decrease in accounts receivable of MYR2,868,505 (US$702,720); |
| (ii) | an increase in deposits and other receivables of MYR67,856,690 (US$16,623,391), mainly due to an increase in advances to subcontractors; |
| (iii) | an increase in contract liabilities of MYR39,897,750 (US$9,774,069), being advances received from customers for services not yet performed; |
| (iv) | an increase in accrued liabilities and other payables of MYR3,400,232 (US$832,982) and an increase in accounts payable of MYR114,558 (US$28,064), mainly due to amounts owing to stockbrokers and the provision for income tax penalty; |
| (v) | an increase in income taxes payables of MYR2,565,139 (US$628,402), mainly due to the tax provision recognized during the period. |
For the six months period ended June 30, 2025, net cash provided by operating activities was MYR806,763, which primarily resulted from changes in operating activities as adjusted for non-cash items, despite net income of MYR1,879,282. Adjustments for non-cash items primarily consisted of a fair value loss on marketable securities of MYR512,903 and a reversal of expected credit losses of MYR982,000. The movements in operating assets and liabilities were principally as below:
Changes in operating assets and liabilities mainly included:
| (i) | a decrease in accounts receivable of MYR31,892,254, mainly due to collections from customers; |
| (ii) | an increase in deposits and other receivables of MYR60,043,408, mainly due to an increase in advances to subcontractors; |
| (iii) | an increase in accounts payable of MYR1,454; |
| (iv) | an increase in contract liabilities of MYR27,343,000, mainly due to an increase of contract liabilities for services not yet performed for customers; |
| (v) | a decrease in accrued liabilities and other payables of MYR468,916, mainly due to payments made for consultant service fees and marketable securities yet to be paid; |
| (vi) | an increase in income taxes payables of MYR583,257, mainly due to an increase in tax provisions during the period. |
Investing Activities
For the six months period ended June 30, 2026, net cash used in investing activities was MYR2,993,301 (US$733,293), which was primarily driven by net purchases of marketable securities of MYR2,990,551 and purchases of property and equipment of MYR2,750.
For the six months period ended June 30, 2025, net cash used in investing activities was MYR576,342, which was primarily driven by net purchases of marketable securities of MYR576,082 and purchase of property and equipment of MYR260.
Financing Activities
For the six months period ended June 30, 2026, net cash provided by financing activities was MYR27,345,920 (US$6,699,147), which was primarily driven by as below:
| (1) | Proceeds from the offering completed on February 27, 2026, net of issue costs, amounted to MYR29,756,713 (US$7,289,739); |
| (2) | Net repayment to a related party, Star Sprite Limited, amounted to MYR2,374,287 (US$581,648), and an advance from a director, Darren Hoo Wei Sern, amounted to MYR6,238 (US$1,528); |
| (3) | Repayment of bank loan to Maybank Islamic Berhad amounted to MYR24,180 (US$5,924); and |
| (4) | Repayment of lease liabilities to Maybank Islamic Berhad amounted to MYR18,564 (US$4,548). |
9
For the six months period ended June 30, 2025, net cash used in financing activities was MYR24,184, which was primarily driven by as below:
| (1) | Repayment to a director, Darren Hoo Wei Sern, amounted to MYR56,132; |
| (2) | Advances from a related party, Star Sprite Limited, amounted to MYR74,657; and |
| (3) | Repayment of bank loan to Maybank Islamic Berhad amounted to MYR24,179, and repayment of lease liabilities amounted to MYR18,530. |
Working Capital Sufficiency
Notwithstanding of the net cash used in operating activities amounting to MYR24,198, for the six months ended June 30, 2026, principally reflecting advances paid to subcontractors for upgrading works, and cash and cash equivalents were MYR325,817 as of June 30, 2026. The Group therefore does not rely on its cash balance or operating cash flows to fund its requirements for the next twelve months. Its principal sources of liquidity over that period are:
| (1) | Marketable securities. Level 1 quoted equity securities with a fair value of MYR33.2 million as of June 30, 2026, of which MYR21.3 million remains after settling MYR11.9 million payable to stockbrokers for securities purchased. The securities are traded in active markets and can be realized as required; |
| (2) | Collection of accounts receivable. Accounts receivable of MYR28.2 million (MYR26.8 million net of the allowance for expected credit losses), which the Group's two customers have agreed to settle in six monthly instalments from October 2026 to March 2027. |
In addition, advances of MYR101.1 million already paid to subcontractors are being applied against the upgrading works in progress, which reduces the cash required to complete those projects.
Taking these sources and requirements into account, the Group believes its working capital will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date of this interim report.
CAPITAL EXPENDITURES
The Group is not anticipated to have any material capital expenditure in the next 12 months.
RELATED PARTY TRANSACTIONS AND BALANCES
Nature of relationships with related parties:
| Related parties | Relationship | December 31, 2025 | June 30, 2026 | June 30, 2026 | ||||||||||
| MYR | MYR | USD | ||||||||||||
| Advance to subcontractor: | ||||||||||||||
| VC Marine Sdn Bhd | Common director | 5,089,636 | 15,590,387 | 3,819,301 | ||||||||||
| Amount due to: | ||||||||||||||
| Star Sprite Limited | Common director | 3,259,111 | 884,824 | 216,762 | ||||||||||
| Amount due to: | ||||||||||||||
| Darren Hoo Wei Sern | Director | 779 | 7,017 | 1,719 | ||||||||||
The advances made to VC Marine is for the Company's ongoing projects on agricultural farm improvement works. These advances were made to facilitate mobilization of manpower, rental of heavy machineries, and other related items for site works. The advances that was made to subcontractors will be progressively offset against subsequent progress claims over the next 6 months. The terms of the advance are comparable to those provided to the Company's unrelated subcontractors.
The Company had an unsecured, interest-free, non-trade advance from a related party namely Star Sprite Limited amounting to MYR3,259,111 and MYR884,824 (US$216,762), respectively, as of December 31, 2025 and June 30, 2026.
The Company had an unsecured, interest-free, non-trade advance from director amounting to MYR779 and MYR7,017 (US$1,719), respectively, as of December 31, 2025 and June 30, 2026.
Related party transactions:
| Transaction nature | Name | June 30, 2025 | June 30, 2026 | June 30, 2026 | ||||||||||
| MYR | MYR | USD | ||||||||||||
| Net repayment of sub-contractor charges to | VC Marine Sdn Bhd | (5,089,636 | ) | (10,500,751 | ) | (2,572,452 | ) | |||||||
| Expenses paid on behalf of Company | Star Sprite Limited | 230,657 | — | — | ||||||||||
| Net advance from/(repayment to) director | Hoo Wei Sern | (67,858 | ) | 6,238 | 1,528 | |||||||||
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, and credit risk support or other benefits.
10
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| As of December 31, |
As of June 30, |
|||||||||||
| 2025 (Audited) |
2026 (Unaudited) |
2026 (Unaudited) |
||||||||||
| MYR | MYR | USD | ||||||||||
| (Note) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Restricted cash | ||||||||||||
| Investments in marketable securities | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Contract assets, net | — | — | — | |||||||||
| Deposits and other receivables | ||||||||||||
| Total current assets | ||||||||||||
| Non-current assets | ||||||||||||
| Property and equipment, net | ||||||||||||
| Deferred initial public offering costs | — | — | — | |||||||||
| Total non-current assets | ||||||||||||
| Total assets | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | ||||||||||||
| Contract liabilities | ||||||||||||
| Amount due to a director | ||||||||||||
| Amount due to a related party | ||||||||||||
| Accrued liabilities and other payables | ||||||||||||
| Bank loan | ||||||||||||
| Lease liabilities | ||||||||||||
| Deferred tax liabilities | — | |||||||||||
| Income taxes payables | ||||||||||||
| Total current liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Bank loans | ||||||||||||
| Lease liabilities | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Shareholders’ equity | ||||||||||||
| Ordinary shares, USD | ||||||||||||
| Additional paid-in capital* | ||||||||||||
| Retained earnings | ||||||||||||
| Equity attributable to owners of the Company | ||||||||||||
| Non-controlling interest | ||||||||||||
| Total equity | ||||||||||||
| Total liabilities and shareholders’ equity | ||||||||||||
11
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the period ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| MYR | MYR | USD | ||||||||||
| Revenue | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Interest expenses | ( | ) | ( | ) | ( | ) | ||||||
| Reversal of allowance/(allowance) expected credit losses | ( | ) | ( | ) | ||||||||
| Income/(loss) from operations | ( | ) | ( | ) | ||||||||
| Other income/(expenses) | ||||||||||||
| Fair value (loss)/gain on marketable securities | ( | ) | ||||||||||
| Dividend income | — | — | ||||||||||
| Interest income | ||||||||||||
| Total other (expense)/income, net | ( | ) | ||||||||||
| Income/(Loss) before income tax | ( | ) | ( | ) | ||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net income/(loss) | ( | ) | ( | ) | ||||||||
| Net income/(loss) and total comprehensive income attributable to: | ||||||||||||
| Equity holders of the Company | ( | ) | ( | ) | ||||||||
| Non-controlling interest | ( | ) | — | — | ||||||||
| Total | ( | ) | ( | ) | ||||||||
| Weighted average number of ordinary shares basic and diluted* | ||||||||||||
| Earnings/(Loss)/ per share attributable to ordinary shareholders basic and diluted* | ( | ) | ( | ) | ||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
12
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Ordinary Shares* | Additional | Non- | Total | |||||||||||||||||||||||||
| No. of shares* |
Amount | paid-in capital* |
Retained earnings |
Total | controlling interest |
shareholders’ equity |
||||||||||||||||||||||
| MYR | MYR | MYR | MYR | MYR | MYR | |||||||||||||||||||||||
| Balance as of January 1, 2025 | ||||||||||||||||||||||||||||
| Share of loss by non-controlling interest | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||
| Balance as of June 30, 2025 | ||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | ||||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to the offering | — | — | ||||||||||||||||||||||||||
| Share of loss by non-controlling interest | — | — | — | — | — | — | — | |||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||
| Balance as of June 30, 2026 | ||||||||||||||||||||||||||||
| Balance as of June 30, 2026 (USD) | ||||||||||||||||||||||||||||
13
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| 2025 | 2026 | 2026 | ||||||||||
| MYR | MYR | USD | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net income/(loss) | ( | ) | ( | ) | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Allowance for/(reversal of) expected credit losses | ( | ) | ||||||||||
| Interest expenses | ||||||||||||
| Deferred income taxes | — | |||||||||||
| Foreign exchange loss | — | |||||||||||
| Fair value loss/(gain) on marketable securities | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Contract assets, net | — | — | ||||||||||
| Deposits and other receivables | ( | ) | ( | ) | ( | ) | ||||||
| Accounts payable | ||||||||||||
| Contract liabilities | ||||||||||||
| Accrued liabilities and other payables | ( | ) | ||||||||||
| Income taxes payables | ||||||||||||
| Cash provided by/(used in) operating activities | ( | ) | ( | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from disposal of marketable securities | ||||||||||||
| Purchases of marketable securities | ( | ) | ( | ) | ( | ) | ||||||
| Cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Acquisition of non-controlling interests | — | — | — | |||||||||
| (Repayment to)/Advance from a director | ( | ) | ||||||||||
| Advance from/(Repayment to) a related party | ( | ) | ( | ) | ||||||||
| Proceeds from issuance of ordinary shares, net of issue costs | — | |||||||||||
| Repayments of bank loan | ( | ) | ( | ) | ( | ) | ||||||
| Repayment of lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Cash (used in)/provided by financing activities | ( | ) | ||||||||||
| Net changes in cash and cash equivalents | ||||||||||||
| Cash and cash equivalents as of beginning of the period | ||||||||||||
| Cash and cash equivalents as of the end of the period | ||||||||||||
14
MEGAN HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS OVERVIEW
Company Overview
Megan Holdings Limited (the “Company”) is a holding company incorporated on December 7, 2022, under the laws of the Cayman Islands. The Company has no substantial operations other than as an investment holding of the entire share capital of Megan Mezanin Sdn Bhd (“MMSB”), a Malaysia company incorporated on February 13, 2020.
The Company, through its wholly-owned subsidiary, MMSB, provides development, construction and maintenance of aquaculture and agriculture farms and related works. Currently, the Company’s main revenue segment is generated from upgrading works carried out for the Company’s customers’ existing aquaculture farms, known as Umas Farm and Wakuba Farm, both located in Tawau, Sabah, Malaysia. The Company also undertake maintenance works for the Company’s customers’ farms, on an ad-hoc basis. To supplement the services to the Company’s customers, the Company are also able to assist customers to source for industrial supplies and provide rental of machinery to them.
The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities:
Percentage of effective ownership | ||||||||||||||
| Name | Background | December 31, 2025 | June 30, 2026 | Ownership | Principal Activities | |||||||||
| Megan Holdings Limited (“MHL”) | – A Cayman Islands company – Incorporated on December 7, 2022 – Issued share capital of USD0.0001 | N/A | N/A | |||||||||||
| Megan Mezanin Sdn Bhd (“MMSB”) | – A Malaysian company – Incorporated on February 13, 2020 – Issued share capital of MYR250,000 | % | % | |||||||||||
| Megan Technologies Sdn Bhd (“MTSB”) | – A Malaysian company – Incorporated on March 18, 2024 – Issued share capital of MYR200,000 | % | % | |||||||||||
| Megan Bio-Development Sdn Bhd (“MBDSB”) | – A Malaysian company – Incorporated on January 7, 2026 – Issued share capital of MYR100 | % | % | |||||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
Principles of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
15
Use of estimates and assumptions
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but not limited to, allowance for expected credit losses, revenue recognition and uncertain tax position. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.
Risks and uncertainties
The main operations of the Company are located in Malaysia. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Malaysia, as well as by the general state of the economy in Malaysia. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in Malaysia. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, such experience may not be indicative of future results.
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:
| December 31, 2025 | June 30, 2026 | |||||||
| Year-end spot rate | USD | USD | ||||||
| Average rate | USD | USD | ||||||
Convenience translation
Translations of balances in the unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of income and comprehensive income, unaudited interim condensed consolidated statements of changes in shareholders’ equity and unaudited interim condensed consolidated statements of cash flows from MYR into USD as of June 30, 2026 are solely for the convenience of the readers and are calculated at the rate of USD
Fair value measurements
The Company’s financial instruments, including cash and cash equivalents, investments in marketable securities, account receivables, contract assets, deposits and other receivables, account payables, amount due to a director, accrued liabilities and other payables and operating lease liabilities, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosing the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the unaudited condensed interim consolidated balance sheets are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
16
The following table presents information about the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and June 30, 2026 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| December 31, 2025 | Quoted Prices in Active Market (Level 1) | Significant Other Observable Input (Level 2) | Significant Other Unobservable Input (Level 3) | |||||||||||||
| MYR | MYR | MYR | MYR | |||||||||||||
| Assets: | ||||||||||||||||
| Investments in marketable securities | — | — | ||||||||||||||
| June 30, 2026 | Quoted Prices in Active Market (Level 1) | Significant Other Observable Input (Level 2) | Significant Other Unobservable Input (Level 3) | |||||||||||||
| MYR | MYR | MYR | MYR | |||||||||||||
| Assets: | ||||||||||||||||
| Investments in marketable securities | — | — | ||||||||||||||
Fair value estimates are made at a specific point in time based on relevant market information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Restricted cash
Restricted cash represents the fixed deposits that have been pledged to lenders as security for the Company’s outstanding bank loan.
Accounts receivable, net
Accounts receivable include trade accounts due from customers. Accounts are considered overdue after
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Currently, the Company’s contracts do not include such variable amount. During the year, there is no provision for onerous contracts.
Contract assets, net
Contract assets are recorded when the progress to completion revenue earned on contracts exceeds amounts actually billed under the contract.
17
Deposits and other receivables
Deposits are mainly for rent, utilities and money deposited with certain vendors. These amounts are refundable and bear no interest. The short-term deposits usually have a one-year term and are refundable upon contract termination. Other receivables mainly represented advances to subcontractors of MYR
Deferred initial public offering costs
The Company follows the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred initial public offering (“IPO”) costs consist of underwriting, legal and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred IPO costs will be charged to shareholders’ equity netted against the proceeds upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred IPO costs, as well as additional expenses to be incurred, will be charged to statements of comprehensive income.
Investments in marketable securities
Investments in marketable securities, net, consist of investments in listed shares, which are listed on Bursa Malaysia. Marketable securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges with changes in fair value recorded in other income in the consolidated statements of comprehensive income. All changes in a marketable security’s fair value are reported in earnings as they occur, as such, the sale of a marketable security does not necessarily give rise to a significant gain or loss. Unrealized gains/(losses) due to fluctuations in fair value are recorded in the consolidated statements of comprehensive income. Declines in fair value below cost deemed to be other-than-temporary are recognized as impairments in the consolidated statements of comprehensive income.
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows
| Expected useful lives | |||
| Office furniture and fittings | |||
| Office equipment | |||
| Motor vehicle | |||
| Renovations | |||
| Freehold property |
Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of comprehensive income. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Impairment for long-lived assets
Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assess the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2025, June 30, 2026, no impairment of long-lived assets was recognized.
18
Accounts payable
Accounts payable represents trade payables to vendors.
Contract liabilities
Contract liabilities are recorded when amounts billed under a contract exceed the progress towards completion of revenue earned under the contract. These payments are non-refundable and are recognized as revenue when the performance obligation is satisfied.
Accrued liabilities and other payables
Accrued liabilities and other payables are primarily include salaries payable, payables to purchase of marketable securities and other accrual and payable.
Leases
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding operating lease right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Group are accounted for as operating leases.
The Company determine if an arrangement is a lease at inception. On the Company’s balance sheet, the corporate office lease is included in operating lease right-of-use (“ROU”) asset, current portion of operating lease liability and operating lease liability, net of current portion.
Operating lease ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, The Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company used the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in the office lease. The Company reviewed the underlying objective of each contract, the terms of the contract, and consider the current and future business conditions when making these judgments.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Company evaluates the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the Six months periods ended June 30, 2025 and 2026, the Company did not have any impairment loss against its operating lease right-of-use assets.
19
Bank loan
Bank loan comprises a long-term loan. Bank loan is recognized initially at fair value, net of transaction costs incurred. Bank loan is subsequently stated at amortized cost; any difference between the proceeds net of transaction costs and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.
Revenue recognition
The Company elected to adopt Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), effective as of April 1, 2020. Accordingly, the interim condensed consolidated financial statements for the six months periods ended June 30, 2025 and 2026 are presented under ASC 606. The Company recognizes revenue to depict the transfer of promised goods or services (that is, an asset) to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those goods or services. An asset is transferred when the customer obtains control of that asset. It also requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company elected the modified retrospective method which required a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods. The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements.
Revenue from contracts with customers is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Currently, the Company’s contracts do not include such variable amount. During the year, there is no provision for onerous contracts.
The Company generates its revenues primarily from development of new aquaculture and agriculture farms, upgrading of aquaculture and agriculture farms, sales of industrial supplies and rental of machinery to its customers.
Generally, revenue is recognized when the Company has negotiated the terms of the transaction, which includes determining either the overall price, or the price for each performance obligation in the form of a service or a product, the service or product has been delivered to the customer, no obligation is outstanding regarding that service or product, and the Company is reasonably assured that funds have been or will be collected from the customer.
To achieve that core principle, the Company applies the five steps defined under Topic 606:
| 1. | identify the contract(s) with a customer; | |
| 2. | identify the performance obligations in the contract; | |
| 3. | determine the transaction price; | |
| 4. | allocate the transaction price to the performance obligations in the contract; and | |
| 5. | recognize revenue when (or as) the entity satisfies a performance obligation. |
The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction in accordance with ASC 606-10-55 and depends on whether the promise to the customer is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company control the products prior to transferring it. When the Company controls the products, the promise is to provide and deliver the products and revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is presented net. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in 606-10-55-39. The Company considers this guidance in conjunction with the terms in its arrangements with both suppliers and customers.
20
Revenue is presented in the consolidated statements of comprehensive income. The Company does not offer rights of refund of previously paid or delivered amounts, rebates, warranty, rights of return or price protection. In all instances, the Company limits the amount of revenue recognized to the amounts for which it has the right to bill its’ customers.
The Company currently generates its revenue by the below sources:
(a) Development of new aquaculture and agriculture farms
The Company currently generates revenue from the development of new aquaculture and agriculture farms. The Company is typically contracted through invitation to tender from or corporate negotiation with existing or potential customers in Malaysia. The Company primarily responsible for the fulfilling the promise to provide the designs and develops aquaculture and agriculture farms based on customers’ specific needs and adding value to the inputs by combining them in accordance with an architectural and engineering plan so that they are worth more as a scalable solution versus as individual components. The contract does not provide any post-contract customer warranty, support, or upgrades and there is no retention withheld by customers. The duration of the development period primarily between 6 to 18 months. The Company has discretion in establishing the price for the specified services.
In general, the design and builds of farming are mainly consist of four components:
| ● | Irrigation System |
| ● | Earthwork |
| ● | Water Discharge System |
| ● | Electrical Works |
The design of aquaculture and agriculture farms can have a significant impact on the productivity, efficiency, and sustainability of the farm. Some important factors to consider when designing aquaculture and agriculture farms include site selection, infrastructure design and sustainable practices.
The Company recognizes revenue using the percentage-of-completion method, based primarily on contract costs incurred to date compared to total estimated contract costs. The percentage-of-completion method (an input method) is the most representative depiction of the Company’s performance because it directly measures the value of the services or products transferred to the customer. Subcontractor, building materials, labor and equipment are included in revenue and cost of revenue when management believes that the Company is acting as a principal rather than as an agent (e.g., the Company integrates the materials and labor into the deliverable promised to the customer or is otherwise primarily responsible for fulfillment and acceptability of the materials and labor). The performance obligation to transfer the completed products are not separately identifiable, which is evidencing by the fact that the Company provides a significant service of integrating the goods and services into products for which the customer has contracted. As such, the Company’s contracts typically contain one single performance obligation to complete a defined construction project. The Company currently does not have any modification of contract and the contract currently does not have any variable consideration. The transaction price is clearly identifiable within service contracts. Historically, any contract acquisition costs have been immaterial; in the event that such costs arose, the Company expenses such costs incurred as periodic cost.
Recognition of revenue and cost of revenue for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and measurement of progress toward completion. Management believes it maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. In the event that an estimated losses on uncompleted contracts (there is none for six months periods ended June 30, 2025 and 2026) may occur based on evidence that indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion, a provision for the loss of the full amount will be recognized to the result of operations. Contract costs consist of costs on contracts, including labor, machine rental cost, materials, and amounts payable to subcontractors.
21
The Company’s contracts set forth payment terms that require the customer to make payment within
The Company has no obligations for returns, refunds, or similar obligations of its projects with customers.
For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to development of new aquaculture and agriculture farms provided.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. The Company considers the guidance of control in ASC 340-40, there were no incremental costs incurred for the six-month ended June 30, 2025 and 2026.
(b) Upgrading of aquaculture and agriculture farms
Revenue from upgrading service contracts is generally between
For aquaculture farms (particularly shrimp farms), the focus areas of the works include ensuring proper water levels and quality, aeration and circulation systems and water intake, distribution, and discharge systems of shrimp ponds. For the agriculture farms (particularly pineapple farms), the focus area of the works is soil preparation which involves the improvement of soil structure and aeration. The upgrading services considered to be one single performance obligation since the work procedures are interrelated and affect the functions of each other like the seawater intake system, water distribution system, shrimp ponds, cables, paddle wheels, and water discharge system and work in conjunction are to ensure the farm operates effectively.
The Company recognizes revenue from upgrading of aquaculture and agriculture farms using the percentage-of-completion method, based primarily on contract costs incurred to date compared to total estimated contract costs. The percentage-of-completion method (an input method) is the most representative depiction of the Company’s performance because it directly measures the value of the services or products transferred to the customer. Subcontractor, building materials, labor and equipment are included in revenue and cost of revenue. The performance obligation to transfer the completed products are not separately identifiable, which is evidencing by the fact that the Company provides a significant service of integrating the goods and services into products for which the customer has contracted. As such, the Company’s contracts typically contain one single performance obligation to complete a defined upgrading services. The Company currently does not have any modification of contract and the contract currently does not have any variable consideration. The transaction price is clearly identifiable within service contracts. Historically, any contract acquisition costs have been immaterial; in the event that such costs arose, the Company expenses such costs incurred as periodic cost.
The Company’s contracts set forth payment terms that require the customer to make payment within
The Company has no obligations for returns, refunds, or similar obligations of its projects with customers.
For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to upgrading of new aquaculture and agriculture farms provided.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. The Company considers the guidance of control in ASC 340-40, there were no incremental costs incurred for the or the six-month ended June 30, 2025 and 2026.
22
(c) Sales of industrial supplies
The Company also generates revenue from sales of industrial supplies. The Company typically receives purchase orders from its customers which will set forth the terms and conditions including the transaction price, products to be delivered, terms of delivery, and terms of payment. The terms serve as the basis of the performance obligations that the Company must fulfil in order to recognize revenue. The key performance obligation is the delivery of the industrial supplies to the customer at their specified location at which point control to that asset passes to the customer. The completion of this earning process is evidenced by a written customer acceptance indicating receipt of the product. Typical payment terms set forth in the invoice is
The industrial supplies were delivered directly to customers by the suppliers and relevant shipping and handling costs for the delivery will be charged to cost of revenue once incurred.
The transaction price does not include variable consideration related to returns or refunds as the contracts do not include provisions that allow for sales refunds or returns of products. For the six-month ended June 30, 2025 and 2026, the Company is not aware of any material claims against the Company in relation to the sale of industrial supplies.
The Company is a principal and records revenue on a gross basis as the Company is primarily responsible for fulfilling the goods or services to the customers, is subject to inventory risk, has discretion in establishing pricing and the ability to direct the control of the promised goods before transferring those goods to the customers.
(d) Rental of machinery
Rental of machinery income are mainly leasing of excavators and cranes from third party supplier, whose equipment are ready to use without, or willing to modification. The Company then sublets these excavators and cranes to customers with the desired effect of generating a spread between its leasing cost and rental income to generate profit margins. Under the terms and conditions of the agreements that company enters, the Company acts a principal in the transaction because the Company takes the risk of loss from lack of rental income if itself has leased the machinery as a lessee, but has not procured a lessee to fill the to rent the machineries; accordingly, the Company recognizes rental income using the gross method.
The rental agreements vary with regard to length and payment terms, usually one to six months, subject to the mutual consent of the Company and the lessee. Billing will be raised on monthly basis and payment terms set forth in the invoice is
Additionally, the Company, acting as a lessor, accounts for its leases in accordance to ASC 842. Based on the terms and conditions of the leases set forth in rental agreements. The Company has recognized the leases as operating leases. The lessees have no right to terminate the rental agreements.
Other income
Interest income is mainly generated from time deposits and is recognized on an accrual basis using the effective interest method.
Cost of revenue
Cost of revenue consists primarily of buildings material cost, labor cost, machine rental cost and sub-contracting cost. Sub-contracting fee includes both subcontracting costs and other outside costs associated with performance under contracts with customers. Labor costs represent the portion of salaries and wages incurred in connection with the production of deliverables under contracts with customers.
General and administrative expenses
General and administrative expenses mainly consist of staff cost, depreciation, office supplies and upkeep expenses, travelling and entertainment, legal and professional fees and other miscellaneous administrative expenses.
23
Employee compensation
The full-time employees of the Company’s subsidiary in Malaysia are entitled to the government mandated defined contribution plan, such as social security, employee provident fund, employment insurance, and human resource development fund, as required by labor laws in Malaysia. The Company is required to accrue and pay for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan.
Segment reporting
ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments.
the “more likely than not” test, no tax benefit is recorded. Income tax penalties are accrued related to late in submission of income tax for the six-month ended June 30, 2025 and 2026. The Company had no uncertain tax positions for the six-month ended June 30, 2025 and 2026. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six-month ended June 30, 2025 and 2026, there were no dilutive shares.
All share and per share amounts presented in these unaudited interim condensed consolidated financial statements, including the number of ordinary shares in the unaudited interim condensed consolidated statements of changes in shareholders’ equity and the weighted average number of ordinary shares used in the computation of basic and diluted earnings and loss per share, have been retroactively restated for all periods presented to reflect the 1-for-30 consolidation of the Company’s issued and unissued ordinary shares, which became marketplace effective on The Nasdaq Capital Market on September 17, 2026, in accordance with ASC 260-10-55-12.
Related party
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
The details of related party transactions during the six-months periods ended June 30, 2025 and 2026 and balances as of December 31, 2025 and June 30, 2026 are set out in the Note 13.
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
24
Recently adopted accounting pronouncements
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning April 1, 2023 as the Company is qualified as an emerging growth company. The Company has adopted this standard on April 1, 2023, the adoption did not have a material impact on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company has adopted of this standard on April 1, 2022, the adoption did not have a material impact on its consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. This standard is effective for the Company on April 1, 2023 and the Company does not expect a significant impact to the consolidated financial statements upon adoption. However, the ultimate impact is dependent upon the size and frequency of future acquisitions.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual periods beginning after December 15, 2023. Adoption of ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
25
Note 3 — Accounts receivable, net
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Accounts receivable | ||||||||||||
| Less: allowance for expected credit losses | — | ( | ) | ( | ) | |||||||
| Total accounts receivable, net | ||||||||||||
The movements in the allowance for expected credit losses for the years ended December 31, 2025 and June 30, 2026 were as follows:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Beginning of the financial year/period | — | — | ||||||||||
| Additional/(Reversal) | ( | ) | ||||||||||
| End of the financial year/period | — | |||||||||||
As of June 30, 2026, the entire accounts receivable balance of MYR
Note 4 — Contract assets/contract liabilities
The following table reflects the movements of the net balance of contract assets and contract liabilities.
Movement in contract assets, consists of the following:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Beginning of the financial year/period | — | — | ||||||||||
| Increase resulting from satisfaction of performance obligation | — | — | — | |||||||||
| — | — | |||||||||||
| Less: progress billings/period | ( | ) | — | — | ||||||||
| End of the financial year/period | — | — | — | |||||||||
Movement in contract liabilities, consists of the following:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
MYR (Audited) | MYR | USD | ||||||||||
| Beginning of the financial year/period | ||||||||||||
| Receipt from clients | ||||||||||||
| Revenue recognized during the year/period | ( | ) | ( | ) | ( | ) | ||||||
| End of the financial year/period | ||||||||||||
Changes in contract assets and contract liabilities mainly due to changes in measurement of contracts’ progress.
26
Note 5 — Deposits and other receivables
Deposits and other receivables consist of the following:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Advances to subcontractors | ||||||||||||
| Other deposits | ||||||||||||
| Total | ||||||||||||
Note 6 — Investments in marketable securities
Investments in marketable securities consisted of the investment in less than
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| At fair value: | ||||||||||||
| Beginning of the financial year/period | ||||||||||||
| Additions | ||||||||||||
| Disposals | ( | ) | ( | ) | ( | ) | ||||||
| Fair value (loss)/gain, before investment charges, recognized for the year/period | ||||||||||||
| End of the financial year/period | ||||||||||||
Investments in equity securities, such as marketable securities, are accounted for at fair value with changes in fair value recognized in net income.
Note 7 — Property and equipment, net
Property and equipment, net consist of the following:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| At cost: | ||||||||||||
| Freehold property | ||||||||||||
| Office equipment | ||||||||||||
| Motor vehicle | ||||||||||||
| Renovation | ||||||||||||
| Office furniture and fittings | ||||||||||||
| Total | ||||||||||||
| Accumulated depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Property and equipment, net | ||||||||||||
Depreciation expenses for the six months ended June 30, 2025 and 2026 were MYR
Freehold property is pledged with a bank to secure bank loan (Note 11).
27
Note 8 — Lease
The Company enters into finance lease for its motor vehicle. Finance leases are leases that meet one or more of the criteria under ASC 842 (e.g., transfer of ownership, purchase option reasonably certain to be exercised, lease term covering a major part of the asset’s economic life).
| December 31, 2025 (Audited) | June 30, 2026 (Unaudited) | June 30, 2026 (Unaudited) | ||||||||||
| MYR | MYR | US$ | ||||||||||
| Operating lease liabilities | ||||||||||||
| Current | ||||||||||||
| Non-current | ||||||||||||
The following table shows the remaining contractual maturities of the Group’s operating lease liabilities as of June 30, 2026:
| For the Six Months Ended June 30, 2026 (Unaudited) | ||||||||
| MYR | US$ | |||||||
| 2026 | ||||||||
| Total future lease payments | ||||||||
| Less: imputed interest | ( | ) | ( | ) | ||||
| Present value of lease obligation | ||||||||
Note 9 — Deferred initial public offering costs
As of December 31, 2025 and June 30, 2026, the Company had no deferred initial public offering (“IPO”) costs. The IPO was completed on February 27, 2026 and issuance costs of MYR
Note 10 — Accrued liabilities and other payables
The components of accrued expenses and other payables are as follows:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Accrued payroll and welfare | ||||||||||||
| Accrued expenses* | ||||||||||||
| Other payables** | ||||||||||||
| Payables to purchase of marketable securities*** | ||||||||||||
| Total | ||||||||||||
| * | |
| ** | |
| *** |
28
Note 11 — Bank loan
The carrying amount of bank loan is as follows:
December 31, (Audited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Bank loan | ||||||||||||
| Current portion | ||||||||||||
| Non-current portion | ||||||||||||
| Total bank loan | ||||||||||||
Bank loan | Principal amount | Maturity date | Period | Interest rate | Third party guarantee | Directors’ personal guarantee | December 31, 2025 | June 30, 2026 | June 30, 2026 | |||||||||||||||||||
| MYR | MYR | MYR | MYR | USD | ||||||||||||||||||||||||
| Term loan I | Financing Rate minus 2.00% | Nil | ||||||||||||||||||||||||||
| Total bank loans | ||||||||||||||||||||||||||||
For the year ended December 31, 2025 and period ended June 30, 2026, the effective interest rate of the Company’s bank loan ranged from is
Other than directors’ personal guarantee, the bank loan are secured by freehold property (Note 7) and bank loan assignment over an insurance policy for a director of the Company.
Note 12 — Shareholders’ equity
Ordinary shares
The Company was incorporated under the laws of the Cayman Islands as a limited company on December 7, 2022 and as a holding company. As at the date of its incorporation, the Company allotted and issued
On July 31, 2024, the Company allotted and issued a total of
For the sake of undertaking a public offering of the Company’s ordinary shares, the Company performed a series of re-organizing transactions resulting in
On September 17, 2026 a consolidation of the Company’s issued and unissued ordinary shares on the basis of one ordinary share for every
29
Note 13 — Related party balances and transactions
Nature of relationships with related parties:
| Related parties | Relationship | December 31, 2025 (Audited) | June 30, 2026 (Unaudited) | June 30, 2026 (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||||
| Advance to subcontractor: | ||||||||||||||
| VC Marine Sdn Bhd | — | |||||||||||||
| Amount due to: | ||||||||||||||
| Star Sprite Limited | ||||||||||||||
| Amount due to: | ||||||||||||||
| Darren Hoo Wei Sern | ||||||||||||||
The Company had an unsecured, interest-free, non-trade advance from a related party namely Star Sprite Limited amounting to MYR
The Company had an unsecured, interest-free, non-trade advance from director amounting to MYR
Related party transactions:
| Transaction nature | Name | June 30, 2025 (Unaudited) | June 30, 2026 (Unaudited) | June 30, 2026 (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||||
| Sub-contractor charges | — | — | — | |||||||||||
| Net repayment of sub-contractor charges to | ( | ) | ( | ) | ( | ) | ||||||||
| Expenses paid on behalf of Company | — | — | ||||||||||||
| Expenses paid on behalf of director | — | |||||||||||||
| Net advance from/(repayment) to director | ( | ) | — | — | ||||||||||
Note 14 — Disaggregated revenues
The following table presents the Company’s revenues disaggregated by service lines for the six months periods ended June 30, 2025 and 2026:
June 30, (Unaudited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Over time: | ||||||||||||
| – Development of new aquaculture and agriculture farms | — | — | — | |||||||||
| – Upgrading of aquaculture and agriculture farms | ||||||||||||
| At point in time: | ||||||||||||
| – Sales of industrial supplies | — | |||||||||||
| Total revenue | ||||||||||||
30
Unsatisfied or partially unsatisfied performance obligations
Management expects that the approximate transaction price allocated to unsatisfied or partially unsatisfied performance obligations as at the end of the reporting periods may be recognized as revenue in the next reporting periods as follow:
June 30, (Unaudited) | June 30, (Unaudited) | |||||||
| MYR | MYR | |||||||
| Partial and fully unsatisfied performance obligation as at: | ||||||||
| For the six months period ended June 30, 2025 (Unaudited) | — | |||||||
| For the six months period ended June 30, 2026 (Unaudited) | — | |||||||
| For the six months period ended June 30, 2026 (USD) | — | |||||||
As permitted under ASC Topic 606, the aggregated transaction price allocated to unsatisfied or partially unsatisfied contracts for original expected duration of one year or less, or are billed based on time incurred, is not disclosed. This amount does not include variable consideration which is subject to significant risk of reversal.
Note 15 — Income taxes
Cayman Islands
The Company is incorporated in the Cayman Islands and is not subject to tax on income or capital gains under current Cayman Islands law. In addition, no Cayman Islands withholding tax will be imposed upon payments of dividends by this entity to its shareholders.
Malaysia
Megan Mezanin Sdn Bhd is subject to Malaysia Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Malaysia tax laws. The standard corporate income tax rate in Malaysia is
The operations in Malaysia incurred cumulative net operating losses which can be carried forward for a maximum period of seven consecutive years to offset future taxable income.
The following tables provide the reconciliation of the differences between the statutory and effective tax expenses following for the six months ended 30 June 2026.
June 30, (Unaudited) | June 30, (Unaudited) | June 30, (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Income before income tax | ( | ) | ( | ) | ||||||||
| Tax calculated at the statutory rate of | ( | ) | ( | ) | ||||||||
| Tax effect on non-taxable income | ( | ) | ( | ) | ( | ) | ||||||
| Tax effect on non-deductible expenses | — | |||||||||||
| Underprovision of tax in the prior year | — | |||||||||||
| Income tax expense | ||||||||||||
The income tax provision consists of the following components:
| June 30, 2025 (Unaudited) | June 30, 2026 (Unaudited) | June 30, 2026 (Unaudited) | ||||||||||
| MYR | MYR | USD | ||||||||||
| Current income tax expense: | ||||||||||||
| Current year | — | — | ||||||||||
| Prior year | — | |||||||||||
| Deferred income tax expense | — | |||||||||||
| Income tax expense | ||||||||||||
31
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and June 30, 2026, the Company did not have any significant unrecognized uncertain tax positions. The Company has accrued a provision for income tax penalties of MYR
Note 16 — Segment reporting
The Company operates mainly in
Basis of Segmentation
| ● | Aquaculture and agriculture: Development, construction, and maintenance of aquaculture and agriculture farms and related works. | |
| ● | Industrial solutions: Supply and installation of smart industrial technologies and solutions. | |
| ● | Investment in marketable securities: Pertained to the Group’s investment activities involving the holding, and trading of marketable financial instruments |
Corporate level activities: Corporate-level activities and expenses that are not directly attributable to any reportable operating segment. These primarily include legal and professional fees related to regulatory compliance and IPO activities, as well as certain fines, penalties, and other general corporate costs
Segment Financial Information
The following table summarizes financial results for reportable segments:
| For the six months ended June 30, 2026 | ||||||||||||||||
| Aquaculture and agriculture | Industrial Solutions | Investment in marketable securities | Total | |||||||||||||
| MYR | MYR | MYR | MYR | |||||||||||||
| Revenue | — | — | ||||||||||||||
| Cost of revenue | ( | ) | — | — | ( | ) | ||||||||||
| Gross Profit | — | — | ||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | — | ( | ) | |||||||||
| Interest expenses | ( | ) | — | — | ( | ) | ||||||||||
| Allowance for expected credit losses | ( | ) | — | — | ( | ) | ||||||||||
| Fair value (loss)/gain on marketable securities | — | — | ||||||||||||||
| Other income | — | — | ||||||||||||||
| Operating income/(loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Amount not allocated to segment | ( | ) | ||||||||||||||
| Loss before income tax | ( | ) | ||||||||||||||
| Segment assets | ||||||||||||||||
| Segment liabilities | ||||||||||||||||
32
| For the six months ended June 30, 2025 | ||||||||||||||||
| Aquaculture and agriculture | Industrial Solutions | Investment in marketable securities | Total | |||||||||||||
| MYR | MYR | MYR | MYR | |||||||||||||
| Revenue | — | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | — | ( | ) | |||||||||
| Gross Profit | — | |||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | — | ( | ) | |||||||||
| Interest expenses | ( | ) | — | — | ( | ) | ||||||||||
| Reversal of allowance for expected credit losses | — | — | ||||||||||||||
| Fair value (loss)/gain on marketable securities | — | — | ( | ) | ( | ) | ||||||||||
| Income from operations | — | |||||||||||||||
| Operating income/(loss) | ( | ) | ( | ) | ||||||||||||
| Segment assets | ||||||||||||||||
| Segment liabilities | ( | ) | ( | ) | ||||||||||||
Note 17 — Commitments and contingencies
Operating lease commitments
For the details on future minimum lease payments under the non-cancelable operating leases as of June 30, 2026, please refer to a section headed “operating lease right-of-use assets and operating lease liabilities” set forth in the Note 8 to the Consolidated Financial Statements.
Capital commitments
As of December 31, 2025 and June 30, 2026, the Company did not have any capital commitments.
Legal proceedings
From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of December 31, 2025, and through the issuance date of these consolidated financial statements.
Note 18 — Subsequent events
The Company evaluated all events and transactions that occurred after June 30, 2026, up through September 24, 2026, the date that these consolidated financial statements are available to be issued, other than as disclosed below, there were no material subsequent events that require disclosure in these consolidated financial statements.
Share consolidation
At an Extraordinary General Meeting of shareholders held on August 21, 2026, the shareholders of the Company approved a consolidation of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares, each of par value US$
On August 11, 2026, the Company clarified that, although its proxy statement had referred to August 21, 2026 as the anticipated effective date, the marketplace effective date of the Share Consolidation on The Nasdaq Capital Market had not been finalised and would be determined in coordination with The Nasdaq Stock Market LLC, The Depository Trust Company and the Company’s transfer agent. On August 25, 2026, the Company announced that the marketplace effective date would be September 8, 2026.
The Company subsequently announced that its board of directors had approved a revised consolidation ratio of
The share consolidation has been applied retroactively to all periods presented in these unaudited interim condensed consolidated financial statements, as required by ASC 260-10-55-12. The weighted average number of ordinary shares used in the computation of basic and diluted earnings and loss per share for the six months periods ended June 30, 2025 and 2026 has been restated from
33