Phaos Technology Holdings (POAS) logs loss and warns on going concern despite revenue growth
Rhea-AI Filing Summary
Phaos Technology Holdings (Cayman) Limited reports unaudited results for the six months ended October 31, 2025, showing a small revenue base with improving margins but ongoing losses and liquidity pressure.
Revenue rose to S$87,617 (US$67,334), up 38.8% year over year, driven mainly by higher microscope and parts sales, which contributed 92.5% of revenue. Gross margin improved to 41.8% from 12.7%, reflecting a better product mix and more efficient production.
Net loss narrowed to S$1.51 million (US$1.16 million) from S$2.02 million, helped by lower employee costs, elimination of R&D spending and a S$102,283 reversal of credit-loss allowance on a loan. However, the company still had a shareholders’ deficit of S$3.47 million and relied heavily on interest-free loans from a major shareholder totaling S$3.76 million.
Cash and cash equivalents were only S$54,989 (US$42,259), with negative operating cash flow of S$1.29 million over the period. Management concludes these conditions raise substantial doubt about the company’s ability to continue as a going concern and highlights the need for successful capital raising and continued shareholder support.
Subsequent to period-end, the company completed a firm-commitment IPO of 2,700,000 Class A ordinary shares at US$4.00 per share (plus 900,090 secondary shares and a 405,000-share over-allotment) and adopted a 2026 equity incentive plan covering up to 2,741,350 Class A ordinary shares.
Positive
- None.
Negative
- Going concern uncertainty and heavy reliance on shareholder loans: As of October 31, 2025, the company had only S$54,989 of cash, negative operating cash flow of S$1,291,946 and a shareholders’ deficit of S$3,472,234, with S$3,755,423 owed to a major shareholder and explicit disclosure of substantial doubt about its ability to continue as a going concern.
Insights
Small revenue base, improved margins, but severe balance sheet stress and going-concern risk.
Phaos Technology Holdings generated modest revenue of S$87,617 for the six months ended October 31, 2025, up 38.8% year over year. Gross margin expanded to 41.8%, supported by higher microscope sales and more efficient production, while the net loss narrowed to S$1.51 million.
Despite this operational improvement, the balance sheet is highly stressed. Cash was only S$54,989 against negative operating cash flow of S$1.29 million and a shareholders’ deficit of S$3.47 million. Liabilities totaled S$4.75 million, including S$3.76 million owed to a major shareholder on an interest‑free, on‑demand basis.
Management explicitly states that these conditions raise substantial doubt about the company’s ability to continue as a going concern. Subsequent events include a primary IPO of 2,700,000 Class A shares at US$4.00 per share and a 405,000‑share over‑allotment, plus a 2026 equity incentive plan for up to 2,741,350 shares. Future filings will need to show how IPO proceeds affect liquidity, leverage and dependence on shareholder loans.
Key Figures
Key Terms
going concern financial
deferred offering costs financial
right-of-use assets financial
customer concentration financial
emerging growth company regulatory
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 April 2026
Commission
file number:
(Exact name of Registrant as Specified in its Charter)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
(Address of Principal Executive Offices)
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 ☐
EXPLANATORY NOTE
Phaos Technology Holdings (Cayman) Limited (the “Company”) is filing this report on Form 6-K to furnish its unaudited condensed consolidated interim financial statements for the six months ended October 31, 2025.
Attached as exhibits to this report on Form 6-K are:
| (1) | the unaudited condensed consolidated interim financial statements and related notes as Exhibit 99.1 | |
| (2) | management’s discussion and analysis of financial condition and results of operations as Exhibit 99.2 |
| 1 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this report of foreign private issuer with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to: substantial doubt about the Company’s ability to continue as a going concern; the Company’s history of operating losses and accumulated deficit; the Company’s limited operating history and early stage of development; the Company’s reliance on a limited number of customers and suppliers; geographic concentration of the Company’s revenue in Singapore; the Company’s ability to successfully execute its capital raising strategy; the Company’s reliance on key management personnel and major shareholder funding; product and service demand and acceptance; changes in technology; economic conditions; the impact of competition and pricing; government regulation; and other risks described in the Company’s registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.
All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
| 2 |
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Unaudited condensed consolidated financial statements and related notes | |
| 99.2 | Management’s discussion and analysis of financial condition and results of operations |
| 3 |
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: April 30, 2026 | /s/ Gan Hong Loon |
| Gan
Hong Loon Interim Chief Executive Officer |
| 4 |
Exhibit 99.1
PHAOS TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Page | |
| Unaudited Condensed Consolidated Balance Sheets as of April 30 and October 31, 2025 | F-2 |
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended October 31, 2024 and 2025 | F-3 |
| Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Deficit for the Six Months ended October 31, 2024 and 2025 | F-4 |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended October 31, 2024 and 2025 | F-5 |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-6 – F-18 |
| F-1 |
PHAOS TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of | ||||||||||||
| April 30, 2025 Audited | October 31, 2025 Unaudited | October 31, 2025 Unaudited | ||||||||||
| S$ | S$ | US$ | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Other current assets | ||||||||||||
| Loan to third parties | ||||||||||||
| Deferred offering costs | ||||||||||||
| Inventories | ||||||||||||
| Total current assets | ||||||||||||
| Non-current assets | ||||||||||||
| Property and equipment, net | ||||||||||||
| Right-of-use assets | ||||||||||||
| Total non-current assets | ||||||||||||
| TOTAL ASSETS | ||||||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | ||||||||||||
| Accruals and other payables | ||||||||||||
| Amount due to major shareholders | ||||||||||||
| Bank loans, current | ||||||||||||
| Operating lease liabilities, current | ||||||||||||
| Total current liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Bank loans, non-current | ||||||||||||
| Operating lease liabilities, non-current | ||||||||||||
| Total non-current liabilities | ||||||||||||
| TOTAL LIABILITIES | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ DEFICIT | ||||||||||||
| Ordinary shares, Class A, USD par value and share authorized and shares issued and outstanding at April 30 and October 31, 2025 | ||||||||||||
| Ordinary shares, Class B, USD par value and shares authorized and shares issued and outstanding at April 30 and October 31, 2025 | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Subscription receivable | ( | ) | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total shareholders’ deficit | ( | ) | ( | ) | ( | ) | ||||||
| TOTAL LIABILITIES AND EQUITY | ||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-2 |
PHAOS TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Six Months Ended October 31, | ||||||||||||
| 2024 Unaudited | 2025 Unaudited | 2025 Unaudited | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Reclassification* | ||||||||||||
| Revenue | ||||||||||||
| Cost of Goods sold (excluding depreciation shown separately below) | ( | ) | ( | ) | ( | ) | ||||||
| Employee benefits expenses | ( | ) | ( | ) | ( | ) | ||||||
| Depreciation expenses | ( | ) | ( | ) | ( | ) | ||||||
| Operating lease expense | ( | ) | ( | ) | ( | ) | ||||||
| Research and Development Expenses | ( | ) | ||||||||||
| Other operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| Reversal of allowance for expected credit loss of loan receivable | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Non-operating income : | ||||||||||||
| Other income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||
| Total non-operating income, net | ||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expense | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Weighted average number of outstanding ordinary shares | ||||||||||||
| Basic and diluted | ||||||||||||
| Net loss per share attributable to ordinary shareholders | ||||||||||||
| Basic and diluted | ) | ) | ) | |||||||||
| * |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
PHAOS TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
| Ordinary shares | ||||||||||||||||||||||||||||
| Shares Outstanding | Par value | Additional paid-in capital | Issued shares, Amount outstanding | Accumulated Other Comprehensive Loss | Accumulated deficit | Total shareholders’ deficit | ||||||||||||||||||||||
| S$ | S$ | S$ | S$ | S$ | S$ | |||||||||||||||||||||||
| Balance as of May 1, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Translation Reserve | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of October 31, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||
| Balance as of October 31, 2025 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Ordinary shares | ||||||||||||||||||||||||||||
| Shares Outstanding | Par value | Additional paid-in capital | Issued shares, Amount outstanding | Shares subscribed, not issued | Accumulated deficit | Total shareholders’ equity | ||||||||||||||||||||||
| S$ | S$ | S$ | S$ | S$ | S$ | |||||||||||||||||||||||
| Balance as of May 1, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Receipt of subscription monies | - | |||||||||||||||||||||||||||
| Balance as of October 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||
| Balance as of October 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
PHAOS
TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended October 31, | ||||||||||||
| 2024 Unaudited | 2025 Unaudited | 2025 Unaudited | ||||||||||
| S$ | S$ | US$ | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Reversal of allowance for expected credit loss of loan receivable | ( | ) | ( | ) | ||||||||
| Depreciation | ||||||||||||
| Operating lease expenses | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||
| Account receivables | ( | ) | ( | ) | ||||||||
| Other current assets | ( | ) | ||||||||||
| Inventories | ( | ) | ( | ) | ||||||||
| Account payables | ( | ) | ( | ) | ( | ) | ||||||
| Accruals and other payables | ( | ) | ||||||||||
| Operating lease obligations | ( | ) | ( | ) | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchase of equipment | ( | ) | ( | ) | ( | ) | ||||||
| Loan to third party | ( | ) | ||||||||||
| Receipt from Loan to third party | ||||||||||||
| Net cash (used in)/provided by investing activities | ( | ) | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Repayment of bank loans | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from subscription | ||||||||||||
| Loan proceeds from major shareholder | ||||||||||||
| Repayment to major shareholder | ( | ) | ||||||||||
| Deferred offering cost | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||||||
| Translation loss | ( | ) | ( | ) | ||||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ( | ) | ||||||
| Cash and cash equivalents - beginning of year | ||||||||||||
| Cash and cash equivalents - end of year | ||||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
| Cash paid for interest | ||||||||||||
| Cash paid for tax | ||||||||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION | ||||||||||||
| New shares issued with consideration receivable | ||||||||||||
The accompanying notes form an integral part of these unaudited consolidated financial statements.
| F-5 |
PHAOS
TECHNOLOGY HOLDINGS (CAYMAN) LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1 Organization and business overview
Phaos Technology Holdings (Cayman) Limited or the Company is an investment holding company incorporated on March 7, 2024 under the laws of the Cayman Islands. The Company, through its subsidiaries provides research and development, as well as the manufacturing and commercialization of advanced optical related technologies and products. Using its patented microsphere technology, the Company can significantly increase the magnification of existing traditional optical microscope by up to 4 times compared to its competitors, thereby allowing the Company’s client to see beyond the optical limit of 200nm in a cost effective manner. Currently, it is the only commercially available advanced optical microscope that can see below the 200nm optical limit with a commercially viable working distance.
In addition to selling optical and microscopy equipment, the Company develops software solution that is complimentary to the hardware equipment in order to provide partners and clients with a fully integrated hardware and software microscopy solution. The software is augmented by algorithms around Artificial Intelligence to allow for use cases in pathology and metrology, whereby partners and clients can use the software to further analyze what they see through the hardware equipment.
The Company and its subsidiaries are collectively referred to as the “Company”. The Company is headquartered in Singapore.
On November 29, 2024, the Company proceeded with an internal reorganization whereby Phaos Technology Private Limited (PTPL)became our indirect wholly-owned subsidiary through a share swap. Subject to completion of the restructuring, both the ordinary and preferential shares of PTPL were swapped on a 1:125 basis to Phaos Technology Holdings (BVI) Limited. Subsequently, the shares of Phaos Technology Holdings (BVI) Limited were swapped 1:1 to Phaos Technology (Cayman) Limited, where the holders of the ordinary shares of PTPL eventually being swapped to Class A Ordinary Shares, and the holders of preferential shares of PTPL being swapped to Class B Ordinary Shares.
The Reorganization has been accounted for as a recapitalization among entities under common control since the same controlling shareholders controlled all these entities before and after the Reorganization. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. Results of operations for the periods presented comprise those of the previously separate entities combined from the beginning of the period to the end of the period eliminating the effects of intra-entity transactions.
The consolidated financial statements of the Company include the following entities:
| Name | Date of incorporation |
Percentage of direct or indirect interests |
Place of incorporation | Principal activities | ||||
| Phaos Technology Holdings (Cayman) Limited | ||||||||
| Phaos Technology Holdings (BVI) Limited | ||||||||
| Phaos Technology Pte. Ltd. | ||||||||
| Phaos Solutions Vietnam Co., Ltd |
| F-6 |
2 Summary of significant accounting policies
Basis of presentation
This summary of significant accounting policies is presented to assist in understanding the Company’s unaudited condensed consolidated financial statements and have been consistently applied in the preparation of the financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the Company’s unaudited condensed consolidated financial statements.
Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries. All inter-company balances, investment and capital, if any, have been eliminated upon consolidation.
Use of estimates
The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. 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 unaudited condensed consolidated financial statements include, but are not limited to the useful lives and impairment of long-lived assets, and collectability of accounts receivable and other current assets. Actual results may differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use.
Accounts receivable, net
Accounts receivable mainly represent amounts due from customers that meet the revenue recognition criteria. These accounts receivables are recorded net of any allowance for credit losses and specific customer credit allowances. The Company maintains an allowance for estimated credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the Company’s customers’ financial condition, the receivable amount in dispute, and the current receivables aging and current payment patterns, over the contractual life of the receivable. The Company writes off the receivable when it is determined to be uncollectible.
Other current assets
Other current assets primarily consists of deposits, prepayments made to vendors or services providers for future services that have not been provided, and other receivables from third parties. These advances are reviewed periodically to determine whether their carrying value has become impaired. As of October 31, 2025, management believes that the Company’s other current assets are not impaired. As of October 31, 2025, loan to third parties has been fully impaired.
Inventories
Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the first-in, first-out principle. Due to the minimal amount of inventory, the Company does not operate a batch program that aggregates the number of units of similar inventory.
The cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. General and administrative costs are not charged to inventory as they are not considered direct costs towards production.
The Company does not mortgage, pledge or subject any inventory to lien. Inventories by the Company is not collateralized in any form.
Deferred offering costs
Pursuant
to ASC 340-10-S99-1, offering costs directly attributable to an offering of equity securities are deferred and would be charged against
the gross proceeds of the offering as a reduction of additional paid-in capital. These costs include legal fees related to the registration
drafting and counsel, consulting fees related to the registration preparation, the SEC filing and print related costs. As of October
31, 2025, the Company had not concluded its IPO hence professional fees are recorded as deferred offering costs. As of October 31, 2025,
the accumulated deferred offering cost was S$
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. The Company computes depreciation using the straight-line method over the estimated useful lives of the assets as follows:
| Property and equipment | lesser of lease term or expected useful life | |
| Computers and software | ||
| Furniture and fittings | ||
| Office and production equipment | ||
| Renovation |
| F-7 |
| 2 | Summary of significant accounting policies (cont’d) |
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 statement of income. Expenditures for maintenance and repairs are charged to expense as incurred, while additions renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Impairment of long-lived assets
The
Company evaluates the recoverability of its long-lived assets (asset groups), including property and equipment and operating lease right-of-use
assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not
be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the
estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and their eventual disposition. If
the sum of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Company recognizes an
impairment loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally
determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily
available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful
life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets and liabilities. For the six months period ended October 31, 2024 and 2025,
Fair value measurements
ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in pricing the asset or liability. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
| Level 1 | - | observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| Level 2 | - | other inputs that are directly or indirectly observable in the marketplace. | |
| Level 3 | - | unobservable inputs which are supported by little or no market activity. |
The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, inventories and liabilities, accounts payable, and accruals and other payables approximate their fair values because of their generally short maturities.
Revenue recognition
The Company follows the revenue requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expect to be entitled in such exchange. This will require 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.
To achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
Revenues are generally recognized upon the transfer of control via acceptance of promised products provided to our customers, reflecting the amount of consideration we expect to receive for those products or services.
| F-8 |
| 2 | Summary of significant accounting policies (cont’d) |
The Company generates revenue from the following streams:
Sales of microscopes and parts
The Company sells microscopes and parts. Revenue is recognized when the goods are delivered to the customer and all criteria for acceptance have been satisfied. The goods are often sold with a right of return when goods are defective. Up till October 31, 2025, there has been no returns from customers.
The amount of revenue recognized is based on the transaction price, which comprises the contractual price. Based on the Company’s experience with similar types of contracts, variable consideration is typically constrained and is included in the transaction only to the extent that it is a highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred where the amortization period of the asset that would otherwise be recognized is one year or less.
Services
The Company provides services. Revenue is recognized as the services are rendered and the customer simultaneously receives and consumes the benefits of the services.
Services are generally provided with acceptance criteria, and revenue is recognized when such criteria are satisfied. In certain cases, the Company may be required to perform rework if services do not meet agreed specifications; however, as of October 31, 2025, no significant service rework or adjustments have been required.
The amount of revenue recognized is based on the transaction price, which comprises the contractual consideration. Based on the Company’s experience with similar types of contracts, variable consideration is typically constrained and is included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred where the amortization period of the asset that would otherwise be recognized is one year or less.
Contract Assets and contract liabilities
The contract assets primarily relate to the Company’s rights to bill for work completed but not billed at the reporting date. The contract assets are transferred to receivables until the subsequent billing phase. The contract liabilities primarily relate to advance billing to customers based on the contract, for which project task has not yet been completed.
Segments
ASC
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
clients in financial statements for detailing the Company’s business segments. Based on the criteria established by ASC 280, the
Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated
results when making decisions about allocating resources and assessing performance of the Company. As a whole and hence, the Company
has only
Concentrations and credit risk
The
Company maintains cash with banks in Singapore (“SGN”). Should any bank holding cash become insolvent, or if the Company
is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses
in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Singapore, a depositor has
up to S$
Financial instruments that potentially expose the Company to the concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company has designed their credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on its clients and generally does not require collateral or other security. The Company periodically evaluates the creditworthiness of the existing clients in determining the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.
As of October 31, 2024 and 2025, the Company’s assets were located in Singapore and the Company’s revenue was derived from the operation in Singapore.
For
the six months period ended October 31, 2024 and 2025, top 5 customers accounted for
For
the six months period ended October 31, 2024, customer A, customer B, customer C and customer D accounted for
For
the six months period ended October 31, 2024, vendor A, vendor B and vendor C accounted for
Government grants
Government grants are recognized when there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. Government grant is recognized as ‘Other income’ in Unaudited Condensed Consolidated statement of operations and comprehensive loss.
| F-9 |
| 2 | Summary of significant accounting policies (cont’d) |
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.
Employee benefits
Employee benefits are recognized as an expense, unless the cost qualifies to be capitalized as an asset.
| i) | Defined contribution plans |
Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. Contributions to defined contribution pension schemes are recognized as an expense in the period in which the related service is performed.
| ii) | Short-term compensated absences |
Employee entitlements to annual leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.
The Company follows ASC 850 Related Party Disclosures for the identification of related parties and disclosure of related party transactions.
Foreign currency and foreign currency translation
The accompanying consolidated financial statements are presented in Singapore Dollars (“S$”), which is the reporting currency of the Company. The functional currency of the Company and its subsidiary in the British Virgin Island is United States Dollar (“US$”), and the functional currency of its subsidiaries in Singapore and Vietnam is Singapore dollar (“S$”) and Vietnamese Dong (“VND”) respectively.
Convenience translation
Translations
of the consolidated balance sheet, consolidated statement of operations and comprehensive loss, statement of shareholders deficit and
consolidated statement of cash flows from S$ into US$ as of and for the year ended October 31, 2025 are solely for the convenience of
the reader and were calculated at the rate of US$
Income taxes
The Company accounts for income taxes under FASB ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also provided for net operating loss carry forward that can be utilized to offset future taxable income.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
The provisions of FASB ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.
The
Company did
| F-10 |
| 2 | Summary of significant accounting policies (cont’d) |
Leases
The Company is a lessee of non-cancellable operating leases for its corporate office premises. The Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date. The Company generally uses the base, non-cancellable lease term in calculating the right-of-use assets and liabilities.
The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term leases as an expense 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
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
ended October 31, 2024 and 2025, the Company did
The Company’s operating lease liabilities and right-of-use assets are disclosed in Note 8.
Basic
earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number
of ordinary shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if outstanding
stock options, warrants and convertible debt were exercised or converted into ordinary shares. When the Company incurs a loss, diluted
shares are not included, as their inclusion would have an anti-dilutive effect. The Company did
Going Concern
As
of the six months period ending October 31, 2025, the Group had a net loss of S$
To sustain our ability to support our ongoing activities, we considered supplementing our sources of funding through the following:
| - | Cash flow from operations through sale of our products | |
| - | Net negative cash burn from operation has reduced
to less than S$ | |
| - | Continuous support from major shareholders, such as Tonghuai SG Enterprise Pte. Ltd. which has provided the shareholders loan |
Management has commenced a strategy to raise debt and equity. However, there can be no certainty that these additional financings will be available on acceptable terms or at all. If management is unable to execute this plan, there will likely be a material adverse effect on the Company’s business. All these factors raise substantial doubt about the ability of the Company to continue as a going concern.
There is no immediate liquidation concern for the Company; however, there is substantial doubt on the Company being a going concern but the management has positive mitigation plan to handle going concern issue.
The unaudited consolidated financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern.
Recent Accounting Pronouncements
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company made the election to delay the adoption of new or revised accounting standards.
In May 2025, the FASB issued the amendments in Accounting Standards Update No. 2019-08, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer, require that a grantor apply the guidance in Topic 718, Compensation—Stock Compensation, to measure and classify share-based consideration payable to a customer (the “Topic 718 approach”). The Company generates revenue from the sale of products and services. The FASB has issued guidance clarifying the accounting for share-based consideration payable to customers, which affects the application of revenue recognition guidance. The Company has evaluated the impact of this guidance on its unaudited condensed consolidated financial statements and does not expect a material impact, as it does not have arrangements involving equity-based payments to customers.
In July 2025, the FASB has issued an update to address challenges encountered when applying the guidance in Topic 326, Financial Instruments—Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. This update provides practical expedients for estimating expected credit losses on financial assets measured at amortized cost, including trade receivables and contract assets. The Company’s exposure to credit risk arises primarily from trade receivables generated from both product sales and service arrangements. The Company has evaluated the impact of this guidance on its unaudited condensed consolidated financial statements and does not expect a material impact on its unaudited condensed consolidated financial statements.
Except as mentioned above, the Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of operations and cash flows.
| F-11 |
3 Account receivable, net
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Accounts receivable | ||||||||||||
| Less: allowance for credit losses | ||||||||||||
| Total accounts receivable | ||||||||||||
4 Other current assets
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Deposit | ||||||||||||
| Prepayment | ||||||||||||
| Other current assets | ||||||||||||
5 Loan to third party
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
S$ Audited | S$ Unaudited | US$ Unaudited | ||||||||||
| Loan to third party | ||||||||||||
| Allowance for impairment of loan | ( | ) | ( | ) | ( | ) | ||||||
On
19th January 2024, the Company provided a loan to PT Neura Integrasi Solusi, a technology company providing pathology related
software solutions. The loan bears an interest at a rate of
| F-12 |
6 Property and equipment, net
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Production equipment | ||||||||||||
| Computer and software | ||||||||||||
| Furniture and Fittings | ||||||||||||
| Office Equipment | ||||||||||||
| Renovation | ||||||||||||
| Construction in Progress | ||||||||||||
| Total | ||||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Net book value | ||||||||||||
Depreciation
expense for the six months periods ended October 31, 2024 and 2025 was S$
7 Inventories
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Parts | ||||||||||||
| Partial finished goods | ||||||||||||
| Finished goods | ||||||||||||
8 Leases
The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which results in an economic penalty.
The Company has four office premises operating lease agreements with lease terms ranging from two to three years, respectively. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption of ASU 2016-02, no right-of-use (“ROU”) assets nor lease liability was recorded for the lease with a lease term of one year.
| F-13 |
| 8 | Leases (cont’d) |
As of October 31, 2025, the Company had the following non-cancellable operating lease contracts:
| Description of lease | Lease term | |
| Office premises |
| (a) | Amount recognized in the consolidated balance sheets: |
| As of | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Right-of-use assets | ||||||||||||
| Operating lease liabilities | ||||||||||||
| Current | ||||||||||||
| Non-current | ||||||||||||
| (b) | A summary of lease cost recognized in the Group’s consolidated statements of operations is as follows: |
| For Six months Periods Ended October 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Unaudited | Unaudited | Unaudited | ||||||||||
| Operating lease expense | ||||||||||||
Lease Commitment
Future minimum lease payments under non-cancellable operating lease agreements as of April 30, 2025 and October 31, 2025 were as follows:
| Minimum lease payment | ||||||||
S$ Audited | US$ Audited | |||||||
| Years ending April 30, | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Total future minimum lease payments | ||||||||
| Less imputed interest | ( | ) | ( | ) | ||||
| Present value of operating lease liabilities | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long-term portion | ||||||||
| Minimum lease payment | ||||||||
S$ Unaudited | US$ Unaudited | |||||||
| Twelve months ending October 31, | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Total future minimum lease payments | ||||||||
| Less imputed interest | ( | ) | ( | ) | ||||
| Present value of operating lease liabilities | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long-term portion | ||||||||
The following summarizes other supplemental information about the Company’s lease as of April 30, 2025 and October 31, 2025:
| As of, | ||||||||
| April 30, 2025 | October 31, 2025 | |||||||
| Audited | Unaudited | |||||||
| Weighted average discount rate | % | % | ||||||
| Weighted average remaining lease term | ||||||||
| F-14 |
9 Bank loans
On
August 11, 2022, the Company has acquired a
On
November 4, 2022, the Company has acquired another
Interest
expenses for the six months periods ended October 31, 2024 and 2025 are S$
The maturities schedule is as follows:
| Amount | Amount | |||||||
| S$ | US$ | |||||||
| Unaudited | Unaudited | |||||||
| Year ending October 31, | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Total | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long-term portion | ||||||||
10 Accruals and other current liabilities
| As of, | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Accruals | ||||||||||||
| Provision for reinstatement | ||||||||||||
| Other payables | ||||||||||||
| Non-trade creditors | ||||||||||||
| Total | ||||||||||||
11 Equity
Ordinary shares
The
Company was incorporated under the laws of the Cayman Islands on March 7, 2024. The original authorized share capital of the Company
was US$
The Company issued Ordinary Class A and Class B Shares as of April 30, 2025 and as of October 31, 2025.
| F-15 |
12 Related party transactions and balances
The table below sets forth the major related parties and their relationships with the Company as of April 30, 2025 and October 31, 2025:
| Name of related parties | Relationship with the Company | |
| Tonghuai SG Enterprise Pte. Ltd. | ||
| Singlight Technology Holdings Pte. Ltd. |
Amount due to major shareholder
The
Company received loan proceeds from major shareholder, Tonghuai SG Enterprise Pte. Ltd. for business working purposes. The payable
balance due to Tonghuai SG Enterprise Pte. Ltd. was S$
Tonghuai SG Enterprise Pte. Ltd will continue to provide cash injections to the Company based on agreement as and when signed.
Related Party Transactions
During the six months period ended October 31, 2024 and 2025, other than the loan from major shareholder, no other transaction occurred.
13 Income taxes
Caymans and BVIs
The Company and its subsidiaries are domiciled in the Cayman Island and British Virgin Islands. The locality currently enjoys permanent income tax holidays; accordingly, the Company does not accrue for income taxes.
Singapore
Phaos
Technology Pte. Ltd. is incorporated in Singapore and are subject to Singapore Corporate Tax on the taxable income as reported in its
statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable tax rate is
Vietnam
Phaos
Solutions Vietnam Company Limited is incorporated in Vietnam and are subject to Vietnam Corporate Tax on the taxable income as reported
in its statutory financial statements adjusted in accordance with relevant Vietnam tax laws. The applicable tax rate is
A reconciliation between of the statutory tax rate to the effective tax rate are as follows:
| For Six Months Periods Ended October 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Unaudited | Unaudited | Unaudited | ||||||||||
| Loss before tax | ( | ) | ( | ) | ( | ) | ||||||
| Singapore income tax rate | ( | )% | ( | )% | ( | )% | ||||||
| Reconciling items: | ||||||||||||
| Non-deductible expenses | % | % | % | |||||||||
| Deferred tax assets on temporary differences not recognized | % | % | % | |||||||||
| Effective tax rate | ||||||||||||
| F-16 |
| 13 | Income taxes (cont’d) |
Deferred tax
Significant components of deferred tax were as follows:
| As of, | ||||||||||||
| April 30, 2025 | October 31, 2025 | October 31, 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| Net operating loss carried forward | ||||||||||||
| Deferred tax assets, gross | ||||||||||||
| Valuation allowance | ( | ) | ( | ) | ( | ) | ||||||
| Deferred tax assets, net of valuation allowance | ||||||||||||
Deferred tax assets are recognized in the consolidated financial statements only to the extent that it is probable that future taxable income will be available against which the Company can utilize the benefits. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislations of the respective countries in which the group companies operate.
The
deferred tax assets not recognized as of April 30, 2025 and October 31, 2025 was S$
14 Other operating expenses
| For Six Months Periods Ended October 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Unaudited | Unaudited | Unaudited | ||||||||||
| Marketing expenses | ||||||||||||
| Professional fees | ||||||||||||
| Travelling expenses | ||||||||||||
| Other expenses | ||||||||||||
| Total | ||||||||||||
| F-17 |
15 Other income
| For Six Months Periods Ended October 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Unaudited | Unaudited | Unaudited | ||||||||||
| Interest income | ||||||||||||
| Government grants | ||||||||||||
| Other | ||||||||||||
| Total | ||||||||||||
Basic loss per share is the amount of losses available to each ordinary share outstanding during the reporting period. Diluted loss per share is the amount of losses available to each ordinary share outstanding during the six months period ended October 31, 2024 and 2025.
| For Six Months Periods Ended October 31, | ||||||||||||
| 2024 | 2025 | 2025 | ||||||||||
| S$ | S$ | US$ | ||||||||||
| Unaudited | Unaudited | Unaudited | ||||||||||
| Numerator: | ||||||||||||
| Net loss available to common stockholders | ( | ) | ( | ) | ( | ) | ||||||
| Denominator: | ||||||||||||
| Weighted average Class A and Class B shares outstanding – basic and diluted | ||||||||||||
| Loss per common share: | ||||||||||||
| Basic and diluted | ) | ) | ) | |||||||||
17 Commitment and Contingencies
For the details on future minimum lease payment under the non-cancellable operating leases as of October 31, 2025, please refer to Note 8 set forth in the Notes to the Consolidated Financial Statements.
As of April 30, 2025 and October 31, 2025, the Company did not have any capital commitments and contingencies.
18 Reclassification
Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations, cash flow and performance position. A reclassification has been made to the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the six months ended October 31, 2024, to reclassify the labor costs in costs of goods sold to employee benefits expenses and other operating expenses.
19 Subsequent events
The Company has assessed all subsequent events through the date that the unaudited condensed consolidated financial statements were issued and other than the following, there are no further material subsequent events that require disclosure in these unaudited condensed consolidated financial statements.
On November 12, 2025, the Company entered into an underwriting agreement by and among certain selling shareholders of the Company (the “Selling Shareholders”), and Network 1 Financial Securities Inc., as representative (the “Representative”) of the underwriters named therein (the “Underwriting Agreement”), pursuant to which the Company agreed to sell to the Underwriter in a firm commitment initial public offering (the “IPO”) an aggregate of class A ordinary shares, par value $ per share (the “Class A Ordinary Shares”) of the Company (the “IPO Shares”), at a public offering price of $ per share (the “Offering Price”). Of the IPO Shares, Class A Ordinary Shares were offered by the Company and Class A Ordinary Shares were offered by the Selling Shareholders. The Company did not receive any proceeds from the sale of the Class A Ordinary Shares sold by the Selling Shareholders. Pursuant to the Underwriting Agreement, in exchange for the Representative’s firm commitment to purchase the Shares, the Company and the Selling Shareholders agreed to sell the IPO Shares to the Representative at a purchase price of $ (92.5% of the Offering Price). The Company also granted the Representative a 45-day over-allotment option to purchase up to an additional Class A Ordinary Shares at the Offering Price, representing fifteen percent (15%) of the IPO Shares sold by the Company in the IPO, less underwriting discounts and a non-accountable expense allowance.
On November 24, 2025, Network 1 Financial Securities Inc., as the representative of the underwriters (the “Representative”) of the initial public offering of the Company, exercised its over-allotment option (the “Option”) in full to purchase an additional class A ordinary shares, par value $ per share (the “Option Shares”) of the Company, representing fifteen percent (15%) of the class A ordinary shares sold by the Company in the Company’s initial public offering (the “IPO”) at the public offering price of $ per share (the “Offering Price”), before deducting underwriting discounts.
On
March 30, 2026, the Company adopted the Phaos Technology Holdings (Cayman) Limited 2026 equity incentive plan (the “2026 Equity
Incentive Plan”) to motivate, attract and retain directors, consultants or key employees to exert their best efforts on behalf
of the Company and link their personal interests to those of the Company’s shareholders. The 2026 Plan has a maximum number of
| F-18 |
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis here and throughout this report contains forward-looking statements that involve risks, uncertainties, and assumptions.
Overview
Phaos Technology Holdings (Cayman) Limited (the “Company”) is an investment holding company incorporated on March 7, 2024 under the laws of the Cayman Islands. The Company through its subsidiary assembling and commercialization of such advanced microscopy-related solutions, technologies and products. Using its patented microsphere-assisted technology, the Company can significantly increase the magnification of existing traditional optical microscope by up to 4 times compared to its competitors, hence allowing clients to see beyond the optical limit in an effective manner. Currently, it is the only commercially available advanced optical microscope that can see below the 200nm optical limit, within a commercially viable working distance.
Our business is primarily involved on the assembling and commercialization of advanced microscopy-related solutions, technologies and products tailored for precision measurement and magnification purposes. Our product range includes microscopy solutions, featuring:
| i) | Super-resolution imagers capable of achieving imaging down to 137 nm; | |
| ii) | Specialized microscopes designed to meet the diverse needs of various industries; and | |
| iii) | Three-dimensional (3-D) real-time image magnifiers for enhanced visualization. |
Traditional optical microscopes are able to see up to 220 nm, while our solution allows users to see up to 137 nm. As a result, we believe that this is considered by the optical industry as a super resolution optical microscopy solution.
In addition to our hardware offerings, we currently provide complimentary proprietary software, which is developed in-house. This software includes Artificial Intelligent (“AI”) components that allows our customers to perform recognition patterns for research, quality assurance and control (“QA/QC”), as well as diagnostics purposes. The in-house software is meticulously crafted to complement our product line ensuring seamless integration and optimized its performance for our customers.
For the six-month periods ended October 31, 2024 and 2025, the provision of microscopy products contributed to 80.9% and 92.5% of our revenue, respectively.
We distribute our microscopy products with software solutions through an extensive network of distributors, primarily in Singapore and expanding across regions such as Southeast Asia and South Asia. Our microscopy solutions accommodate a diverse range of applications enabling us to serve a wide range of customer needs and capitalize on emerging growth opportunities in the region. Our diverse customer base primarily includes industries with usage in fields such as manufacturing, research & development, biomedical, semiconductors, Printed Circuit Board (“PCB”), electronics, precision engineering, injection molding, research, healthcare, quality assurance and control (“QA/QC”), and diagnostics. Our business strategic focus involves strengthening our market position in Singapore and progressively expanding into the Southeast Asian region.
We believe in our strong corporate culture which emphasizes the creation of shareholder value. In the six-month period ended October 31, 2025, business in Singapore contributed to 83.3% of our Group’s revenue. For the six-month period ended October 31, 2024, our revenue was S$63,129. For the six-month period ended October 31, 2025, our revenue was S$87,617. This is an increase of 38.8% in revenue. Our net loss and accumulated deficit was S$2,019,092 and S$9,049,158 respectively for October 31, 2024, while our net loss and accumulated deficit was S$1,505,248 (US$1,156,784) and S$13,672,378 (US$10,507,222) for October 31, 2025. This signifies a decrease of 25.4% and an increase of 51.1% for net loss and accumulated deficit.
Known Trends and Uncertainties
The following trends and uncertainties are reasonably likely to have a material impact on our results of operations, financial condition, and liquidity:
Going Concern and Liquidity Risk. As discussed elsewhere in this report, there is substantial doubt about our ability to continue as a going concern. As of October 31, 2025, we had a cash balance of only S$54,989 (approximately US$42,259) and incurred negative cash flow from operations of S$1,291,946 (approximately US$992,859) during the six-month period then ended. Our ability to continue as a going concern is dependent upon management’s ability to successfully execute on its capital raising strategy, continued support from major shareholders, and our ability to increase revenues and reduce operating expenses. There can be no assurance that these measures will be successful or that we will be able to obtain additional financing on acceptable terms, or at all. This uncertainty is reasonably likely to continue to have a material adverse effect on our financial condition, results of operations, and ability to pursue our business strategy.
Customer Concentration. For the six-month period ended October 31, 2025, our top five customers accounted for 85.0% of our total revenue, with our largest customer accounting for 26.2% of total revenue. The loss of any one of these significant customers, or a substantial reduction in their purchases, could have a material adverse effect on our revenue and results of operations. We are actively seeking to diversify our customer base, but there can be no assurance that we will be successful in these efforts or that customer concentration will decrease.
| 1 |
Geographic Concentration. For the six-month period ended October 31, 2025, approximately 83.3% of our revenue was derived from customers in Singapore. This geographic concentration exposes us to risks related to the Singapore economy, including changes in demand, currency fluctuations, and regulatory changes specific to that market. While we are pursuing expansion into Southeast Asia and South Asia, there can be no assurance that we will be successful in these efforts.
Workforce Reduction. As of October 31, 2025, our workforce consisted of 10 full-time employees, a reduction from 25 employees as of April 30, 2025. While this restructuring has contributed to a reduction in our monthly operating cash burn to less than S$200,000 per month, there can be no assurance that we will be able to maintain this reduced cost structure while pursuing our growth objectives, or that the reduction in workforce will not adversely impact our ability to execute on our business strategy, maintain product quality, or serve our customers.
Key Factors Affecting the Results of Our Group’s Operations
Our operating results are primarily affected by those factors set out in the below sections:
Supply chain interruptions
Supply chain interruptions pose significant challenges to businesses, impacting operations, production, and ultimately, the ability to meet customer demand. We conduct a comprehensive analysis of the supply chain to identify potential vulnerabilities and points of failure. This includes assessing dependencies on critical suppliers, geographical risks, transportation logistics, and regulatory compliance issues. The Group will strengthen relationships with key suppliers through open communication, collaboration, and regular performance evaluations. We develop robust contingency plans to address potential supply chain disruptions, including natural disasters, geopolitical events, trade disputes, and pandemics. These plans include clear protocols and procedures for activating contingency measures swiftly and effectively when disruptions occur. By proactively addressing supply chain interruptions and implementing risk management strategies, businesses can enhance our resilience and mitigate the impact of disruptions on operations and customer satisfaction.
Fluctuations in material prices and quantities
Fluctuations in material prices and quantities can significantly affect the cost of assembling microscopy products. To mitigate these impacts, we implement effective inventory management practices, optimizing levels based on demand forecasts and lead times. Maintaining adequate buffer stocks helps offset sudden price increases or supply shortages. Additionally, we continuously assess cost reduction strategies such as process optimization and exploring alternative materials or components with similar performance at lower costs. These measures not only reduce overall production costs but also enhance our resilience to price fluctuations. By implementing these strategies, we can better manage our susceptibility to market volatility, strengthening our competitiveness and ensuring sustained performance in the market.
Pricing and profitability
Setting the right pricing strategy for our microscopy products is crucial for generating revenue and achieving profitability. We provide the software as a complimentary product to our microscopy products. Other factors such as market demand, tight competition, product differentiation, and perceived value all influence our pricing decisions. Balancing affordability with profitability is essential to attract customers while maximizing our returns. Similarly, choosing the right distribution channels for selling microscopy equipment can impact sales volume, reach, and profitability. While we previously marketed through direct channels such as our in-house sales team and organic growth through inbound calls, mail and social media., we now market through indirect channels, such as distributors, and while it provides broader market coverage, we are currently uncertain as to whether it may or may not result in lower margins due to many other external macro-factors in play such as competitors, innovation within the optical industry as well as the general economic environment.
Compliance with health, and safety regulations
Compliance with health and safety regulations is paramount to our business operations, as non-compliance can lead to penalties and reputational damage. We closely monitor existing regulations and proactively adapt our practices to ensure compliance. Additionally, we stay vigilant regarding new and evolving laws and regulations that may impact our operations. To mitigate the risks associated with regulatory changes, we maintain robust internal controls and processes focused on compliance with health and safety regulations. This includes conducting regular audits, implementing training programs for employees, and engaging with regulatory authorities to stay informed about emerging requirements. By prioritizing compliance with health and safety regulations and staying abreast of regulatory developments, we aim to safeguard our business against potential penalties and reputational harm while fostering a safe and sustainable operating environment.
Inflation
Inflation can drive the prices of raw materials and components used in our microscopy products upwards. This increase in material costs can be attributed to various factors, including supply chain disruptions, and fluctuations in commodities prices. Energy prices, particularly crude oil prices, can impact transportation and production costs as well. Overall, we may face higher procurement costs for essential components and materials as well as elevated expenses for transportation, energy and labor. To mitigate the effects of inflation on material costs and profit margins, we will continuously assess cost reduction strategies, including exploring alternative sources of materials.
Critical Accounting Policies
The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below. Refer to “Note 2 — Summary of significant accounting policies” to the unaudited condensed consolidated financial statements included for more detailed information regarding our critical accounting policies.
Revenue recognition
The Company follows the revenue requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require 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.
| 2 |
To achieve that core principle, the Company applies the five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
Revenues are generally recognized upon the transfer of control of promised products or services provided to our customers, reflecting the amount of consideration we expect to receive for those products or services.
We currently generate our revenues from the following main sources:
Sales of microscopes and parts
The Company sells microscopes and parts. Revenue is recognized when the goods are delivered to the customer and all criteria for acceptance have been satisfied. The goods are often sold with the right of return.
The amount of revenue recognized is based on the transaction price, which comprises the contractual price. Based on the Company’s experience with similar types of contracts, variable consideration is typically constrained and is included in the transaction only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
At the end of each reporting date, the Company updates its assessment of the estimated transaction price, including its assessment of whether an estimate of variable consideration is constrained. The corresponding amounts are adjusted against revenue in the period in which the transaction price changes. The Company also updates its measurement of the asset for the right to recover returned goods for changes in its expectations about returned goods.
The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred where the amortization period of the asset that would otherwise be recognized is one year or less.
Income taxes
The Company accounts for income taxes under FASB ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also provided for net operating loss carryforwards that can be utilized to offset future taxable income.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.
The provisions of FASB ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for unaudited condensed consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.
The Company did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes for the year ended April 30, 2025, and six-month period ended October 31, 2025. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
Critical accounting estimates
The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. These principles require us to make certain estimates and judgments that affect the amounts reported in our unaudited condensed consolidated financial statements.
The useful life and impairment of long-lived assets
The judgment of long-lived assets, which include property and equipment, are being amortized over their useful lives and are not impaired are significant accounting estimates. We have estimated the useful life and residual value and concluded that no impairment loss was recognized as of October 31, 2024 and 2025. As of October 31, 2025, the carrying value of our property and equipment was S$208,047 (approximately US$159,884). If actual useful lives are lower than our estimates by 1 year(s), it would result in an annual depreciation expense adjustment of approximately S$87,208. Management believes its estimates are reasonable based on current operating conditions; however, changes in our business strategy, technological obsolescence, or other factors could result in material adjustments to these estimates.
Collectability of account receivables
We maintain an allowance for estimated credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the Company’s customers’ financial condition, the receivable amount in dispute, and the current receivables aging and current payment patterns, over the contractual life of the receivable. The Company writes off the receivable when it is determined to be uncollectible. As of October 31, 2025, our gross accounts receivable was S$47,623 (approximately US$36,598) and there was no credit losses. Given our concentration in a limited number of customers, and they are mainly government bodies, therefore the possibility of a deterioration in the financial condition of any significant customer is minimal.
Collectability of note receivables
We keep a close observation on the collection of note receivables to maintain an allowance for estimated credit losses inherent in the note receivables portfolio. To establish the required allowance, management considers historical losses, taking into account current market conditions and the borrower’s financial conditions to calculate the loss given default and probability of default for estimates on credit losses. The company writes off the receivable when it is deemed to be uncollectable. As of October 31, 2025, we had fully impaired our loan to PT Neura Integrasi Solusi, our Indonesian partner, in the amount of S$1,223,608. During the six-month period ended October 31, 2025, we received repayments of S$502,283, resulting in a reversal of impairment of S$102,283 recorded as reversal of allowance for expected credit loss of loan receivable. The ultimate collectability of the remaining balance and any further recoveries is uncertain and dependent on the financial condition of the borrower.
Recent Accounting Pronouncements
A discussion of recent accounting pronouncements is included in “Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements”.
| 3 |
Results of Operations
Comparison of Six-Month Periods Ended October 31, 2025 and 2024
The following table summarizes the consolidated results of our operations for the six-month periods ended October 31, 2025 and 2024, respectively:
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Revenue | 87,617 | 67,334 | 63,129 | 48,515 | 24,488 | 18,819 | 38.8 | % | ||||||||||||||||||||
| Costs of Goods sold (excluding depreciation shown separately below) | (50,966 | ) | (39,168 | ) | (55,138 | ) | (42,374 | ) | 4,172 | 3,206 | (7.6 | )% | ||||||||||||||||
| Employee benefits expense | (740,357 | ) | (568,963 | ) | (1,218,034 | ) | (936,059 | ) | 477,677 | 367,096 | (39.2 | )% | ||||||||||||||||
| Research and Development expenses | - | - | (149,493 | ) | (114,885 | ) | 149,493 | 114,885 | (100.0 | )% | ||||||||||||||||||
| Depreciation expenses | (89,026 | ) | (68,417 | ) | (95,602 | ) | (73,470 | ) | 6,576 | 5,053 | (6.9 | )% | ||||||||||||||||
| Operating lease expenses | (82,720 | ) | (63,571 | ) | (70,281 | ) | (54,011 | ) | (12,439 | ) | (9,560 | ) | 17.7 | % | ||||||||||||||
| Other operating expenses | (771,045 | ) | (592,549 | ) | (546,188 | ) | (419,745 | ) | (224,857 | ) | (172,804 | ) | 41.2 | % | ||||||||||||||
| Reversal of allowance for expected credit loss of loan receivable | 102,283 | 78,605 | - | - | 102,283 | 78,605 | 0.0 | % | ||||||||||||||||||||
| Loss from operations | (1,544,214 | ) | (1,186,729 | ) | (2,071,607 | ) | (1,592,029 | ) | 527,393 | 405,300 | (25.5 | )% | ||||||||||||||||
| Non-operating income: | ||||||||||||||||||||||||||||
| Other income | 41,885 | 32,189 | 57,431 | 44,136 | (15,546 | ) | (11,947 | ) | (27.1 | )% | ||||||||||||||||||
| Interest expense | (2,919 | ) | (2,244 | ) | (4,916 | ) | (3,778 | ) | 1,997 | 1,534 | (40.6 | )% | ||||||||||||||||
| Total non-operating income, net | 38,966 | 29,945 | 52,515 | 40,358 | (13,549 | ) | (10,413 | ) | (25.8 | )% | ||||||||||||||||||
| Loss before income tax expense | (1,505,248 | ) | (1,156,784 | ) | (2,019,092 | ) | (1,551,671 | ) | 513,844 | 394,887 | (25.4 | )% | ||||||||||||||||
| Income tax expense | - | - | - | - | - | - | 0.0 | % | ||||||||||||||||||||
| Net loss | (1,505,248 | ) | (1,156,784 | ) | (2,019,092 | ) | (1,551,671 | ) | 513,844 | 394,887 | (25.4 | )% | ||||||||||||||||
| Total comprehensive income (loss) | (1,505,248 | ) | (1,156,784 | ) | (2,019,092 | ) | (1,551,671 | ) | 513,844 | 394,887 | (25.4 | )% | ||||||||||||||||
| Basic and diluted earnings (loss) per share to ordinary shareholders | (0.06 | ) | (0.04 | ) | (0.08 | ) | (0.06 | ) | 0.02 | 0.02 | (25.0) | % | ||||||||||||||||
| 4 |
Revenue
We provide maintenance services through sales of microscopes and parts. The following table provides financial information for each of these operating groups:
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||
| Sales of microscopes and parts | 81,021 | 62,265 | 51,054 | 39,235 | 29,967 | 23,030 | 58.7 | % | ||||||||||||||||||||
| Services | 6,596 | 5069 | 12,075 | 9280 | (5,479 | ) | (4,211 | ) | (45.4 | )% | ||||||||||||||||||
| Total | 87,617 | 67,334 | 63,129 | 48,515 | 24,488 | 18,819 | 38.8 | % | ||||||||||||||||||||
| Revenue as a percentage of total: | ||||||||||||||||||||||||||||
| Sales of microscopes and parts | 92.5 | % | 92.5 | % | 80.9 | % | 80.9 | % | ||||||||||||||||||||
| Services | 7.5 | % | 7.5 | % | 19.1 | % | 19.1 | % | ||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||
The principal activities of the Company for the six-month periods ended October 31, 2025 and 2024 were the sale of microscopy solutions, products and accessories. Our revenue for the six-month periods ended October 31, 2025 and 2024 was S$87,617 (approximately US$67,334) and S$63,129 (approximately US$48,515) respectively, representing an increase of S$24,488 or 38.8%. This increase in revenue was primarily attributable to an increase in sales volume resulting from diversification of our customer base in the region rather than changes in unit pricing, which remained largely unchanged during the period. Gross profit for the six-month period ended October 31, 2025 was S$36,651 (approximately US$28,166), representing a gross margin of 41.8%, compared to gross profit of S$7,991 (approximately US$6,142) and gross margin of 12.7% for the six-month period ended October 31, 2024. The improvement in gross margin was primarily due to improved product mix and more efficient utilization of production resources. In addition, we had zero product returns for the six-month periods ended October 31, 2025 and 2024.
Other Income
The following table provides financial information for the different types of Other Income:
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Interest income | 1 | 1 | 5,832 | 4,482 | (5,831 | ) | (4,481 | ) | (100.0 | )% | ||||||||||||||||||
| Government Grants | 20,968 | 16,114 | 30,889 | 23,738 | (9,921 | ) | (7,624 | ) | (32.1 | )% | ||||||||||||||||||
| Other | 20,916 | 16,074 | 20,710 | 15,916 | 206 | 158 | 1.0 | % | ||||||||||||||||||||
| 41,885 | 32,189 | 57,431 | 44,136 | (15,546 | ) | (11,947 | ) | (27.1 | )% | |||||||||||||||||||
| 5 |
Our other income showed a decrease of S$15,546 (approximately US$11,947) or 27.1% from S$57,431 (approximately US$44,136) for the six-month period ended October 31, 2024 to S$41,885 (approximately US$32,189) for the six-month period ended October 31, 2025, This was primarily attributable to a decrease in government grant for the six-month period ended October 31, 2025.
Cost of Goods Sold
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Tools and hardware and Production Labor | 46,514 | 35,747 | 50,889 | 39,108 | (4,375 | ) | (3,361 | ) | (8.6 | )% | ||||||||||||||||||
| Inward freight | 4,452 | 3,421 | 4,249 | 3,265 | 203 | 156 | 4.8 | % | ||||||||||||||||||||
| Total | 50,966 | 39,168 | 55,138 | 42,373 | (4,172 | ) | (3,205 | ) | (7.6 | )% | ||||||||||||||||||
Our cost of goods sold comprises mainly tools and hardware, production labor and inward freight. Our total cost of goods sold increased by S$4,172 (approximately US$3,205) or by 7.6% from S$55,138 (approximately US$42,373) for the six-month period ended October 31, 2024, to S$50,966 (approximately US$39,168) for the six-month period ended October 31, 2025. This was primarily attributable to increase in sales for the six-month period ended October 31, 2025.
Payroll
As of April 30, 2025 we have 25 employees but as of October 31, 2025, the workforce consists of 10 full time employees. We enter into employment contracts with our full-time employees, which are not covered by collective bargaining agreements. The remuneration to our employees includes fixed salaries, performance-based bonuses, allowances and sales commissions for employees. We determine employees’ remuneration based on a number of factors including years of experience, qualifications and market rates.
Operating lease expenses
As of six-month period ended October 31, 2024, the Company has three office premise lease agreements with lease terms ranging from two to three years, and has paid a sum of S$70,281 for the six-month period ended October 31, 2024. As of six-month period ended October 31, 2025, the Company has four office premise lease agreements with lease terms ranging from two to three years, and has paid a sum of S$82,720 for the six-month period ended October 31, 2025. The company has a non-cancellable lease for an office premise located at The Curie Singapore Science Park Unit #04-01B, Singapore 118258 with a lease term extending over 3 years, which signify a longer commitment to this office space. As of April 30, 2025, the company entered to a lease agreement for office premises at Shophouse SH01-01, Binh Minh Garden Project, Duc Giang Ward, Long Bien District, Hanoi City, Vietnam with a lease term of 2 years.
| 6 |
Other Operating Expenses
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Advertising fee and marketing cost | 3,689 | 2,835 | 2,569 | 1,974 | 1,120 | 861 | 43.6 | % | ||||||||||||||||||||
| Consultancy fee | 133,974 | 102,959 | 28,000 | 21,518 | 105,974 | 81,441 | 378.5 | % | ||||||||||||||||||||
| Professional and legal fees | 76,063 | 58,454 | 24,751 | 19,021 | 51,312 | 39,433 | 207.3 | % | ||||||||||||||||||||
| Travelling expenses | 26,582 | 20,428 | 80,690 | 62,010 | (54,108 | ) | (41,582 | ) | (67.1 | )% | ||||||||||||||||||
| Staff training | 1,085 | 834 | 531 | 408 | 554 | 426 | 104.3 | % | ||||||||||||||||||||
| Other expenses | 529,652 | 407,039 | 409,647 | 314,814 | 120,005 | 92,225 | 29.3 | % | ||||||||||||||||||||
| Total | 771,045 | 592,549 | 546,188 | 419,745 | 224,857 | 172,804 | 41.2 | % | ||||||||||||||||||||
For the six-month periods ended October 31, 2024 and 2025, other operating expenses consist primarily of advertising fee and marketing cost, consultancy fee, professional and legal fees, travelling expenses, staff training and other expenses. Other expenses include accounting fees, bank service charges, entertainment and staff welfare, exchange gain or loss, repairs and maintenance, management fee and others. Operating expenses increased by S$224,857 (approximately US$172,804), or 41.2% from S$546,188 (approximately US$419,745) for the six-month period ended October 31, 2024 to S$771,045 (approximately US$592,549) for the six-month period ended October 31, 2025. The increase was primarily attributable to: (i) consultancy fees of approximately S$105,974 related to pre-IPO advisory services; and (ii) audit fees of approximately S$202,282 associated with the increased reporting requirements as a public company offset against a reduction of IPO expenses of approximately S$95,416 which is expected to be non-recurring as the Company’s initial public offering will be completed in November 2025. Management expects that certain of these IPO-related costs will not recur in future periods, although the Company will continue to incur ongoing public company compliance costs.
Finance expenses
Our finance expenses decreased by S$1,997 (approximately US$1,537) from S$4,916 (approximately US$3,778) for the six-month period ended October 31, 2024 to S$2,919 (approximately US$2,244) for the six-month period ended October 31, 2025. Such decrease was primarily due to interest expenses from loans as one of the loans was repaid in the year ended April 30, 2025.
Research and development expenses
The following table sets forth a breakdown of our research and development expenses for the periods indicated:
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Research and Development Expenses | - | - | 149,493 | 114,885 | (149,493 | ) | (114,885 | ) | (100.0 | )% | ||||||||||||||||||
| Total Research and Development expenses | - | - | 149,493 | 114,885 | (149,493 | ) | (114,885 | ) | (100.0 | )% | ||||||||||||||||||
Research and development expenses primarily consisted of testing and retrieval of relevant test reports. Research and development expenses decreased by 100.0%, from S$149,943 (US$114,885) for the six-month period ended October 31, 2024 to non-incurrence for the six-month period ended October 31, 2025. Non incurrence for the six-month period ended October 31, 2025 as the Company is focusing on sales as shown in the increase in sales from the six-month period ended October 31, 2024 S$63,129 to six-month period ended October 31, 2025 of S$87,617 (US$67,334).
| 7 |
Impairment of loan receivable
For the six-month period ended October 31, 2025, there was a write-back on impairment of loan to third party by S$102,283 (approximately US$78,605).
Liquidity and Capital Resources
Our primary source of liquidity has been cash generated from our business operations, proceeds from equity and debt financing, and loans from our major shareholder, Tonghuai SG Enterprise Pte. Ltd. Historically, these sources have been sufficient to meet our working capital and capital expenditure requirements. However, as discussed below, there is substantial doubt about our ability to continue as a going concern.
As of the six-month period ending October 31, 2025, the Group had a net loss of S$1,505,248 (approximately US$1,156,784) and incurred a negative cashflow from operations of S$1,291,947 (approximately US$992,860), against a cash balance of S$54,989 (approximately US$42,259). This raises substantial doubt about our ability as a going concern.
To sustain our ability to support our ongoing activities, we considered supplementing our sources of funding through the following:
| - | Cash flow from operations through sale of our products | |
| - | Net negative cash burn from operation has reduced to less than S $0.2m per month after the restructuring exercise from June 2025 onwards | |
| - | Continuous support from major shareholders, such as Tonghuai SG Enterprise Pte. Ltd. which has provided for the shareholders’ loan |
Management has commenced a strategy to raise debt and equity. However, there can be no certainty that these additional financings will be available on acceptable terms or at all. If management is unable to execute this plan, there will likely be a material adverse effect on the Company’s business. All these factors raise substantial doubt about the ability of the Company to continue as a going concern.
Short-Term Liquidity (Next 12 Months)
Based on our current monthly cash burn rate of less than S$200,000 per month following our June 2025 restructuring, we estimate that we will require approximately S$500,000 to S$1 million in additional funding to satisfy our cash requirements for the next 12 months. Our primary uses of cash during this period are expected to include: (i) operating expenses, including employee compensation, rent, and professional services; (ii) sales and marketing initiatives to expand our customer base; and (iii) repayment of our bank loan obligations, which mature in August 2027. As of October 31, 2025, we had S$106,508 (US$81,852) outstanding for our temporary bridging loan, which bears interest at 4.75% per annum.
Long-Term Liquidity (Beyond 12 Months)
Our long-term liquidity needs will depend on numerous factors, including: (i) our ability to achieve profitability and generate positive cash flows from operations; (ii) the rate at which we expand our operations and customer base in Singapore and the Southeast Asian region; (iii) our capital expenditure requirements for equipment and technology; and (iv) our ability to access debt or equity financing on acceptable terms. We currently do not have any committed sources of long-term financing and will need to raise additional capital to support our growth strategy and repay our outstanding indebtedness. There can be no assurance that such financing will be available on favorable terms, or at all.
There is no immediate liquidation concern for the Company; however, there is substantial doubt on the Company being a going concern but the management has positive mitigation plan to handle going concern issue.
Capital Raising Strategy
To address our liquidity needs and the substantial doubt about our ability to continue as a going concern, we are pursuing a capital raising strategy that may include: (i) additional equity financing, including potential follow-on public offerings or private placements; (ii) debt financing, including bank loans or convertible instruments; and (iii) continued support from our major shareholder, Tonghuai SG Enterprise Pte. Ltd., which has provided loans totaling S$3,755,423 (approximately US$2,886,043) as of October 31, 2025. These loans from Tonghuai SG Enterprise Pte. Ltd. are interest-free, unsecured, and due on demand. There is no written agreement or commitment obligating Tonghuai SG Enterprise Pte. Ltd. to provide additional funding, although the shareholder has historically supported the Company’s operations and has indicated its intention to continue doing so. Management is actively evaluating financing alternatives; however, as of the date of this report, no definitive financing agreements have been entered into and there can be no assurance that any such financing will be obtained.
Impact of November 2025 IPO
On November 12, 2025, we completed our initial public offering of 2,700,000 Class A ordinary shares at a public offering price of $4.00 per share, and on November 24, 2025, the underwriters exercised their over-allotment option in full to purchase an additional 405,000 Class A ordinary shares. After deducting underwriting discounts and commissions of 7.5% ($0.30 per share) and estimated offering expenses of approximately $1,669,808, we received net proceeds of approximately US$9,400,220. These proceeds are being used for working capital and general corporate purposes, including expansion through acquisitions. While the IPO proceeds provide additional liquidity, the Company continues to evaluate its ongoing funding requirements and may need to raise additional capital to support its operations and growth strategy.
| 8 |
The unaudited consolidated financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern.
| For six-month periods ended October 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Liquidity and capital resources: | ||||||||||||||||||||||||||||
| Cash and cash equivalents at the beginning of the year | 129,552 | 99,561 | 2,312,107 | 1,776,854 | (2,182,555 | ) | (1,677,293 | ) | (94.4 | )% | ||||||||||||||||||
| Net cash used in operating activities | (1,291,946 | ) | (992,859 | ) | (1,928,901 | ) | (1,482,360 | ) | 636,955 | 489,501 | (33.0 | )% | ||||||||||||||||
| Net cash used in investing activities | 491,709 | 377,878 | (285,803 | ) | (219,640 | ) | 777,512 | 597,518 | (272.0 | )% | ||||||||||||||||||
| Net cash generated from financing activities | 729,793 | 560,845 | 134,252 | 103,173 | 595,541 | 457,672 | 443.6 | % | ||||||||||||||||||||
| Translation loss | (4,119 | ) | (3,166 | ) | - | - | (4,119 | ) | (3,166 | ) | 0.0 | % | ||||||||||||||||
| Net increase/(decrease) in cash and cash equivalents | (74,563 | ) | (57,302 | ) | (2,080,452 | ) | (1,598,827 | ) | 2,005,889 | 1,541,525 | (96.4 | )% | ||||||||||||||||
| Cash and cash equivalents as at the end of the year | 54,989 | 42,259 | 231,655 | 178,027 | (176,666 | ) | (135,768 | ) | (76.3 | )% | ||||||||||||||||||
On August 11, 2022, the Company has acquired a 5-year S$270,000 temporary bridging loan which expires in August 2027. The bank loan which carries interest of 4.75% per annum is secured by joint and several guarantee by Andrew Yeo Eng Sian (former Chief Executive Officer) and Beh Hook Seng (Executive Chairman). As of October 31, 2025, the carrying amount of the bank loan was S$106,508 (US$81,852).
On November 4, 2022, the Company has acquired another 5-year S$500,000 secured fixed rate bank loan which expires in November 2027. The bank loan which carries interest of 7.75% per annum is secured by joint and several guarantee by Beh Hook Seng, Andrew Yeo Eng Sian, Wong Teck Far and Chua Jun Hao, David. As of October 31, 2024, the bank loan has been fully paid.
Cash Flows used in Operating Activities
For the six-month period ended October 31, 2025, net cash flow used in operating activities was S$1,291,946 (approximately US$992,859) compared to cash flow used in operations of S$1,928,901 (approximately US$1,482,360) during the six-month period ended October 31, 2024. The decrease in cash flow used in operations was primarily the result of lower net loss and increase in other payables.
For the six-month period ended October 31, 2024, net loss of S$2,019,092 (approximately US$1,551,672) adjusted for non-cash items which included depreciation S$95,602 (approximately US$73,470). This was offset against net cash outflow arising from the net change in operating assets and liabilities of S$75,692 (approximately US$58,169).
Cash Flows used in Investing Activities
Net cash from investing activities was S$491,709 (approximately US$377,878) for the six-month period ended October 31, 2025, as compared to net cash used of S$285,803 (approximately US$219,640) for the six-month period ended October 31, 2024.
Net cash from investing activities for the six-month period ended October 31, 2025 consisted of repayment of loan to third-party, purchase of production equipment, computer and software, furniture and fittings, office equipment and renovation in the amount of S$491,709 (approximately US$377,878). On January 19, 2024, Phaos Technology Pte. Ltd. (the “Lender”) entered into a loan agreement with PT Neura Integrasi Solusi (the “Borrower”) for the purposes of further business activities in Indonesia and working capital, this loan has been fully impaired as at October 31, 2025.
Net cash used in investing activities for the six-month period ended October 31, 2024 consisted of a loan to third-party, purchase of production equipment, computer and software, furniture and fittings, office equipment and renovation in the amount of S$285,803 (approximately US$219,640).
Cash Flows from Financing Activities
Net cash generated from financing activities was S$729,793 (approximately US$560,845) for the six-month period ended October 31, 2025, as compared to S$134,252 (approximately US$103,173) for the six-month period ended October 31, 2024.
Net cash generated from financing activities for the six-month period ended October 31, 2025 consisted of net proceeds from related party, Tonghuai SG Enterprise Pte. Ltd ., of S$760,000 (approximately US$584,060), and offset by repayments of borrowings of S$27,471 (approximately US$21,113) and deferred offering costs of S$2,736 (approximately US$2,103).
Net cash generated from financing activities for the six-month period ended October 31, 2024 consisted of proceeds from subscription monies in the amount of S$255,195 (approximately US$196,117), net proceeds from related party, Tonghuai SG Enterprise Pte. Ltd., of S$412,670 (approximately US$317,137), and offset by repayments of borrowings of S$413,612 (approximately US$317,861) and deferred offering costs of S$120,001 (approximately US$92,221).
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Working Capital
As of the six-month period ending October 31, 2025, the Group’s incurred a negative cashflow from operations of S$1,291,946 (approximately US$992,859), against a cash balance of S$54,989 (approximately US$42,259).
For the year ended April 30, 2025, the Group’s incurred a negative cashflow from operations of S$3,653,376 (approximately US$2,807,619), against a cash balance of S$129,552 (approximately US$99,561).
Discussion of Certain Balance Sheet Items
The following table set forth selected information from our consolidated balance sheets as of October 31, 2025 and April 30, 2025. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus.
Account payables
| As of, | ||||||||||||||||||||||||||||||||
| October 31, 2025 | April 30, 2025 | Variance | ||||||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||||||
| Account payables | 58,010 | 4 | 4,581 | 93,931 | 72,186 | (35,921 | ) | (27,605 | ) | (38.2 | )% | |||||||||||||||||||||
Account payables decreased by S$35,921 (approximately US$27,605) from S$93,931 (approximately US$72,186) to S$58,010 (approximately US$44,581) as of April 30, 2025, to October 31, 2025, respectively. The turnover days is 544 days as of October 31, 2025 and 542 days as of April 30, 2025. This decrease reflects our ongoing efforts to manage our payables efficiently as we grow and expand our operations. We remain focused on managing our accounts payable efficiently to support our financial stability and growth objectives in the future.
Account receivables
| As of, | ||||||||||||||||||||||||||||
| October 31, 2025 | April 30, 2025 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Account receivables, before allowance for doubtful accounts | 47,623 | 36,598 | 38,384 | 29,498 | 9,239 | 7,100 | 24.1 | % | ||||||||||||||||||||
| Accounts Receivables | 30,120 | 23,147 | 38,275 | 29,414 | (8,155 | ) | (6,267 | ) | (21.3 | )% | ||||||||||||||||||
| (1 - 90 days) | ||||||||||||||||||||||||||||
| Accounts Receivables | - | - | - | - | - | - | - | |||||||||||||||||||||
| (91 - 180 days) | ||||||||||||||||||||||||||||
| Accounts Receivables | 17,503 | 13,451 | 109 | 84 | 17,394 | 13,367 | 15957.8 | % | ||||||||||||||||||||
| Over 180 days | ||||||||||||||||||||||||||||
Typically, we provide up to 30 days credit terms for our customers.
Account receivables, net of allowance for doubtful accounts increased by S$9,239 (approximately US$7,100) from S$38,384 (approximately US$29,498) to S$47,623 (approximately US$36,598) as of April 30, 2025, to October 31, 2025, respectively. The turnover days is 179 days and 491 days as of October 31, 2025 and April 30, 2025, respectively. An increase in accounts receivable and turnover days is as a result of customer base where a higher proportion of sales is to government bodies where the payment period is longer. Subsequent to October 31, 2025 the Company collected US$23,147, representing 63.2% of the outstanding balance. As of December 31, 2025 US$13,656 remained outstanding.
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Lease Liabilities
| As of, | ||||||||||||||||||||||||||||
| October 31, 2025 | April 30, 2025 | Variance | ||||||||||||||||||||||||||
| SGD | USD | SGD | USD | SGD | USD | % Change | ||||||||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||||||||
| Lease liabilities – current | 40,368 | 31,022 | 109,142 | 83,876 | (68,774 | ) | (52,854 | ) | (63.0 | )% | ||||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||||||||||
| Lease liabilities – non-current | 10,257 | 7,883 | 22,703 | 17,447 | (12,446 | ) | (9,564 | ) | (54.8 | )% | ||||||||||||||||||
| Total lease liabilities | 50,625 | 38,905 | 131,845 | 101,323 | (81,220 | ) | (62,418 | ) | (61.6 | )% | ||||||||||||||||||
Total lease liabilities comprise current lease liabilities and non-current lease liabilities.
The total borrowings of the Group decreased by S$81,220 (approximately US$62,418) from S$131,845 (approximately US$101,323) to S$50,625 (approximately US$38,905) as of April 30, 2025, to October 31, 2025, respectively.
Leases represented four property lease agreements with lease terms ranging from 2 years to 3 years. The existing lease payable represents the remaining lease period where three property lease agreements will end in the year 2026 and one property lease agreement will end in the year 2027.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.
Bank Loan Covenants
As of October 31, 2025, we have an outstanding bank loan of S$106,508 (approximately US$81,852) under our temporary bridging loan facility with Enterprise Singapore, which matures in August 2027 and bears interest at 4.75% per annum. This loan is secured by joint and several guarantees from former Chief Executive Officer Andrew Yeo Eng Sian and Executive Chairman Beh Hook Seng. The loan agreement does not contain financial covenants. As of October 31, 2025, we were in compliance with all applicable covenants under this facility.
Related Party Transactions
As discussed above, we have received significant financial support from our major shareholder, Tonghuai SG Enterprise Pte. Ltd., in the form of loans totaling S$3,755,423 (approximately US$2,886,043) as of October 31, 2025. These loans are interest-free, unsecured, and due on demand with no written agreement or commitment for future funding. The interest-free nature of these loans represents a benefit to the Company that would not be available in an arms-length transaction with an unrelated party. If these loans were called for repayment, we would likely be unable to satisfy such demand from our existing resources and would need to seek alternative financing, which may not be available on acceptable terms, or at all. Our dependence on this related party financing represents a material risk to our liquidity and ability to continue as a going concern.
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