StageWise Strategies closes deal issuing 183M shares
The acquired Uzbekistan portfolio becomes the principal business, while local ownership transfer awaits state-register entry expected by October 16, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
StageWise Strategies Corp. (STWI), renamed TEG Overseas, Inc., completed a share exchange on October 13, 2026, acquiring 99.99999012% of TEG SPV in return for issuing 183,098,434 common shares to the sellers. Those exchange shares represented approximately 97.3% of the 188,142,768 common shares outstanding immediately after closing.
Under Uzbek law, ownership transfer takes effect only when the state register records the company as a TEG SPV participant; that entry was expected no later than October 16, 2026. TEG SPV and its operating subsidiaries became the issuer’s principal business, with two hotels and Central Asian Expo in Uzbekistan, while the SEO business is to continue. The parties waived a condition requiring at least $18 million of financing substantially concurrent with closing.
For the six months ended June 30, 2026, TEG SPV reported revenue of $17.375 million versus $18.525 million and net income of $3.606 million versus $5.152 million a year earlier. ADW guaranteed a related party’s $100 million term facility, with maximum potential exposure of $100 million plus interest, fees, costs and penalties. The legacy issuer reported $44,485 in cash as of June 30, 2026 and said additional capital was needed to remain a going concern.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointAcquired portfolio: two hotels and an exhibition center became the principal business.
Negative
- Major pointExchange shares represented approximately 97.3% of post-close common shares.
- Major pointGoing-concern warning: substantial doubt without additional capital.
- Major pointADW disclosed $100 million maximum exposure on a related-party guarantee.
- Moderate pointTEG SPV six-month revenue declined 6.2% to $17.375 million.
Filing Explained
Voting control rests with Artikkhodjaev through TEG Parent; Wyndham trademark-use rights remain subject to a separate Uzbek registration.
After the exchange, TEG Parent held
For Wyndham Bukhara, rights to use the Wyndham trademarks under the sublicense become effective only upon Uzbek state registration; the application filed
8-K Event Classification
Key Figures
Key Terms
Participatory Interests technical
Concurrent Financing Condition financial
net foreign-currency monetary liability position financial
substantial doubt financial
MICE technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What businesses did STWI acquire through TEG SPV?
When does the TEG SPV ownership transfer take effect under Uzbek law?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 14, 2026 (
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) |
Commission File Number | (I.R.S. Employer Identification Number) |
Tel:
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant’s Principal Executive Office)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Closing of Share Exchange Transaction
As reported in a Current Report on Form 8-K filed by StageWise Strategies Corp., a Nevada corporation (the “Company,” “we,” “us,” “our” or “STWI” (prior to the closing of the Share Exchange)) with the Securities and Exchange Commission (“SEC”) on October 8, 2026 (the “October 8th Form 8-K”), the Company executed and entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, TEG SPV LLC, a limited liability company organized under the laws of the Republic of Uzbekistan (“TEG SPV”), Tourism and Entertainment Group LLC, a limited liability company organized under the laws of the Republic of Uzbekistan and the holder of 67.99999012% of the participatory interests in the charter capital of TEG SPV (“TEG Parent”), and Ms. Irodakhon Abduvakhitova, an individual and the holder of 32.00000000% of the participatory interests in the charter capital of TEG SPV (the “Individual Seller” and, together with TEG Parent, the “Sellers”). A full summary of the Share Exchange Agreement including, without limitation, the material provisions of the Share Exchange Agreement is set forth in the October 8th Form 8-K and incorporated by reference herein.
Closing. Pursuant to the Share Exchange Agreement, on October 13, 2026 (the “Closing Date”), a closing (the “Closing”) was held at which the transaction contemplated under the terms and conditions of the Share Exchange Agreement (the “Share Exchange Translation”) was consummated, pursuant to which the Company acquired 99.99999012% of the participatory interests in the charter capital of TEG SPV (the “Participatory Interests”) from the Sellers in exchange for the issuance by the Company to the Sellers of an aggregate of 183,098,434 shares of Common Stock (the “Exchange Shares”), of which 124,506,935 shares were issued to TEG Parent and 58,591,499 shares were issued to the Individual Seller (the “Share Exchange”). The Exchange Shares represent approximately 97.3% of the Company, based on the 188,142,768 shares of Common Stock issued and outstanding immediately following the Share Exchange. Wellmore LLC, a limited liability company organized under the laws of the Republic of Uzbekistan and a wholly owned subsidiary of TEG Parent (“Wellmore”), continues to hold the remaining 0.00000988% of the participatory interests in TEG SPV to comply with regulatory requirements in Uzbekistan. As a result of the Share Exchange, TEG SPV became a subsidiary of the Company, and the business of TEG SPV and its operating subsidiaries became the principal business of the Company.
Notwithstanding the Closing of the Share Exchange Transaction on October 13, 2026, as a matter of the mandatory law of the Republic of Uzbekistan, the transfer of the Participatory Interests to the Company will not become effective under the laws of Uzbekistan, and the Company will not be deemed to have officially acquired ownership of the Participatory Interests under the laws of Uzbekistan, until the entry of the corresponding record in the unified state register of legal entities of the Republic of Uzbekistan reflecting the Company as a participant of TEG SPV, which is expected to occur no later than October 16, 2026 (the date of such entry, the “Registration Date”). The parties have agreed to take all actions required under Uzbek law to cause the Registration Date to occur as promptly as practicable following the Closing, including the notarization and filing of the local transfer instruments and required notices.
Waiver of Concurrent Financing. Article VII of the Share Exchange Agreement includes certain conditions which were either required to be satisfied in order to hold the Closing of the Share Exchange Transaction, or, unless otherwise not permitted by law, could be waived by all of the parties to the Share Exchange Agreement. Notwithstanding that the Share Exchange Agreement contains a condition that the Company close on financing resulting in the Company’s raising at least $18,000,000 substantially concurrently with the Closing of the Share Exchange Transaction (the “Concurrent Financing Condition”), on October 13, 2026, all of the parties to the Share Exchange Agreement agreed, in writing, to waive the Concurrent Financing Condition so that such condition was not required to be satisfied to close the Share Exchange Transaction.
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Related Parties. Mr. Jakhongir Abidovich Artikkhodjaev, the Company’s controlling stockholder prior to the Share Exchange, owns approximately 99.93% of the participatory interests in TEG Parent and, indirectly, approximately 67.95% of the participatory interests in TEG SPV. The Individual Seller is the daughter of Mr. Artikkhodjaev. As required by the Share Exchange Agreement, prior to the Closing Date Mr. Artikkhodjaev transferred all shares of Common Stock held of record by him to TEG Parent. Following the Closing, TEG Parent owns approximately 68.30% of the Company’s outstanding Common Stock. Additionally, the Individual Seller, Ms. Irodakhon Abduvakhitova, who also was appointed as a director of the Company, following the Closing, owns approximately 31.14% of the Company’s outstanding Common Stock. Each of the Company’s executive officers and each of its directors prior to the Share Exchange is also an officer or employee of TEG SPV or its affiliates.
Change of Name: Upon the Closing of the Share Exchange Transaction the name of the Company was changed to TEG Overseas, Inc. The terms “Company,” “we,” “us,” “our” in this Current Report on Form 8-K also refer to StageWise Strategies Corp., after its name has been changed to TEG Overseas, Inc., and TEG SPV has become a substantially wholly-owned subsidiary of the Company.
Description of Assets Acquired. TEG SPV, which became a subsidiary of the Company, as a result of the Share Exchange Transaction, directly holds all of the participatory interests in the charter capital of each of AKFA Dream World LLC (“ADW”), Cultural Landmark Hotel LLC (“CLH”), and CAEX LLC (“CAEX”), each a limited liability company organized under the laws of the Republic of Uzbekistan (collectively, the “Operating Subsidiaries”). ADW owns and operates Hilton Tashkent in Tashkent, Uzbekistan; CLH owns and operates a Wyndham-branded hotel in Bukhara, Uzbekistan (“Wyndham Bukhara”); and CAEX owns and operates the Central Asian Expo, an exhibition center in Tashkent, Uzbekistan. The Company intends to operate these properties following the Share Exchange Transaction and will also continue its existing search engine optimization business. A more detailed explanation of the business and assets acquired by the Company is provided elsewhere in this Current Report on Form 8-K under the heading Description of Business beginning on page 5 of this Current Report on Form 8-K.
The Company is not, and immediately before the Closing of Share Exchange Transaction was not, a shell company as defined in Rule 12b-2 under the Exchange Act. The Company is an operating company engaged in providing search engine optimization solutions, which generated revenues of $95,409 and $9,007 for its fiscal years ended September 30, 2025 and 2024, respectively, as reflected in its Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as amended. Accordingly, the information described in Item 2.01(f) of Form 8-K (Form 10 information) is not required to be included in this Current Report; provided, however, that the Company has voluntarily provided such information in order to provide full public disclosure about the business and assets acquired by the company.
The financial statements and pro forma financial information required by Item 9.01 of Form 8-K in connection with the Share Exchange Transaction are filed as exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 to this Current Report on Form 8-K.
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FORM 10 INFORMATION
This Current Report contains “forward-looking statements” within the meaning of applicable federal securities laws. Forward-looking statements provide our management’s current expectations or forecasts of future events, particularly those related to the Company. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Current Report include, but are not limited to, statements about:
| ● | the market for the Company’s hotel, hospitality and exhibition services in Uzbekistan; |
| ● | the Company’s expansion and other plans and opportunities, including the development, acquisition, renovation and management of hotel and exhibition center properties; |
| ● | the Company’s future financial and operating results, including revenues, income, expenditures, occupancy rates, average daily rates, cash balances and other financial and operating items; |
| ● | current and future economic and political conditions in Uzbekistan; |
| ● | the future growth of the Uzbekistan travel and tourism industry as a whole and the hotel and hospitality sector in particular; |
| ● | the Company’s ability to attract guests and corporate customers, and further enhance its brand recognition; |
| ● | the Company’s ability to hire and retain qualified management personnel and key employees in order to enable them to develop its business; |
| ● | changes in applicable laws or regulations in Uzbekistan related to or that could impact the Company’s business; |
| ● | our management of the Company’s business as a U.S. publicly-traded and reporting company; |
| ● | the Company’s obligations under its guarantee of a related party’s $100 million term facility with Halyk Bank of Kazakhstan and the collection of amounts due from related parties; |
| ● | fluctuations in the value of the Uzbek soum against the U.S. dollar; |
| ● | the Company’s ability to maintain its franchise and license agreements with Hilton and Wyndham; |
| ● | the registration of the transfer of the Participatory Interests in the Republic of Uzbekistan; and |
| ● | other assumptions regarding or descriptions of potential future events or circumstances described in this Current Report underlying or relating to any forward-looking statements. |
These forward-looking statements are based on information available as of the date of this Current Report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our management’s views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
In addition, statements that we “believe,” “we expect,” “we anticipate” and similar statements reflect its beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this Current Report, and while our management believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that our management has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, the Group’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements.
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DESCRIPTION OF BUSINESS
General and Pre-Share Exchange Transactions
The Company was incorporated under the name StageWise Strategies Corp.. on July 3, 2023 under the laws of Nevada. It provides search engine optimization (“SEO”) services designed to increase online visibility and improve organic search performance for businesses across a range of industries. Using data analytics and proprietary algorithms, the Company provides keyword research and implementation strategies to assist clients in promoting their products and services online. The Company provides its services through its website and generates revenue primarily from subscription fees. It offers three monthly subscription plans: (i) Basic, (ii) Standard and (iii) Premium, which provide varying levels of functionality and request allowances. The Company also offers a subscription-based API tool for users managing multiple projects, which provides an expanded query quota, additional features and the ability to export acquired keywords.
The Company’s shares of Common Stock are currently quoted on the OTC Markets on the OTCID Basic Market. The Company is currently using its commercially reasonable efforts to reinstate the quotation of its shares of Common Stock on the OTCQB, as soon as possible; provided, however, there can be no assurance that the OTC Markets will approve the Company’s application or that the Company will satisfy all applicable OTCQB requirements.
On June 5, 2026, Mr. Artikkhodjaev completed the purchase of 3,000,000 shares of Common Stock (representing approximately 74.2% of the then issued and outstanding shares of Common Stock): 1,000,000 shares from Viktor Balan for an aggregate purchase price of $250,000 and 2,000,000 shares from Yuliia Zaporozhan for an aggregate purchase price of $500,000, pursuant to Securities Purchase Agreements, each dated June 5, 2026. In connection with that change of control, all of the then-serving directors and officers of the Company resigned, and Elmurod Sopiev, Temur Zokirov, Bahtiyor Kadirov and Elina Davidyan were appointed, as reported in the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2026.
On June 30, 2026, STWI entered into a Share Subscription Agreement (the “Subscription Agreement”) with Mr. Artikkhodjaev, pursuant to which the Company agreed to issue and sell 1,000,000 shares of Common Stock for an aggregate purchase price of $250,000, or $0.25 per share. The share issuance to Jakhongir Abidovich Artikkhodjaev was completed on July 20, 2026.
As a result, Jakhongir Abidovich Artikkhodjaev beneficially owned approximately 79.2% of stock in STWI as of July 20, 2026.
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Corporate Structure Following the Share Exchange
As a result of the Share Exchange, our corporate organization structure is as follows:
Overview of Post-Share Exchange Business
Through the Share Exchange, the Company acquired TEG SPV and, indirectly, the Operating Subsidiaries. The Company conducts its hospitality and exhibition business through the Operating Subsidiaries. As a result, although the Company intends to keep the SEO business, the business of TEG SPV and the Operating Subsidiaries has become the principal business of the Company, as described below. In this section, references to “TEG SPV” include TEG SPV and the Operating Subsidiaries, unless the context otherwise requires.
TEG SPV is a hospitality and exhibition group operating in the Republic of Uzbekistan. TEG SPV operates in the hospitality and exhibition segments, via three core properties including two hotels and one exhibition center:
| ● | Hilton Tashkent, a full-service, five-star hotel in Tashkent operated by ADW under a franchise agreement with the Hilton brand, providing accommodation, food and beverage services, events and ancillary hospitality services; | |
| ● | Wyndham Bukhara, a full-service, four-star hotel in Bukhara operated by CLH under a franchise agreement with the Wyndham brand, providing accommodation, food and beverage services, events and ancillary hospitality services; and | |
| ● | Central Asian Expo, an exhibition and events venue operated by CAEX, providing rental of exhibition space together with related event organization and support services. |
TEG SPV generates revenue from the following principal streams: rooms (accommodation), food and beverage, events, and other services such as laundry, spa, gym, parking and the rental of facilities and office space. We manage our business through two reportable segments, Hospitality and Exhibition, which reflect the manner in which our chief operating decision maker evaluates performance and allocates resources.
For the six months ended June 30, 2026, TEG SPV generated revenue of $17,375 thousand and net income of $3,606 thousand, compared with revenue of $18,525 thousand and net income of $5,152 thousand for the six months ended June 30, 2025. For the fiscal year ended December 31, 2025, TEG SPV generated revenue of $42,910 thousand and net income of $14,364 thousand, compared with revenue of $35,173 thousand and net income of $4,552 thousand for the fiscal year ended December 31, 2024. As of June 30, 2026, TEG SPV had total assets of $124,690 thousand and total shareholders’ equity of $85,201 thousand, compared with total assets of $135,158 thousand and total shareholders’ equity of $88,668 thousand as of December 31, 2025.
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As of the date of this Current Report, TEG SPV owns the following properties.
| Meeting, Exhibit and | ||||||||||
| Pre-Function Space | ||||||||||
| Property | Location | Rooms | (sq. ft.) | |||||||
| Hilton Tashkent | 1 Ukchi Street, Tashkent, 100027, Uzbekistan | 258 | 490,884 | |||||||
| Wyndham Bukhara | Alisher Navoi Avenue 8, Bukhara, 200100, Uzbekistan | 212 | 252,944 | |||||||
| Central Asian Expo | 1 Milliy Bog Street, Mirzo Ulugbek District, Tashkent, Uzbekistan | - | 220,502 | |||||||
Industry Overview
TEG SPV operates in the hospitality and MICE industries. The principal markets in which it competes are Tashkent and Bukhara, Uzbekistan. The principal competitors of TEG SPV’s hotels include other internationally branded and independent hotels operating in Tashkent and Bukhara, including JW Marriott, Hyatt Regency Tashkent, InterContinental Tashkent, Courtyard by Marriott Tashkent, Radisson Blu Hotel Tashkent, Lotte City Hotel Tashkent Palace, Mercure Tashkent and similar hotels and hospitality properties. CAEX competes in the exhibitions and events market, primarily with other exhibition and event venues, such as Uzexpocentre and Tashkent City Congress Centre, as well as organizers, such as ITECA, International Expo Group and BMCA, in Tashkent and Uzbekistan.
TEG SPV’s management estimates that the principal factors affecting the hospitality and MICE industries include (1) the desirability and perceived attractiveness of Tashkent and Bukhara as destinations for business, leisure and MICE activities, (2) the financial condition and capacity of the airline and other transportation-related industries and the resulting impact on travel, (3) geopolitical risks in Central Asia, and (4) changes in customer demand, competition, technology, regulation and general economic conditions, each of which could affect the demand for hospitality and MICE services.
TEG SPV believes its principal competitive strengths include (1) established relationships with leading global hotel brands, including Hilton and Wyndham, (2) extensive knowledge of the Uzbek hospitality market and an established network of local and international partners, providing access to prime sites and supporting its real estate development capabilities, (3) strong operating capabilities and a proven track record of developing and operating high-quality business and leisure tourism assets, supported by a dedicated talent development platform and an efficient operating model, and (4) a portfolio positioned to benefit from the continued development of business, leisure and MICE tourism in Uzbekistan.
Business Operations
Hospitality Operations
Hilton Tashkent
On December 13, 2018, ADW and Hilton Hotel Worldwide Manage Limited (“Hilton”) entered into a franchise agreement (the “Hilton Agreement”), pursuant to which ADW was granted a non-exclusive license to operate a 258-room “Hilton” branded hotel in Tashkent (Hilton Tashkent). The Hilton Agreement has an approximately 25-year term, with no renewal or extension rights. ADW paid a one-time $200,000 franchise application fee and, commencing upon Hilton Tashkent’s opening, is required to pay monthly marketing fees equal to 4% of prior-month gross rooms revenue and royalty fees based on gross rooms and non-rooms revenue, ranging from 3% to 5% of gross rooms revenue and 1% to 2% of non-rooms revenue, plus applicable taxes and other fees.
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ADW was also required to complete construction and refurbishment of Hilton Tashkent by the specified deadlines, including by September 1, 2020, and operate Hilton Tashkent in compliance with Hilton’s brand standards, maintain required insurance and records, and comply with certain non-competition restrictions. Hilton is subject to a limited territorial restriction prohibiting it from operating another “Hilton” branded hotel within a 10-kilometer radius of Hilton Tashkent for 120 months following the execution date of the Hilton Agreement, subject to certain exceptions.
Hilton has the right to terminate the Hilton Agreement for specified defaults, including non-payment, failure to comply with the agreement or brand standards, failure to maintain insurance, repeated defaults, insolvency, cessation of operations, unauthorized transfers, certain sanctions or anti-corruption events, and failure to timely complete the Hotel Work. Hilton may also impose interim remedies, including suspension from its reservation system and disabling of software. Upon early termination, ADW must cease using Hilton’s marks and system and pay liquidated damages, generally based on the number of approved guest rooms or fees payable during the preceding 24 months, as applicable, together with certain indemnification obligations. The Hilton Agreement is governed by English law, with disputes subject to ICC arbitration seated in London, England and conducted in English.
Wyndham Bukhara
On December 29, 2020, Wide Tent System LLC (“Wide Tent”) and Wyndham Hotel Group (UK) East Limited (“Wyndham”) entered into a services agreement (the “Wyndham Services Agreement”) and a sublicense agreement (the “Wyndham Sublicense Agreement” and together with the Wyndham Services Agreement, the “Wyndham Agreements”). Each of the Wyndham Agreements has a 20-year term commencing on its effective date, with no renewal rights.
Under the Wyndham Sublicense Agreement, Wyndham sublicensed to Wide Tent the “Wyndham” system and trademarks to operate a hotel facility in Bukhara, Uzbekistan (“Wyndham Bukhara”) as a “Wyndham Bukhara” property. Under the Wyndham Services Agreement, Wyndham provides reservation, sales and marketing, training, purchasing and consulting services.
Wide Tent is required to pay an initial fee of US$52,000, monthly royalty fees based on gross room revenues, and monthly service fees and other charges under the Wyndham Services Agreement. The royalty rate is 2.0% for license years one and two, 3.5% for years three and four, and 4.5% thereafter. Overdue amounts accrue interest at 1.5% per month, subject to applicable law. Wide Tent is also required to operate and maintain Wyndham Bukhara in accordance with Wyndham’s standards, participate in its reservation and marketing programs, complete required training, maintain specified insurance, undertake required renovations, and satisfy other operational and indemnification obligations.
Wyndham Bukhara was required to open by June 30, 2022. Wyndham may terminate the Wyndham Agreements following specified uncured defaults or immediately upon certain events, including cessation of operation as a “Wyndham Bukhara” property, certain payment or reporting defaults, prohibited transfers, insolvency, material misrepresentations, and other specified events. The agreements may also be terminated in certain circumstances relating to political events, competition-law compliance, casualty or condemnation. Upon certain terminations, Wide Tent is required to pay liquidated damages based generally on fees accrued during the preceding 24 months, subject to specified exceptions and adjustments.
The Wyndham Agreements generally prohibit Wide Tent from transferring its interests or effecting a change of control without Wyndham’s prior written consent and satisfaction of specified conditions. Certain permitted transfers and public offerings or listings are exempt. Any permitted transfer generally must cover both Wyndham Agreements and be made to the same transferee. TEG believes this requirement does not apply to the Share Exchange Transaction because it does not constitute a change of control.
Wide Tent is also subject to territorial and non-compete restrictions and, following termination, must cease use of the Wyndham system and trademarks, de-identify Wyndham Bukhara, transfer specified domain names, return confidential materials and satisfy outstanding payment obligations. The Wyndham Agreements are governed by the laws of England and Wales, with disputes resolved by LCIA arbitration seated in London and conducted in English.
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While Wide Tent operated Wyndham Bukhara, the hotel building and related items of property, plant and equipment were leased from J-United LLC, the company controlled by the Ultimate Beneficial Owner. According to the lease agreement, Wide Tent paid monthly rent of UZS 1,626,000 thousand (approximately US$138,000), including the value added tax (VAT).
On December 14, 2023, Wide Tent entered into an agreement with Aimbridge Hotel Management LLC (“AHM”), a company controlled by the Ultimate Beneficial Owner, pursuant to which AHM agreed to supply food and beverage products to Wide Tent for an aggregate amount of UZS 100,000,000 thousand. Furthermore, on February 1, 2024, Wide Tent and AHM entered into an agreement pursuant to which AHM would arrange accommodation for guests at Wyndham Bukhara. For purposes of the 2024 and 2025 financial statements, the financial statements of AHM were combined with those of Wide Tent and presented as part of Wide Tent’s financial statements.
On December 2, 2025, CLH was incorporated as a wholly owned subsidiary of TEG Parent. Pursuant to a decision of the owner of J-United LLC, the assets and liabilities related to the building of Wyndham Bukhara were contributed to CLH. The management and employees involved in the operations of Wyndham Bukhara were transferred from Wide Tent to CLH’s payroll. The lease agreement between J-United LLC and Wide Tent, as well as the agreements between Wide Tent and CLH were terminated.
On December 24, 2025, pursuant to a decision of the owners of TEG Parent, TEG Parent’s ownership interest in CLH was transferred to TEG SPV as a contribution to the share capital of TEG SPV. Accordingly, TEG SPV became the 100% owner of CLH.
While Wide Tent remained the holder of the license to operate Wyndham Bukhara, on January 5, 2026, Wide Tent and CLH entered into an agreement pursuant to which CLH leased the Wyndham Bukhara building and related property, plant and equipment to Wide Tent for UZS 45 million (approximately US$3,800) per month. On March 30, 2026, Wide Tent and CLH entered into an agreement pursuant to which Wide Tent outsourced personnel from CLH for the operation of Wyndham Bukhara for UZS 720 million (approximately US$61,000) per month.
Pursuant to an assignment, assumption and amendment agreement entered into by Wide Tent, CLH and Wyndham on August 7, 2026, all rights, title and interest of Wide Tent in and to the Wyndham Service Agreement were transferred to CLH. Following the transfer of the license, the lease agreement and personnel outsourcing agreement between CLH and Wide Tent were terminated.
Exhibition Operations
Central Asian Expo
CAEX owns and operates the Central Asian Expo, an international exhibition and convention complex for exhibitions, trade fairs, conventions and other business events, located in a 63,000-square-meter site in Tashkent, Uzbekistan. Central Asian Expo comprises approximately 23,000 square meters of internal exhibition space, including 18,000 square meter multifunctioning pavilion and a 2-floor foyer of 5,000 square meters with 10 meeting rooms and a 60-person conference room, and provides parking for more than 700 vehicles, including designated VIP parking spaces.
Central Asian Expo operates under two principal business models. First, it leases its exhibition and event facilities to third-party organizers, which organize and conduct their own exhibitions and trade fairs at the venue. Under this model, Central Asian Expo primarily generates revenue from the rental of its exhibition and event facilities.
Second, Central Asian Expo organizes and promotes exhibitions and other events under its own brands. For these events, CAEX generates revenue primarily through the sale or reservation of exhibition space and related services to participating exhibitors. Exhibitors may select either raw exhibition space or pre-built stands and are required to comply with CAEX’s applicable stand construction, safety and operating requirements.
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CAEX markets the Central Asian Expo property and events to domestic and international exhibitors and visitors and seeks to attract participants from Uzbekistan, other Central Asian countries, and other international markets. CAEX also works with industry associations, event organizers and exhibition marketing platforms to promote its events and expand its participant base.
Customers
TEG SPV generates revenue primarily from providing accommodation, food and beverage, events and other services. For the fiscal years ended December 31, 2025 and 2024, accommodation, food and beverage, events and other services accounted for approximately 42.8%, 37.7%, and 19.5% and 53.9%, 34.0%, and 12.1% of TEG SPV’s revenue, respectively. In the fiscal year ended December 31, 2025, SKY Events LLC accounted for 12% of TEG SPV’s revenue. TEG SPV did not have any major customer accounting for 10% or more of its revenue in the fiscal year ended December 31, 2024.
Suppliers
TEG SPV and its subsidiaries purchase or lease their fixtures, furnishings, equipment, signs, inventory, food and beverages from third party suppliers. For the fiscal years ended December 31, 2025 and 2024, Empire Aviation Group FZCO, to whom ADW paid for aircraft lease on behalf of Mr. Artikkhodjaev, the principal owner of TEG SPV, accounted for 20% and 22% of TEG SPV’s purchases, respectively. Furthermore, Discovery Invest Global LLC, a contractor for construction works for ADW and CLH, accounted for 38% and 30% of total purchases of TEG SPV for the fiscal years ended December 31, 2025 and 2024, respectively.
Seasonality
TEG SPV’s business is subject to seasonal fluctuations. Historically, the operating results of its hotels and resorts division have been affected by seasonal variations in travel and tourism activity, while the operations of CAEX are also subject to fluctuations in trading activity and market conditions as changes in trading activity may affect demand for exhibitions and, in turn, the business of CAEX.
The principal factors contributing to seasonality in the hotels and resorts division include the timing and volume of leisure and business travel, tourism flows, and the seasonal nature of demand for accommodations. Hilton Tashkent and Wyndham Bukhara properties typically experience higher occupancy levels during April through May and September through October, reflecting periods of increased business and leisure travel. Conversely, hotel occupancy and operating results may be comparatively weaker during the winter months and other periods of lower travel activity.
As a result, the hotels and resorts division may experience fluctuations in quarterly revenue, occupancy and operating results, with the second and fourth quarters generally benefiting from higher-demand travel periods. The timing and magnitude of these seasonal patterns may vary from year to year depending on tourism trends, business travel, major events, economic conditions and other factors.
CAEX’s operating results may also fluctuate from quarter to quarter due to changes in trading volumes, market activity and other factors affecting the capital markets. The periods from the second half of February through early June and from the second half of August through early December are generally considered “high-season” periods, during which the greatest number of events are typically organized. Accordingly, TEG SPV’s quarterly operating results may not be indicative of its annual results, and comparisons of operating results between individual quarters may be affected by seasonal and other fluctuations.
Intellectual Property
TEG SPV, through its subsidiaries, owns two trademarks: Delta Plaza and Citizen Apartments. Additionally, TEG SPV, through its subsidiaries, is licensed to use the Hilton and Wyndham trademarks at the respective hotels; provided, however, that the applicable sublicense rights for the Wyndham trademarks become effective only upon state registration with the Ministry of Justice of the Republic of Uzbekistan. An application for registration was filed on September 25, 2026, and registration is currently pending.
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Certificates and Licenses
TEG SPV’s operations are subject to governmental laws, regulations, permits, approvals, certificates and licenses in Uzbekistan. Material licenses, permits and approvals include TEG SPV Certificate of registration No. 2980923, issued by the Public Services Center of Yashnobod District, Tashkent City, on October 20, 2025 for an indefinite term. TEG SPV believes that it is in material compliance with applicable requirements.
Employees
As of August 31, 2026, TEG SPV had 16 employees; ADW had approximately 497 employees, 28 of which are independent contractors operating on the basis of civil law contracts; CLH had approximately 141 employees, 56 of which are independent contractors operating on the basis of civil law contracts; and CAEX LLC had approximately 137 employees, 60 of which are independent contractors operating on the basis of civil law contracts. All of TEG SPV and its subsidiaries’ employees are located in Uzbekistan.
TEG SPV believes that it and its subsidiaries maintain a good working relationship with their employees, and TEG SPV and its subsidiaries have not experienced material labor disputes in the past. None of its employees are represented by labor unions.
History and Organization
TEG SPV was formed on October 20, 2025 as a holding company. In September 2026, TEG SPV underwent a change in shareholding structure. As of the date of this Information Statement, TEG Parent, the Individual Seller, and Wellmore own 67.99999012%, 32.00000000%, and 0.00000988% of the participatory interests in TEG SPV, respectively. Wellmore is 100% owned by TEG Parent.
ADW was incorporated on December 6, 2017 and TEG SPV became its 100% owner on December 22, 2025. CLH was incorporated on December 2, 2025, and TEG SPV became its 100% owner on December 19, 2025. CAEX was incorporated on December 2, 2025, and TEG SPV became its 100% owner on December 12, 2025.
Below is an illustration of the corporate structure of TEG SPV as prior to the Closing
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TEG SPV Properties
TEG SPV’s principal executive office is located at 64/2 Mahtumquli Street, Yashnobod District, Tashkent, 2K, 100000. TEG SPV leases the office space of approximately 194 square feet at this location for its corporate operations from Way II Management LLC for a monthly rent of $135, with the lease expiring on October 31, 2026.
TEG SPV’s hotel and exhibition center properties are listed as below. TEG SPV, through its subsidiaries, owns each of such properties.
| Meeting, Exhibit and | ||||||||||
| Pre-Function Space | ||||||||||
| Property | Location | Rooms | (sq. ft.) | |||||||
| Hilton Tashkent | 1 Ukchi Street, Tashkent, 100027, Uzbekistan | 258 | 490,884 | |||||||
| Wyndham Bukhara | Alisher Navoi Avenue 8, Bukhara, 200100, Uzbekistan | 212 | 252,944 | |||||||
| Central Asian Expo | 1 Milliy Bog Street, Mirzo Ulugbek District, Tashkent, Uzbekistan | - | 220,502 | |||||||
Legal Proceedings
TEG SPV and its subsidiaries are involved from time to time in claims and lawsuits incidental to the ordinary course of their businesses, such as personal injury actions by guests and employees and complaints alleging employee discrimination. TEG SPV maintains various insurance policies, including general liability, property damage, workers’ compensation and business interruption insurance, which it believes provide adequate coverage for these claims. Neither the Company nor TEG SPV is currently a party to any pending material legal proceedings, and, to the knowledge of management, no material legal proceedings have been threatened against the Company or TEG SPV.
Laws and Regulations
TEG SPV and its Operating Subsidiaries are subject to various laws and regulations of the Republic of Uzbekistan governing their corporate activities and business operations. The principal applicable laws and regulatory requirements include, without limitation, those described below.
Corporate Regulation. TEG SPV and its Operating Subsidiaries are established as limited liability companies under Uzbek law. Their corporate activities are primarily governed by the Civil Code of the Republic of Uzbekistan and Law No. ZRU-1137 dated April 21, 2026, “On Limited Liability Companies”, which regulate, among other matters, corporate governance, the rights and obligations of participants, the transfer of participatory interests, the distribution of net profit, and corporate reorganization and liquidation.
Hospitality and Tourism Regulation. The operation of Hilton Tashkent and Wyndham Bukhara is primarily subject to Law No. ZRU-549 dated July 18, 2019, “On Tourism”, and Resolution No. 433 of the Cabinet of Ministers dated July 10, 2020, which, among other matters, establishes rules for the provision of accommodation services in Uzbekistan. These regulations govern the provision of hotel services, requirements applicable to accommodation facilities, and the protection of guests' rights. Accommodation facilities are also subject to mandatory certification requirements under Uzbek law.
Food and Beverage, Health and Safety Regulation. The food and beverage operations of the Operating Subsidiaries are subject to applicable sanitary, hygiene and food safety requirements, including Law No. ZRU-393 dated August 26, 2015, “On Sanitary and Epidemiological Welfare of the Population”, and the rules governing the production and sale of catering products and services approved by Resolution No. 75 of the Cabinet of Ministers dated February 13, 2003. The Group’s properties and operations are also subject to fire safety requirements under Law No. ZRU-226 dated September 30, 2009, “On Fire Safety”, and applicable occupational health and safety regulations.
Exhibition and Event Operations. CAEX’s activities involving the operation of exhibition facilities and the organization of exhibitions, conferences and other events are subject to applicable civil, commercial and public safety regulations. Certain events may also be subject to the Rules for Conducting Mass Events approved by Resolution No. 205 of the Cabinet of Ministers dated July 29, 2014, which establish permit requirements and rules relating to public order and safety for events falling within their scope.
Other Applicable Regulations. TEG SPV and its Operating Subsidiaries are also subject to generally applicable Uzbek legislation, including Law No. ZRU-701 dated July 14, 2021, “On Licensing, Permitting and Notification Procedures”, the Labor Code of the Republic of Uzbekistan, Law No. ZRU-547 dated July 2, 2019, “On Personal Data”, and Law No. 221-I dated April 26, 1996, “On Protection of Consumer Rights”. The use of trademarks, including the Hilton and Wyndham brands, is governed by applicable intellectual property legislation, including Law No. 267-II dated August 30, 2001, “On Trademarks, Service Marks and Appellations of Origin of Goods”. The Group is additionally subject to applicable taxation, real estate, land use and environmental regulations in connection with its business operations.
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RISK FACTORS
An investment in our securities involves a high degree of risk. In addition to the other information contained in this Information Statement, stockholders should carefully consider the following risks in evaluating the Company and the matters described herein. If any of the following risks actually occur, as well as other risks not currently known to us or that we currently consider immaterial, our business, operating results and financial condition could be materially adversely affected. As a result, the trading price of our Common Stock could decline, and stockholders may lose all or part of their investment in our Common Stock.
The risks discussed below also include forward-looking statements, and our actual results may differ materially from those discussed in these forward-looking statements. See “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS” in this Information Statement. In assessing the risks described below, you should also consider the other information contained in this Information Statement, including our financial statements and the related notes thereto.
Risks Related to Our Industry, Business and Operations
Our revenues are concentrated in a small number of properties, so any disruption at one asset could disproportionately affect us.
Substantially all of our revenue is generated by Hilton Tashkent, Wyndham Bukhara, and Central Asian Expo. Because our portfolio is not broadly diversified, an adverse event affecting any single property — including physical damage, closure for renovation, loss of a brand affiliation, a localized decline in demand, or a health, safety or security incident — could have a materially greater impact on our operating results and financial performance than it would for a company with a larger, more geographically diverse portfolio.
Our operating results depend on demand for travel, tourism, meetings and events, which is sensitive to conditions largely outside its control.
Demand for our Operating Subsidiaries’ rooms, function space and events depends on general economic conditions, business and consumer confidence, the strength of the market of the MICE industry, travel patterns, and factors such as economic downturns, currency movements, changes in disposable income, fuel and airfare costs, geopolitical instability, terrorism, civil unrest, and public-health emergencies or travel restrictions. Many of these factors are unpredictable. A significant or prolonged decline in travel or group-meeting demand, regardless in Uzbekistan, the Central Asian region, or globally, may reduce the occupancy, rates and event bookings of our properties and materially harm its business.
We depend on franchise agreements with Hilton and Wyndham to operate its hotel properties.
Our subsidiaries, ADW and CLH have agreements with Hilton and Wyndham, respectively, to operate the hotels under the respective agreements and to operate their properties under the brand names. To maintain the brand names, ADW and CLH are required to perform certain obligations and meet certain requirements as set forth in the agreements. Any failure to deliver quality service, maintain the brands’ reputation, perform the required obligations, or the loss, non-renewal, breach or early termination of a management or franchise agreement, could materially harm our hotel business operations and financial conditions.
Our meetings and convention business depends on group booking cycles that are volatile and booked well in advance.
A significant portion of our business, particularly at the Central Asian Expo, comes from group and convention customers who often book event space several months in advance. Booking pace, cancellations, attrition and shifts in the size or timing of events can cause our results to vary significantly from period to period and can make forecasting difficult. Economic uncertainty, corporate travel policies, or competition from other venues could reduce future group bookings and the associated rooms, food-and-beverage and banquet revenue.
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AFKA Dream World LLC (“ADW”) has guaranteed a substantial third-party debt obligation, which could materially adversely affect our financial condition, results of operations and liquidity.
In March 2025, ADW guaranteed the obligations of a related party under a $100,000,000 term facility with Halyk Bank of Kazakhstan and repledged material assets that also secure ADW’s own indebtedness. The borrower is under the common control of ADW’s ultimate beneficial owner but is not part of ADW.
If the borrower fails to satisfy its obligations under the facility, the lender may seek payment directly from ADW. ADW’s maximum potential exposure under the guarantee is $100,000,000, plus accrued interest, fees, costs and penalties, which substantially exceeds its stockholders’ equity. Any enforcement of the guarantee or the related collateral could require ADW to use significant financial resources, incur additional indebtedness, dispose of assets, or divert resources from its operations and growth initiatives. As a result, any demand under the guarantee could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
Ours properties are geographically concentrated in Uzbekistan, exposing us to regional risks.
All of our properties are located in Uzbekistan, with both Hilton Tashkent and Central Asian Expo in Tashkent city. As a result, adverse conditions affecting Uzbekistan, including local economic downturns, changes in local regulation or taxation, infrastructure limitations, natural disasters, or reductions in inbound tourism to Uzbekistan, could affect our properties more severely than a geographically diversified portfolio.
Our business is seasonal, and its fixed costs limit its ability to reduce expenses when demand declines.
TEG SPV’s properties’ occupancy level, average daily rate and event volumes vary by season and by the group-meeting calendar, so its revenues and cash flows are uneven across the year. A large portion of our operating costs is fixed, and it may be unable to reduce those costs quickly in response to a shortfall in demand. As a result, a decline in revenue during a peak period, or an unexpected event during a high-demand season, could have a disproportionate effect on its annual results.
The hospitality and real estate businesses are capital-intensive, and real estate investments are illiquid.
Owning and operating hotels and a convention center requires ongoing capital for maintenance, brand-standard compliance and periodic renovation. At the same time, real estate investments are relatively illiquid and, in Uzbekistan, may be further constrained by restrictions on foreign ownership and on the transfer of land-use rights. If we are not able to fund the required capital expenditures, or to sell or refinance a property promptly on favorable terms in response to changing conditions, our financial condition and results of operations could be adversely affected.
We face significant competition, and new supply could reduce its occupancy and rates.
Our Operating Subsidiaries compete with other hotels and conference centers operating in Uzbekistan, including Swissotel, JW Marriott, Mercure Tashkent North, local hotel brands, and conference and other exhibition centers on the basis of location, brand, quality and amount of function space, service, price and the ability to accommodate an entire event in one location. New hotel or venue supply in our markets, aggressive pricing by competitors, or the growth of alternative lodging and virtual-meeting options could reduce its occupancy, rates and event bookings.
Damage to our reputation or to the brands under which our properties operate could harm our business.
Our success depends on the reputation of our properties and of the brands under which they operate. Negative publicity relating to service quality, safety or security incidents, health matters, data breaches, environmental or labor issues, or conduct by a subsidiary or by us, including through social media, could reduce demand and harm our operating results, even if the underlying claims are unfounded.
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Our operation and profitability depend on the availability of qualified personnel, and rising labor costs could reduce our profit margins.
The operation of our hotels and conference center depends on attracting, training and retaining qualified management and hospitality staff. Competition for talent, wage increases, changes in labor laws, and any labor disputes or work stoppages could increase our costs or disrupt operations. We also depend on the continued service of certain senior executives, the loss of whom could adversely affect its operations.
We and ours subsidiaries rely on information technology, and any failure or security breach could disrupt our business and expose us to liability.
Our properties depend on information technology systems including reservation, property-management, event-management, payment and financial systems, many of which are provided and controlled by third parties. A failure, interruption, ransomware attack or security breach of these systems could disrupt operations, compromise guest, employee or business data, and expose us to remediation costs, regulatory penalties, litigation and reputational harm. Cyber threats are constantly evolving and may not be detected or prevented.
Changes in privacy and data-protection laws could increase our costs and exposure.
We and our subsidiaries collect and process personal data of guests and employees and are subject to privacy and data-protection laws in Uzbekistan and, potentially, other jurisdictions from which their guests originate. These laws are evolving and may impose data-localization, consent, breach-notification and cross-border-transfer requirements. Compliance may be costly, and any actual or alleged violation could result in fines, litigation and reputational harm.
Our insurance may not cover all losses, and catastrophic events could exceed its coverage.
We and our subsidiaries maintain insurance of the types and in the amounts that we believe are customary for our industry, but such coverage is subject to limits, deductibles and exclusions. Certain events such as earthquakes, floods, fires, pandemics, acts of terrorism or war, and business interruption, may be uninsurable, underinsured or subject to coverage disputes. A significant uninsured or underinsured loss could materially harm our financial condition.
Our properties are subject to environmental, health and safety regulation that could impose significant liability.
Our properties are subject to environmental, building, fire, health and safety laws and regulations, and we may be liable for the costs of investigating and remediating hazardous or toxic substances at properties that our subsidiaries own or operate, regardless of fault. The presence of such conditions, or the failure to comply with applicable requirements, could result in fines, remediation costs, restrictions on use, and reduced value of, or ability to finance, the affected property.
Failure to protect the trademarks and other intellectual property used in our business could harm it.
Our business relies on brand names, trademarks and other intellectual property, specifically the Hilton and Wyndham brands pursuant to the respective franchise and license agreements. If our subsidiaries fail to protect such intellectual property, or if we or our subsidiaries are found to infringe the rights of others, the value of the affected brands could decline and our business could be harmed.
Risks Related to Our Operations in Uzbekistan
Economic, political and social developments in Uzbekistan and Central Asia could adversely affect our business.
Substantially all of our operations and assets are located in Uzbekistan, an emerging market. Emerging markets are subject to greater risks than more developed markets, including economic instability, high or volatile inflation and interest rates, currency fluctuations, changes in government policy or leadership, political or social instability, regional tensions, and shifts in trade or tourism policy. Any of these developments, in Uzbekistan or Central Asia, could reduce demand for our properties, increase its costs, impair its assets, or otherwise materially harm us, and could be difficult to predict or mitigate.
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Fluctuations in the value of the Uzbekistan soum, and restrictions on currency conversion, could adversely affect TEG SPV.
TEG SPV’s functional currency is the Uzbekistan soum, although TEG SPV’s reporting currency is U.S. Dollars. Depreciation or volatility of the soum against U.S. Dollars could increase our costs, reduce the reported value of its revenues and assets, and make it more difficult to service any hard-currency obligations. In addition, under Uzbek foreign exchange regulations, while there are no quantitative limits on converting soum into foreign currency, corporate conversions are strictly purpose-driven and require a formal application with supporting documentation. Purchased foreign currency must be used for its stated purpose within seven business days of receipt or otherwise resold to the commercial bank.
Uzbekistan’s legal and regulatory system is still developing, and changes in law or inconsistent enforcement could harm us.
The legal and regulatory framework in Uzbekistan continues to develop and may be less predictable than in more established jurisdictions. Laws and regulations, including those governing foreign investment, real property and land use, hospitality and tourism, licensing, currency controls, taxation, competition, labor, and the environment may change, sometimes with limited notice or retroactive effect, and may be subject to inconsistent or unpredictable interpretation and enforcement. Judicial and administrative processes may be less developed, and we may have limited or uncertain recourse. Any of these factors could increase our compliance costs and create uncertainty about its rights and obligations.
Our rights to the land on which our properties are subject to restrictions of Uzbek laws and regulations.
In Uzbekistan, legal entities may hold land parcels under the right of ownership, permanent use, or lease. Foreign citizens and legal entities, stateless persons, and enterprises with foreign investment may own land parcels only under a lease. Any revocation, non-renewal, adverse modification or reinterpretation of these rights, or any change in the law governing them, could impair our ability to operate or finance the affected property and could materially harm us.
It may be difficult for investors to enforce judgments in Uzbekistan.
Our Operating Subsidiaries are organized under the laws of the Republic of Uzbekistan, where substantially all of our assets are located and our directors and officers are resided. As a result, it may be difficult or impossible for investors to enforce judgments obtained in U.S. courts in Uzbekistan. Uzbekistan may not have treaties providing for the reciprocal recognition and enforcement of foreign judgments, and local courts may decline to enforce them.
We may be subject to anti-corruption, sanctions and export-control risks.
We may be subject to anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and applicable Uzbek law, as well as economic-sanctions and export-control regimes administered by the United States, the European Union and others. Operating in an emerging market like Uzbekistan, and interacting with government authorities and third-party intermediaries, increases the risk of actual or alleged violations. Any violation, or the imposition of new sanctions affecting Uzbekistan or the region or persons with whom we deal, could result in penalties, restrictions on its business, and reputational harm, notwithstanding its compliance efforts.
Changes in Uzbekistan tax law or its administration could increase our tax burden.
Our operations are subject to corporate income tax, value-added tax, tourism or hotel levies, property and land-related charges, and withholding taxes on dividends, interest and certain payments in Uzbekistan. Tax law and its administration in emerging markets can change frequently and may be applied inconsistently or retroactively. The reduction, expiration or loss of any tax incentives available to tourism or hospitality investments, or an adverse tax assessment, audit or reinterpretation, could increase its tax burden and harm our results.
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Our growth depends in part on the continuation of government policies that support tourism.
There is no assurance that the Uzbekistan government will enact or continue policies that favor tourism and the hospitality and MICE industries or that they will achieve their intended effects. A reversal of, or reduction in, government support for tourism, or a deterioration in Uzbekistan’s attractiveness as a destination, could reduce demand for our properties.
Risks Related to the Share Exchange Transaction
We may not realize the anticipated benefits of the Share Exchange Transaction, and our ability to successfully operate and grow the business following the consummation of the Share Exchange Transaction is not guaranteed.
Following the consummation of the Share Exchange Transaction, our ability to achieve the anticipated benefits of the transaction will depend on a number of factors, including our ability to effectively manage the combined operations, retain key personnel, execute our business strategy and address operational and other challenges that may arise.
In addition, following the consummation of the Share Exchange Transaction, we may experience the departure of certain key personnel of TEG SPV or the Company. The loss of the services of key personnel, or our inability to recruit and retain qualified personnel, could materially adversely affect the business, operations, financial condition and prospects of the Company following the Share Exchange Transaction. If we are unable to successfully operate and grow the acquired business or realize the anticipated benefits of the Share Exchange Transaction, our business, financial condition and results of operations could be materially adversely affected.
If the anticipated benefits of the Share Exchange Transaction do not meet the expectations of investors, stockholders or securities analysts, the market price of our Common Stock may decline.
The market price of our Common Stock following the consummation of the Share Exchange Transaction may be affected by whether the Share Exchange Transaction and the anticipated benefits thereof meet the expectations of investors, stockholders and securities analysts. If we do not achieve the operational, financial or strategic benefits anticipated from the Share Exchange Transaction, or if such benefits are realized more slowly than expected, the market price of our Common Stock could decline.
In addition, if an active trading market for our Common Stock develops and is sustained, the trading price of our Common Stock may be volatile and subject to significant fluctuations in response to a variety of factors, many of which are beyond our control, including our operating results, changes in expectations regarding our business and prospects, developments affecting TEG SPV or the industries in which it operates, general economic and market conditions, and changes in securities analysts’ estimates or recommendations. Any of these factors could have a material adverse effect on the market price of our Common Stock, and stockholders may lose all or a substantial portion of their investment.
Risks Related to Our Securities
Our common stock is currently quoted on the OTC Markets – OTCID Basic Market, which may further restrict the marketability of our shares.
OTC Markets designates OTC Markets issuers based on the quality and quantity of public disclosure available. Our Common Stock is currently quoted on the OTCID Basic Market which is the second to lowest tier of OTC Markets and signifies that while we meet OTC Market’s standards for current information, our Common Stock is not currently qualified for quotation on the higher tiered OTCQB Venture Market or the OTCQX Best Market. Quotation and trading on the OTCID Basic Market may cause investors and broker-dealers to be less willing to transact in our shares, further reducing liquidity and adversely affecting our share price. Although we are attempting to reinstate the quotation of our common stock on the OTCQB, as soon as possible, there can be no assurance that the OTC Markets will approve our application or that we will satisfy all applicable OTCQB requirements. There can be no assurance that we will be able to improve the quotation of our shares of Common Stock to a higher tier, including OTCQB, or gain a listing on Nasdaq or any other national securities exchange.
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The limited public trading market may cause volatility in our stock price.
The quotation of our Common Stock on the OTCID Basic Market does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of smaller companies like us. Our Common Stock is thus and will be subject to significant volatility. Sales of substantial amounts of our Common Stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our Common Stock.
An active and visible trading market for our Common Stock may not develop.
We cannot predict whether an active market for our Common Stock will develop in the future. In the absence of an active trading market:
| ● | investors may have difficulty buying and selling or obtaining market quotations; |
| ● | market visibility for our Common Stock may be limited; and |
| ● | a lack of visibility for our Common Stock may have a depressive effect on the market price for our Common Stock. |
The OTCID Basic Market is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than the Nasdaq Stock Market or the New York Stock Exchange. The trading price of the Common Stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts’ earnings estimates, announcements by us or our competitors, general conditions in the industry in which we operate and other factors. These fluctuations, as well as general economic and market conditions, may have a material adverse effect on the market price of our Common Stock.
Our controlling stockholder may exercise significant influence over us and may be subject to conflicts of interest.
Mr. Jakhongir Abidovich Artikkhodjaev, through TEG Parent, beneficially owns approximately 68.30% of our outstanding Common Stock, and his daughter, Ms. Irodakhon Abduvakhitova, a member of our Board, owns approximately 31.14%. Mr. Artikkhodjaev thus has the power, on his own, to determine the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, approval of equity incentive plans and other significant corporate actions, and such actions may be taken by written consent without a meeting of stockholders. Mr. Artikkhodjaev also has the power to prevent or cause a change in control. In addition, Mr. Artikkhodjaev controls entities that are not part of the Company but are significant counterparties of TEG SPV, including borrowers under loans made by TEG SPV and the borrower under the $100 million facility guaranteed by TEG SPV. His interests may differ from the interests of our other stockholders, which may cause him to be faced with conflicts of interest that may not be resolved in favor of or to the satisfaction of our minority stockholders.
Compliance with changing regulation of corporate governance and public disclosure, and our management’s inexperience with such regulations, will result in additional expenses and creates a risk of non-compliance.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. In addition, our management is located in Uzbekistan and has limited experience with compliance with U.S. laws, including securities laws. This inexperience may cause us to fall out of compliance with applicable regulations, which could adversely affect our business, financial condition and the market price of our Common Stock.
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STWI Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
StageWise Strategies Corp. (the “Company”, “us,” “our,” “we”) is a Nevada-based corporation specializing in search engine optimization (SEO) services that help entrepreneurs and businesses improve their online visibility. Our primary goal is to enhance clients’ search engine rankings through targeted keyword analysis and website optimization strategies.
We aim to generate revenue by offering tailored SEO solutions that support both emerging startups and established companies in attracting organic traffic and expanding their digital reach.
Our primary revenue sources encompass:
Subscription-Based API Tool: Entrepreneurs managing multiple concurrent projects can leverage our subscription-based API tool, offering an expanded query quota. Users subscribe to this tool, paying a recurring fee, granting them access to advanced features and the capability to export acquired keywords for various applications.
Users can access our service through our Company’s website, where they discover comprehensive information on our offerings, pricing plans, and a user-friendly contact interface for plan selection. Revenue is derived from fees associated with platform access.
We offer three-tiered subscription-based monthly plans: Basic, Standard, and Premium. Each plan carries a recurring fee, granting users access to progressively advanced features, higher request allowances, and enhanced functionality. Clients pay for their selected plan, aligning with their specific promotional requirements.
Change of Control
Effective as of June 5, 2026, there was a change of control of the Company. Approximately 74.2% of the Company’s then issued and outstanding shares of Common Stock were acquired by a foreign individual from two of our stockholders. Upon such acquisition, all of the then serving directors and officers of the Company resigned and were replaced by the following officers and directors:
| Name | Position | |
| Elmurod Sopiev | Chief Executive Officer | |
| Temur Zokirov | Chairman of the Board, Chief Financial Officer and Secretary | |
| Bahtiyor Kadirov | Director | |
| Elina Davidyan | Director |
More information on the change of control and the new officers and directors is provided in our Current Report on Form 8-K filed with the SEC on June 11, 2026.
Results of Operations
Three months ended June 30, 2026 compared to June 30, 2025
Revenue
Total revenue for the three months ended June 30, 2026 and 2025 was $11,307 and $8,196, respectively, an increase of $3,111 or 38% between the comparable periods as a result of execution of existing contracts.
Operating expenses
Total expenses for the three months ended June 30, 2026 were $18,790, comprised of office rent $142, office expenses $160, bank service charges $16, depreciation expense $10,114 and professional fees $8,358.
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Total expenses for the three months ended June 30, 2025 were $61,236, comprised of office rent $442, bank service charges $88, dues & subscriptions $30, depreciation expense $9,924, professional fees $22,953, website CRO expenses $9,000, website technical support $3,000, SEO services $4,251, marketing services $8,748 and server lease $2,800.
The decrease in operating expenses of $42,446 or 69%, during the comparable periods mainly reflects a significant decrease in professional fees and absence of website CRO expenses, SEO services, server lease and marketing expenses during the three months ended June 30, 2026.
Net Income (Loss)
For the three months ended June 30, 2026 and 2025, the Company recorded a net loss of $7,483 and $53,040, respectively, a decrease of $45,557 or 86% between the comparable periods. Such a significant decrease was due to 38% increase in revenues and 69% decrease in operating expenses.
Nine months ended June 30, 2026 compared to June 30, 2025
Revenue
Total revenue for the nine months ended June 30, 2026 and 2025 was $55,774 and $77,886, respectively, a decrease of $22,112 or 28% between the comparable periods as a result of execution of existing contracts.
Operating expenses
Total expenses for the nine months ended June 30, 2026 were $68,944, comprised of office rent $353, office expenses $160, bank service charges $24, business licenses and permits $150, depreciation expense $30,344, professional fees $37,836, SEO services $803, marketing services $4,568, server lease $2,707 and website and API expenses $4,000. A refund of $12,000 was also received for website technical support following the termination of the Agreement.
Total expenses for the nine months ended June 30, 2025 were $115,208, comprised of office rent $542, bank service charges $361, dues and subscriptions $30, business licenses and permits $200, depreciation expense $23,692, professional fees $42,452, website CRO expenses $9,000, website technical support $3,000, SEO services $9,919, marketing services $20,412 and server lease $5,600.
The decrease in operating expenses of $46,264 or 40%, during the comparable periods mainly reflects a significant decrease in professional fees, website CRO expenses, SEO services, server lease, marketing expenses and refund of website technical support, offset by increase in depreciation and Website and API expenses.
Net Income (Loss)
The change from $37,322 of net loss for the nine months ended June 30, 2025 to net loss of $13,170 for the same period in 2026, was mainly attributable to decrease in operating expenses in 2026, which was partially offset by decrease in total revenue.
Liquidity and Capital Resources
During the three months ended June 30, 2026 and 2025, the Company incurred operating losses of $7,483 and $53,040, respectively, and during the nine months ended June 30, 2026 and 2025, the Company incurred operating losses of $13,170 and $37,322, respectively, and had an accumulated deficit of $125,534 as of June 30, 2026. Since its inception, the Company has incurred operating losses and negative cash flows. The Company expects to continue to incur net losses as it continues to grow and scale its business. As of June 30, 2026, we had cash and cash equivalents of $44,485.
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Although the Company has had recurring losses each year since inception, the Company plans to fund its operations and capital funding needs for the next 12 months through a combination of private and public equity and debt offerings, or a combination thereof, from existing and/or new investors, including related parties. We have limited financial resources available, which has had an adverse impact on our liquidity, activities and operations. Without realization of additional capital, it would be unlikely for us to continue as a going concern. In order for us to remain a going concern, we will need to obtain additional capital as mentioned above. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is sought. No assurances can be given that any necessary financing can be obtained on terms favorable to us, or at all. See Note 2 to our financial statements included in this Information Statement and the report of the Company’s independent accounting firm included in the Company’s audited financial statements for the fiscal year ended September 30, 2025, which raises substantial doubt about the Company’s ability to continue as a going concern.
Operating Activities
For the nine months ended June 30, 2026, net cash provided by operating activities was $38,301 compared to net cash used in operating activities of $40,845 for the nine months ended June 30, 2025.
Investing Activities
For the nine months ended June 30, 2026 and 2025, net cash used in investing activities was $0 and $82,450, respectively.
Financing Activities
For the nine months ended June 30, 2026 and 2025, net cash provided by financing activities was $1,611, compared to $112,180 for the nine months ended June 30, 2025. Such changes were due to the fact there were no share issuances during the nine months ended June 30, 2026 and only minor proceeds and payments related to the Loan from Related Parties.
Current Financial Condition
As of June 30, 2026, we have generated revenue in the amount of $55,774. The Company issued no shares of common stock during the nine months ended June 30, 2026, although it received a $44,500 deposit toward a $250,000 Share Subscription Agreement on June 30, 2026. Please refer to our financial statements contained herein for more detailed information.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Critical Accounting Policies and Estimates
Refer to Note 3 in the notes accompanying unaudited condensed financial statements.
Fiscal year ended September 30, 2025 compared to fiscal year ended September 30, 2024
During the years ended September 30, 2025 and 2024 we have generated $95,409 and $9,007 in revenues, respectively.
Our net loss for the fiscal year ended September 30, 2025 was $74,758 compared to a net loss of $30,616 during the fiscal year ended September 30, 2024.
Operating expenses incurred were $170,170 during fiscal year ended September 30, 2025 compared to $39,630 during fiscal year ended September 30, 2024.
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Liquidity and Capital Resources
Fiscal year ended September 30, 2025 and 2024
As of September 30, 2025, our total assets were $164,867 consisting of $4,573 current assets, $8,078 other assets and $152,216 intangible assets. As of September 30, 2024 our total assets were $115,744 consisting of $11,343 cash and $104,401 intangible assets.
Operating Activities
For the years ended September 30, 2025 and 2024, net cash used in operating activities was $48,500 and $12,217, respectively.
Investing Activities
For the years ended September 30, 2025 and 2024, net cash used in investing activities was $82,450 and $88,900, respectively.
Financing Activities
For the years ended September 30, 2025 and 2024, net cash provided by financing activities was $124,180 and $111,850, respectively from director’s loan and capital stock.
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 expenditures or capital resources that are material to investors.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANACIAL CONDITION AND RESULTS OF OPERATIONS OF TEG SPV
The following discussion and analysis of our financial condition and results of operations should be read together with our combined financial statements and the related notes included elsewhere in this information statement. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in this information statement. In this section, the “Group.” “we”, “us,” or “our”, refers to TEG SPV and its subsidiaries.
Overview
TEG SPV is a hospitality and exhibition group operating in the Republic of Uzbekistan. TEG SPV operates in the hospitality and exhibition segments, via three core properties including two hotels and one exhibition center:
| ● | Hilton Tashkent, a full-service, five-star hotel in Tashkent operated by ADW under a franchise agreement with the Hilton brand, providing accommodation, food and beverage services, events and ancillary hospitality services; |
| ● | Wyndham Bukhara, a full-service, four-star hotel in Bukhara operated by CLH under a franchise agreement with the Wyndham brand, providing accommodation, food and beverage services, events and ancillary hospitality services; and |
| ● | Central Asian Expo, an exhibition and events venue operated by CAEX, providing rental of exhibition space together with related event organization and support services. |
We generate revenue from the following principal streams: rooms (accommodation), food and beverage, events, and other services such as laundry, spa, gym, parking and the rental of facilities and office space. We manage our business through two reportable segments, Hospitality and Exhibition, which reflect the manner in which our chief operating decision maker evaluates performance and allocates resources.
For the six months ended June 30, 2026, we generated revenue of $17,375 thousand and net income of $3,606 thousand, compared with revenue of $18,525 thousand and net income of $5,152 thousand for the six months ended June 30, 2025. For the fiscal year ended December 31, 2025, we generated revenue of $42,910 thousand and net income of $14,364 thousand, compared with revenue of $35,173 thousand and net income of $4,552 thousand for the fiscal year ended December 31, 2024. As of June 30, 2026, we had total assets of $124,690 thousand and total shareholders’ equity of $85,201 thousand, compared with total assets of $135,158 thousand and total shareholders’ equity of $88,668 thousand as of December 31, 2025.
Reorganization and Basis of Presentation
TEG SPV was established in October 2025 to serve as a holding company. TEG SPV is owned by TEG Parent, the Individual Seller, and Wellmore, each of which is controlled by Mr. Jakhongir Abidovich Artikkhodjaev (the ultimate beneficial owner or “UBO”). During the fourth quarter of 2025, we undertook a legal restructuring to create a unified holding structure, which involved the establishment of TEG SPV together with two new subsidiaries. As part of the restructuring, each of ADW, CLH, and CAEX became a wholly owned subsidiary of TEG SPV.
Our combined financial statements have been prepared to present the financial position, results of operations and cash flows of the aforementioned entities, which are under the common control of the UBO, as if they had operated as a single economic reporting entity for all periods presented, applying consolidation principles by analogy, as no single legal parent entity directly controlled all of the entities included in the Group during 2024 and 2025. All intercompany balances and transactions have been eliminated in full upon combination, and transactions between entities under common control have been reflected at their carrying amounts at the date of transfer, with no step-up to fair value. Accordingly, our combined financial statements do not necessarily represent the financial position, results of operations or cash flows that we would have reported on a stand-alone consolidated legal basis, and they may not be indicative of our future performance following completion of the restructuring and operation of the Group under its current legal structure.
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The functional currency of each entity within the Group is the Uzbek Soum (“UZS”), which reflects the primary economic environment in which each entity generates and expends cash. Our reporting currency is the U.S. Dollar. Assets and liabilities are translated at period-end exchange rates, and income and expenses at average rates for the period, with resulting translation differences recognized in other comprehensive income and accumulated within shareholders’ equity.
Key Factors Affecting Our Results of Operations
Tourism and overall travel demand
Our revenue is substantially derived from hotel room occupancy, food and beverage sales, and events and exhibition activity, each of which is sensitive to inbound and domestic travel demand, regional business activity, and the calendar of conferences, exhibitions and other events hosted in Tashkent and Bukhara.
Hotel demand, occupancy and pricing in our markets
Our hospitality results depend principally on the number of rooms we sell and the rates we achieve. Both are sensitive to the supply of competing hotel rooms in Tashkent and Bukhara, to corporate and group demand, and to broader travel patterns. During the six months ended June 30, 2026, rooms sold at Hilton Tashkent declined to 27,193 from 29,409 in the comparable prior-year period, and occupancy declined to approximately 58% from approximately 63%. Management attributes the decline principally to the entry of new luxury supply in Tashkent, including Swissotel, JW Marriott and Mercure Tashkent North, to aggressive pricing by an existing competitor, and to the cancellation and postponement of corporate projects. We expect competition for rooms and events business in Tashkent to remain intense as additional international-branded supply enters the market.
Seasonality
Our business is seasonal. Demand for accommodation, food and beverage and events services is materially lower in the first quarter than in the balance of the year, particularly in Bukhara, where the first quarter is a low-demand period. Revenue for the three months ended June 30, 2026 represented approximately 65% of revenue for the six months ended June 30, 2026. Because a substantial portion of our operating cost base does not vary with occupancy, our margins compress significantly in low-demand periods and expand in high-demand periods. Results for any interim period are therefore not necessarily indicative of results to be expected for a full year.
Timing of the exhibition calendar
Revenue in our exhibition segment depends on the number, scale and timing of exhibitions and events held at our venue in a given period. The exhibition calendar is not evenly distributed across the year and shifts between periods. A significant number of events held in the first and second quarters of 2025 were scheduled later in 2026, which reduced Exhibition segment revenue for the six months ended June 30, 2026 relative to the comparable prior-year period. Period-over-period comparisons of Exhibition segment revenue are therefore materially affected by calendar timing rather than by underlying demand.
Operating leverage and cost structure
A substantial portion of our cost of sales — including operational payroll, depreciation, royalty expense and utilities — is fixed or semi-fixed over the short term. As a result, changes in revenue have a disproportionate effect on gross profit and operating income. In the six months ended June 30, 2026, revenue declined 6.2% while cost of sales increased 6.8%, and gross margin declined to 38.4% from 45.9%.
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Foreign currency exposure
Substantially all of our revenue and operating costs are denominated in UZS, while our principal borrowings are denominated in U.S. dollars. Movements in the UZS/U.S. Dollar exchange rate therefore affect both the translation of our results into our reporting currency and the remeasurement of foreign-currency monetary balances, which is recognized in net foreign exchange gain or loss. We recorded a net foreign exchange loss of $324 thousand for the six months ended June 30, 2026, compared with a net foreign exchange gain of $688 thousand for the six months ended June 30, 2025, a period-over-period swing of $1,012 thousand. As of June 30, 2026, our net foreign-currency monetary liability position was $26,663 thousand, compared with $32,462 thousand as of December 31, 2025.
Capital structure and financing costs
We have historically funded capital expenditures and working capital needs through a combination of operating cash flow, loans payable to Halyk Bank of Kazakhstan (“HBK”), and capital contributions from and balances with related parties under common control of the UBO.
Taxation
We are subject to Uzbek corporate income tax at a statutory rate of 15%. ADW, the entity that owns and operates Hilton Tashkent, was granted an exemption from all types of taxes, including value-added tax and income tax, under a Presidential Decree issued in 2017 in relation to its construction and operation; that exemption was valid through January 1, 2025. The expiry of the exemption, together with the recognition of deferred taxes, affects the comparability of our effective tax rate across periods.
Concentration risk
We conduct all of our operations in Uzbekistan, and a portion of our revenue and receivables has historically been concentrated with a single customer, SKY EVENTS LLC, which accounted for approximately 12% of our total revenue for the fiscal year ended December 31, 2025.
Components of Our Results of Operations
Revenue
Room (accommodation) revenue relates to the provision of lodging services and is recognized over time, on a daily basis, as rooms are occupied. Where bookings include breakfast, the transaction price is allocated between lodging and breakfast using the residual approach. For non-refundable bookings, revenue is recognized when the stay occurs or when cancellation or no-show rights lapse. Loyalty programs provide customers with a material right, and a portion of the transaction price is therefore deferred and recognized when points are redeemed or expire.
Food and beverage revenue includes restaurant, room service, minibar and bar sales, and is recognized at a point in time when goods are delivered and services are rendered.
Events revenue includes venue rental and related services such as catering, equipment rental and event support services. These services are treated as a single performance obligation, and revenue is recognized over time, typically on a straight-line basis over the event period.
Other services revenue includes laundry, spa, gym and the rental of facilities and office space, and is generally recognized at a point in time when the service is rendered, except for services such as space rental, which are recognized over time as the customer simultaneously receives and consumes the benefits.
Cost of sales
Cost of sales consists of expenses directly associated with providing hospitality services and operating the exhibition center, including labor and related employee benefits for operational staff, food and beverage costs, guest supplies, laundry and cleaning services, depreciation of operating assets, directly attributable taxes, royalty expense payable under our franchise agreements, utilities and other direct expenses. These costs are recognized as incurred.
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Selling, general and administrative expenses
Selling, general and administrative expenses consist of costs not directly attributable to providing hospitality services or operating the exhibition center, including corporate and administrative salaries and related employee benefits, marketing and advertising costs, professional and consultancy fees, office and information technology expenses, insurance and other general overhead. We expect these expenses to increase in absolute terms and as a percentage of revenue following this offering as we incur the costs of operating as a public company, including increased legal, accounting, insurance, investor relations and compliance costs.
Provision for bad debts, net
Provision for bad debts, net represents the net charge recognized in the period in respect of expected credit losses on accounts receivable and notes receivable, measured under the current expected credit loss model.
Other operating expenses, net
Other operating expenses, net consists of items outside the ordinary course of delivering hospitality and exhibition services, including gains and losses on the disposal and write-off of property and equipment, write-offs of receivables and payables, non-recurring charges, and other miscellaneous operating income and expense.
Interest income and interest expense
Interest income consists principally of interest earned on notes receivable and interest-bearing balances due from related parties, together with the unwinding of discounts on those instruments. Interest expense consists principally of interest incurred on our bank borrowings, net of amounts capitalized during construction.
Net foreign exchange gain/(loss)
Net foreign exchange gain or loss reflects the remeasurement into UZS of monetary assets and liabilities denominated in currencies other than each entity’s functional currency, principally U.S. dollar-denominated borrowings and receivables.
Income tax expense
Income tax expense comprises current and deferred income tax. Current tax is measured at the enacted Uzbek statutory rate of 15%. Deferred taxes are recognized on temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases, measured at the rates expected to apply when the differences reverse, with a valuation allowance recorded to the extent realization is not more likely than not.
Results of Operations
Amounts are presented as reported in the combined statements of operations, with expenses shown in parentheses. The change columns present the arithmetic movement in each line item; accordingly, an increase in an expense is shown as a negative change.
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Comparison of the Three Months Ended June 30, 2026 and 2025
The following table sets forth our combined results of operations for the periods indicated:
| (in thousands) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Revenue | 11,246 | 12,769 | (1,523 | ) | (11.9 | )% | ||||||||||
| Cost of sales | (5,973 | ) | (5,585 | ) | (388 | ) | (6.9 | )% | ||||||||
| Gross profit | 5,273 | 7,184 | (1,911 | ) | (26.6 | )% | ||||||||||
| Selling, general and administrative expenses | (1,063 | ) | (869 | ) | (194 | ) | (22.3 | )% | ||||||||
| Provision for bad debts, net | (186 | ) | (44 | ) | (142 | ) | n/m | |||||||||
| Other operating expenses, net | (233 | ) | (583 | ) | 350 | 60.0 | % | |||||||||
| Operating income | 3,791 | 5,688 | (1,897 | ) | (33.3 | )% | ||||||||||
| Interest income | 562 | 350 | 212 | 60.6 | % | |||||||||||
| Interest expense | (540 | ) | (741 | ) | 201 | 27.1 | % | |||||||||
| Other expenses, net | — | 22 | (22 | ) | n/m | |||||||||||
| Net foreign exchange gain/(loss) | 312 | 691 | (379 | ) | (54.8 | )% | ||||||||||
| Income before income taxes | 4,125 | 6,010 | (1,885 | ) | (31.4 | )% | ||||||||||
| Income tax expense | (946 | ) | (1,012 | ) | 66 | 6.5 | % | |||||||||
| Net income | 3,179 | 4,998 | (1,819 | ) | (36.4 | )% | ||||||||||
| Other comprehensive income/(loss), net of tax — currency translation difference | 1,657 | 1,657 | — | n/m | ||||||||||||
| Comprehensive income | 4,836 | 6,655 | (1,819 | ) | (27.3 | )% | ||||||||||
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Revenue
Revenue decreased by $1,523 thousand, or 11.9%, to $11,246 thousand for the three months ended June 30, 2026 from $12,769 thousand for the three months ended June 30, 2025. The following table disaggregates revenue by major revenue stream:
| (in thousands) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Room (accommodation) | 5,237 | 6,407 | (1,170 | ) | (18.3 | )% | ||||||||||
| Events | 4,332 | 4,524 | (192 | ) | (4.2 | )% | ||||||||||
| Food, beverage and other | 1,677 | 1,838 | (161 | ) | (8.8 | )% | ||||||||||
| Total revenue | 11,246 | 12,769 | (1,523 | ) | (11.9 | )% | ||||||||||
Room revenue decreased by $1,170 thousand, or 18.3%, and was the principal driver of the decline in total revenue for the quarter. At Hilton Tashkent, rooms sold declined to 14,400 from 17,295 and occupancy declined to approximately 61% from approximately 74%, reducing hotel services revenue by approximately 23%. Management attributes the decline to the entry of new luxury supply in Tashkent, to aggressive pricing by an existing competitor and to the cancellation and postponement of corporate projects. Wyndham Bukhara partially offset this, growing revenue on a 20% increase in average daily rate that more than offset a decline in occupancy.
Events revenue decreased by $192 thousand, or 4.2%. Banquet revenue at Hilton Tashkent increased notwithstanding a reduction in Grand Ballroom and conference room days sold, indicating a more favorable event mix and higher average checks, and the quarter included the first revenue from the Solara Pool, which commenced operations on June 6, 2026. This was more than offset by a decline in Exhibition segment revenue, which reflects the rescheduling of exhibitions held in the second quarter of 2025 into the second half of 2026.
Food, beverage and other revenue decreased by $161 thousand, or 8.8%, principally reflecting lower restaurant volumes at Hilton Tashkent, consistent with the decline in occupancy and reduced corporate activity.
Cost of sales and gross profit
Cost of sales increased by $388 thousand, or 6.9%, to $5,973 thousand for the three months ended June 30, 2026 from $5,585 thousand for the three months ended June 30, 2025, notwithstanding the 11.9% decline in revenue. As a percentage of revenue, cost of sales increased to 53.1% from 43.7%. Operating supplies and consumables increased by $171 thousand, or 13.8%, other cost of sales by $224 thousand, or 30.5%, and utilities by $83 thousand, or 25.7%, partly offset by a $107 thousand, or 19.3%, reduction in taxes other than income tax and a $55 thousand, or 14.7%, reduction in royalty expense. In the Exhibition segment, cost of sales increased as operating and event costs were incurred in the quarter in respect of exhibitions scheduled for later in 2026. Cost of sales at Wyndham Bukhara declined over the quarter.
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As a result, gross profit decreased by $1,911 thousand, or 26.6%, to $5,273 thousand, and gross margin declined to 46.9% from 56.3%, a decline of 9.4 percentage points. The decline reflects revenue falling against a substantially fixed cost base, together with the effect of the reallocation of employees from administrative to operational departments effective January 1, 2026, for which the comparative period has not been restated.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $194 thousand, or 22.3%, to $1,063 thousand for the three months ended June 30, 2026 from $869 thousand for the three months ended June 30, 2025, and increased as a percentage of revenue to 9.5% from 6.8%. Employee compensation and benefits increased by $247 thousand to $580 thousand and was the principal driver, while other taxes fell to nil from $99 thousand. Management attributes the increase principally to higher employee salary costs at Wyndham Bukhara, together with higher administrative salaries in the Exhibition segment and $13 thousand of holding-company costs at TEG SPV for which there is no prior-period comparative. Selling, general and administrative expenses at Hilton Tashkent were broadly flat, as lower payroll and consulting costs offset higher materials and other employee costs, and advertising was stable year over year as lower franchise charges offset higher spend with other providers.
Provision for bad debts
Provision for bad debts, net increased by $142 thousand to $186 thousand for the three months ended June 30, 2026 from $44 thousand for the three months ended June 30, 2025. The charge is heavily weighted to the second quarter, as the combined charge for the six months ended June 30, 2026 was $175 thousand, and arose principally at Hilton Tashkent.
Other operating expenses
Other operating expenses, net decreased by $350 thousand, or 60.0%, to $233 thousand for the three months ended June 30, 2026 from $583 thousand for the three months ended June 30, 2025. The decrease reflects the non-recurrence of charges recorded in the Exhibition segment in the prior-year quarter, partially offset by an increase at Hilton Tashkent, which recorded a loss of approximately $145 thousand on the demolition and write-off of part of the Tumbler restaurant structure in connection with the construction of the Solara Pool.
Operating income
Operating income decreased by $1,897 thousand, or 33.3%, to $3,791 thousand for the three months ended June 30, 2026 from $5,688 thousand for the three months ended June 30, 2025, and operating margin declined to 33.7% from 44.5%. The $1,911 thousand contraction in gross profit and the $194 thousand increase in selling, general and administrative expenses were only partly offset by the $350 thousand reduction in other operating expenses, net.
Non-operating items and income taxes
Interest income increased by $212 thousand, or 60.6%, to $562 thousand, arising entirely at Hilton Tashkent on loans issued to related parties. Interest expense decreased by $201 thousand, or 27.1%, to $540 thousand, consistent with the reduction in the outstanding principal balance of our bank facility. We recorded a net foreign exchange gain of $312 thousand for the three months ended June 30, 2026, compared with a gain of $691 thousand for the three months ended June 30, 2025, a reduction of $379 thousand, as gross exchange gains declined and gross exchange losses increased. Other expenses, net was nil for the three months ended June 30, 2026, compared with net other income of $22 thousand for the three months ended June 30, 2025.
Income tax expense decreased by $66 thousand, or 6.5%, to $946 thousand, far less than the 31.4% decline in income before income taxes, lifting our effective tax rate to 22.9% from 16.8%.
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Net income and comprehensive income
Net income decreased by $1,819 thousand, or 36.4%, to $3,179 thousand for the three months ended June 30, 2026 from $4,998 thousand for the three months ended June 30, 2025. As with the six-month period, the decline in operating income was partially cushioned by higher non-operating related-party interest income and lower interest expense.
We recognized other comprehensive income of $1,657 thousand and $1,657 thousand for the three months ended June 30, 2026 and 2025, respectively, in each case consisting solely of the currency translation difference arising on translation of our operations from the Uzbek Soum into our U.S. Dollar reporting currency. Comprehensive income accordingly decreased by $1,819 thousand, or 27.3%, to $4,836 thousand from $6,655 thousand. Because the translation difference is driven by movements in the UZS/U.S. Dollar exchange rate rather than by operating performance, comprehensive income is materially more volatile than net income between periods.
Our results are materially seasonal, and the second quarter is our strongest interim period. Revenue for the three months ended June 30, 2026 represented approximately 65% of revenue for the six months then ended, and net income for the quarter of $3,179 thousand represented approximately 88% of net income for the six-month period, reflecting the substantially fixed cost base carried through the low-demand first quarter. The effect is more pronounced on a comprehensive income basis: comprehensive income of $4,836 thousand for the quarter exceeded comprehensive income of $3,387 thousand for the six-month period, because the currency translation difference recognized in the first quarter was a loss of $1,876 thousand against a gain of $1,657 thousand in the second quarter. Results for the three months ended June 30, 2026 are therefore not indicative of results to be expected for any other quarter or for the full year.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table sets forth our combined results of operations for the periods indicated:
| (in thousands) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Revenue | 17,375 | 18,525 | (1,150 | ) | (6.2 | )% | ||||||||||
| Cost of sales | (10,706 | ) | (10,026 | ) | (680 | ) | (6.8 | )% | ||||||||
| Gross profit | 6,669 | 8,499 | (1,830 | ) | (21.5 | )% | ||||||||||
| Selling, general and administrative expenses | (1,942 | ) | (1,416 | ) | (526 | ) | (37.1 | )% | ||||||||
| Provision for bad debts, net | (175 | ) | (94 | ) | (81 | ) | (86.2 | )% | ||||||||
| Other operating expenses, net | (458 | ) | (661 | ) | 203 | 30.7 | % | |||||||||
| Operating income | 4,094 | 6,328 | (2,234 | ) | (35.3 | )% | ||||||||||
| Interest income | 2,391 | 678 | 1,713 | 252.7 | % | |||||||||||
| Interest expense | (1,229 | ) | (1,515 | ) | 286 | 18.9 | % | |||||||||
| Other expenses, net | — | 22 | (22 | ) | n/m | |||||||||||
| Net foreign exchange gain/(loss) | (324 | ) | 688 | (1,012 | ) | n/m | ||||||||||
| Income before income taxes | 4,932 | 6,201 | (1,269 | ) | (20.5 | )% | ||||||||||
| Income tax expense | (1,326 | ) | (1,049 | ) | (277 | ) | (26.4 | )% | ||||||||
| Net income | 3,606 | 5,152 | (1,546 | ) | (30.0 | )% | ||||||||||
| Other comprehensive income/(loss), net of tax — currency translation difference | (219 | ) | 1,719 | (1,931 | ) | n/m | ||||||||||
| Comprehensive income | 3,387 | 6,871 | (3,484 | ) | (50.7 | )% | ||||||||||
Revenue
Revenue decreased by $1,150 thousand, or 6.2%, to $17,375 thousand for the six months ended June 30, 2026 from $18,525 thousand for the six months ended June 30, 2025. The following table disaggregates revenue by major revenue stream:
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| (in thousands) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Room (accommodation) | 8,239 | 8,791 | (552 | ) | (6.3 | )% | ||||||||||
| Events | 6,186 | 5,875 | 311 | 5.3 | % | |||||||||||
| Food, beverage and other | 2,950 | 3,859 | (909 | ) | (23.6 | )% | ||||||||||
| Total revenue | 17,375 | 18,525 | (1,150 | ) | (6.2 | )% | ||||||||||
Room revenue decreased by $552 thousand, or 6.3%, reflecting lower occupancy at Hilton Tashkent, where occupancy declined to approximately 58% from approximately 63% and rooms sold declined to 27,193 from 29,409, principally as a result of new competing luxury supply in Tashkent, aggressive pricing by an existing competitor and the cancellation and postponement of corporate projects. The decline was partially offset at Wyndham Bukhara, where average daily rate increased period over period, more than offsetting a decline in rooms sold.
Events revenue increased by $311 thousand, or 5.3%. Banquet and catering activity at Hilton Tashkent increased, assisted by a single catering engagement in Samarkand that contributed approximately $1,585 thousand of revenue in the period and that we do not expect to recur. This increase was substantially offset by lower Exhibition segment revenue, which declined as a result of the rescheduling of exhibitions from the first half of the year into the second half of 2026.
Food, beverage and other revenue decreased by $909 thousand, or 23.6%, principally reflecting lower restaurant volumes at Hilton Tashkent, consistent with the decline in occupancy and reduced corporate activity.
Cost of sales and gross profit
Cost of sales increased by $680 thousand, or 6.8%, to $10,706 thousand for the six months ended June 30, 2026 from $10,026 thousand for the six months ended June 30, 2025, notwithstanding the 6.2% decline in revenue. As a percentage of revenue, cost of sales increased to 61.6% from 54.1%. The following table sets forth the components of cost of sales:
| (in thousands) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Employee compensation and benefits | 2,790 | 2,626 | 164 | 6.2 | % | |||||||||||
| Operating supplies and consumables | 2,268 | 2,037 | 231 | 11.3 | % | |||||||||||
| Depreciation expense | 2,074 | 2,088 | (14 | ) | (0.7 | )% | ||||||||||
| Taxes other than income tax | 843 | 1,210 | (367 | ) | (30.3 | )% | ||||||||||
| Royalty expense | 535 | 547 | (12 | ) | (2.2 | )% | ||||||||||
| Utilities expense | 657 | 484 | 173 | 35.7 | % | |||||||||||
| Other | 1,539 | 1,034 | 505 | 48.8 | % | |||||||||||
| Total cost of sales | 10,706 | 10,026 | 680 | 6.8 | % | |||||||||||
The increase was concentrated in other cost of sales, which rose by $505 thousand, or 48.8%, operating supplies and consumables, which rose by $231 thousand, or 11.3%, and utilities, which rose by $173 thousand, or 35.7%. Employee compensation and benefits increased by $164 thousand or 6.2%, reflecting in part the reallocation of employees from administrative to operational departments effective January 1, 2026, for which the comparative period has not been restated. These increases were partly offset by a $367 thousand, or 30.3%, reduction in taxes other than income tax. Management attributes the increase in operating supplies principally to an approximately 10% rise in average food procurement costs at Hilton Tashkent, and part of the increase in other cost of sales to hoteling works and services incurred in connection with the Samarkand catering engagement and related personnel support; cost of sales at Wyndham Bukhara declined over the period.
As a result, gross profit decreased by $1,830 thousand, or 21.5%, to $6,669 thousand, and gross margin declined to 38.4% from 45.9%. The decline reflects the combination of lower revenue against a substantially fixed cost base and the effect of the payroll reallocation described above, for which the comparative period has not been restated.
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Selling, general and administrative expenses
Selling, general and administrative expenses increased by $526 thousand, or 37.1%, to $1,942 thousand for the six months ended June 30, 2026 from $1,416 thousand for the six months ended June 30, 2025, and increased as a percentage of revenue to 11.2% from 7.6%. The following table sets forth the components:
| (in thousands) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Employee compensation and benefits | 1,000 | 624 | 376 | 60.3 | % | |||||||||||
| Advertising expenses | 475 | 351 | 124 | 35.3 | % | |||||||||||
| Other taxes | — | 145 | (145 | ) | n/m | |||||||||||
| Depreciation expense | 4 | 19 | (15 | ) | (78.9 | )% | ||||||||||
| Other | 463 | 277 | 186 | 67.1 | % | |||||||||||
| Total selling, general and administrative expenses | 1,942 | 1,416 | 526 | 37.1 | % | |||||||||||
Employee compensation and benefits increased by $376 thousand, or 60.3%, and was the principal driver of the increase. Other selling, general and administrative expenses increased by $186 thousand, or 67.1%, and advertising expenses by $124 thousand, or 35.3%. These increases were partly offset by the absence of other taxes in the current period against $145 thousand in the prior-year period. Management attributes the overall increase to higher salary costs and the write-off of receivables at Wyndham Bukhara, to holding-company costs of $130 thousand incurred at TEG SPV for which there is no prior-period comparative, and to higher advertising and bank service costs at Hilton Tashkent, partially offset by lower administrative payroll at Hilton Tashkent following the reallocation of employees into operational departments.
Provision for bad debts, net
Provision for bad debts, net increased by $81 thousand, or 86.2%, to $175 thousand for the six months ended June 30, 2026 from $94 thousand for the six months ended June 30, 2025. The increase arose principally at Hilton Tashkent and is consistent with the growth in accounts receivable balances during the period.
Other operating expenses, net
Other operating expenses, net decreased by $203 thousand, or 30.7%, to $458 thousand for the six months ended June 30, 2026 from $661 thousand for the six months ended June 30, 2025. The decrease reflects the non-recurrence of charges recorded in the Exhibition segment in the prior-year period, partially offset by an increase at Hilton Tashkent, which recorded a loss of approximately $145 thousand on the demolition and write-off of part of the Tumbler restaurant structure in connection with the construction of the Solara Pool, together with the write-off of damaged and obsolete assets.
Operating income
Operating income decreased by $2,234 thousand, or 35.3%, to $4,094 thousand for the six months ended June 30, 2026 from $6,328 thousand for the six months ended June 30, 2025, and operating margin declined to 23.6% from 34.2%. The decline is attributable principally to Hilton Tashkent, reflecting the $1,830 thousand contraction in gross profit and the $526 thousand increase in selling, general and administrative expenses, partially offset by the $203 thousand reduction in other operating expenses, net.
Interest income
Interest income increased by $1,713 thousand, or 252.7%, to $2,391 thousand for the six months ended June 30, 2026 from $678 thousand for the six months ended June 30, 2025. The increase arose entirely at Hilton Tashkent and reflects higher interest on loans issued to related parties, principally Aurum Global Group FE LLC and ADW-International Congress Hall LLC, together with related changes in the carrying values of those instruments and the unwinding of discounts. Approximately 76% of interest income for the six-month period was recognized in the first quarter, reflecting adjustments to the carrying values of loans issued and the segregation of the non-current portion in that quarter.
Interest expense
Interest expense decreased by $286 thousand, or 18.9%, to $1,229 thousand for the six months ended June 30, 2026 from $1,515 thousand for the six months ended June 30, 2025, reflecting the reduction in the outstanding principal balance of our bank facility in accordance with its amortization schedule.
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Net foreign exchange gain/(loss)
We recorded a net foreign exchange loss of $324 thousand for the six months ended June 30, 2026, compared with a net foreign exchange gain of $688 thousand for the six months ended June 30, 2025, a period-over-period swing of $1,012 thousand. The change principally reflects appreciation of the Uzbek Soum against the U.S. Dollar and the resulting remeasurement of our net U.S. Dollar-denominated monetary liability position.
Income tax expense
Income tax expense increased by $277 thousand, or 26.4%, to $1,326 thousand for the six months ended June 30, 2026 from $1,049 thousand for the six months ended June 30, 2025, notwithstanding a 20.5% decline in income before income taxes. Our effective tax rate increased to 26.9% from 16.9%. The prior-period rate was reduced by deferred tax movements, while the current period reflects the recognition of a deferred tax liability at Hilton Tashkent, partially offset by the recognition of a deferred tax asset in the Exhibition segment.
Net income and comprehensive income
Net income decreased by $1,546 thousand, or 30.0%, to $3,606 thousand for the six months ended June 30, 2026 from $5,152 thousand for the six months ended June 30, 2025. The decline in net income is smaller than the decline in operating income because operating performance was partially offset by the $1,713 thousand increase in non-operating related-party interest income and the $286 thousand reduction in interest expense. Excluding those items, the deterioration in underlying trading performance was materially greater than the headline movement in net income suggests.
We recognized an other comprehensive loss of $219 thousand for the six months ended June 30, 2026, compared with other comprehensive income of $1,719 thousand for the six months ended June 30, 2025, in each case consisting solely of the currency translation difference arising on translation of our operations from the Uzbek Soum into our U.S. Dollar reporting currency. Comprehensive income accordingly decreased by $3,484 thousand, or 50.7%, to $3,387 thousand from $6,871 thousand — a decline materially steeper than the 30.0% decline in net income. The currency translation difference is recognized in other comprehensive income and accumulated within shareholders’ equity, and the $219 thousand loss recognized in the period corresponds to the movement in the currency translation adjustment within equity from $1,321 thousand at December 31, 2025 to $1,102 thousand at June 30, 2026.
Comparison of the Fiscal Years Ended December 31, 2025 and 2024
The following table sets forth our combined results of operations for the periods indicated:
| (in thousands) | Fiscal Year Ended December 31, 2025 | Fiscal Year Ended December 31, 2024 | $ Change | % Change | ||||||||||||
| Revenue | 42,910 | 35,173 | 7,737 | 22.0 | % | |||||||||||
| Cost of sales | (20,807 | ) | (18,117 | ) | (2,690 | ) | (14.8 | )% | ||||||||
| Gross profit | 22,103 | 17,056 | 5,047 | 29.6 | % | |||||||||||
| Selling, general and administrative expenses | (3,055 | ) | (3,338 | ) | 283 | 8.5 | % | |||||||||
| Provision for bad debts, net | (369 | ) | (4 | ) | (365 | ) | n/m | |||||||||
| Loss on classification as held for sale | — | (1,340 | ) | 1,340 | n/m | |||||||||||
| Other operating expenses, net | (1,232 | ) | (1,005 | ) | (227 | ) | (22.6 | )% | ||||||||
| Operating income | 17,447 | 11,369 | 6,078 | 53.5 | % | |||||||||||
| Interest income | 998 | 274 | 724 | 264.2 | % | |||||||||||
| Interest expense | (2,928 | ) | (3,134 | ) | 206 | 6.6 | % | |||||||||
| Other expenses, net | (1,086 | ) | (724 | ) | (362 | ) | (50.0 | )% | ||||||||
| Net foreign exchange gain/(loss) | 2,434 | (2,034 | ) | 4,468 | n/m | |||||||||||
| Income before income taxes | 16,865 | 5,751 | 11,114 | 193.3 | % | |||||||||||
| Income tax expense | (2,501 | ) | (1,199 | ) | (1,302 | ) | (108.6 | )% | ||||||||
| Net income | 14,364 | 4,552 | 9,812 | 215.6 | % | |||||||||||
| Other comprehensive income/(loss), net of tax — currency translation difference | 6,055 | (3,554 | ) | 9,609 | n/m | |||||||||||
| Comprehensive income | 20,419 | 998 | 19,421 | n/m | ||||||||||||
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Revenue
Revenue increased by $7,737 thousand, or 22.0%, to $42,910 thousand for the fiscal year ended December 31, 2025 from $35,173 thousand for the fiscal year ended December 31, 2024. The following table disaggregates revenue by major revenue stream:
| (in thousands) | Fiscal Year Ended December 31, 2025 | Fiscal Year Ended December 31, 2024 | $ Change | % Change | ||||||||||||
| Rooms revenues | 18,368 | 18,949 | (581 | ) | (3.1 | )% | ||||||||||
| Food and beverage revenues | 16,164 | 11,981 | 4,183 | 34.9 | % | |||||||||||
| Events and other revenue | 8,378 | 4,243 | 4,135 | 97.5 | % | |||||||||||
| Total revenue | 42,910 | 35,173 | 7,737 | 22.0 | % | |||||||||||
The increase was driven by food and beverage revenue, which increased by $4,183 thousand, or 34.9%, and by events and other revenue, which increased by $4,135 thousand, or 97.5%, reflecting substantially higher activity at our exhibition center, where segment revenue increased to $7,022 thousand from $2,885 thousand. Rooms revenue declined modestly, by $581 thousand, or 3.1%, reflecting the increasingly competitive Tashkent hotel market.
Cost of sales and gross profit
Cost of sales increased by $2,690 thousand, or 14.8%, to $20,807 thousand for the fiscal year ended December 31, 2025 from $18,117 thousand for the fiscal year ended December 31, 2024, growing more slowly than revenue. As a percentage of revenue, cost of sales declined to 48.5% from 51.5%, and gross margin improved to 51.5% from 48.5%. The following table sets forth the components of cost of sales:
| (in thousands) | Fiscal Year Ended December 31, 2025 | Fiscal Year Ended December 31, 2024 | $ Change | % Change | ||||||||||||
| Employee compensation and benefits | 6,006 | 5,150 | 856 | 16.6 | % | |||||||||||
| Operating supplies and consumables | 4,891 | 4,731 | 160 | 3.4 | % | |||||||||||
| Depreciation expense | 3,870 | 3,510 | 360 | 10.3 | % | |||||||||||
| Taxes other than income tax | 2,140 | 1,019 | 1,121 | 110.0 | % | |||||||||||
| Royalty expense | 1,382 | 1,133 | 249 | 22.0 | % | |||||||||||
| Utilities expense | 1,099 | 1,179 | (80 | ) | (6.8 | )% | ||||||||||
| Other | 1,419 | 1,395 | 24 | 1.7 | % | |||||||||||
| Total cost of sales | 20,807 | 18,117 | 2,690 | 14.8 | % | |||||||||||
The increase in taxes other than income tax of $1,121 thousand, or 110.0%, principally reflects the expiry on January 1, 2025 of the tax exemption previously available to Hilton Tashkent. Employee compensation and benefits increased by $856 thousand, or 16.6%, and royalty expense increased by $249 thousand, or 22.0%, in line with higher activity levels.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased by $283 thousand, or 8.5%, to $3,055 thousand for the fiscal year ended December 31, 2025 from $3,338 thousand for the fiscal year ended December 31, 2024, and declined as a percentage of revenue to 7.1% from 9.5%. The following table sets forth the components:
| (in thousands) | Fiscal Year Ended December 31, 2025 | Fiscal Year Ended December 31, 2024 | $ Change | % Change | ||||||||||||
| Employee compensation and benefits | 1,398 | 1,213 | 185 | 15.3 | % | |||||||||||
| Advertising expense | 820 | 1,052 | (232 | ) | (22.1 | )% | ||||||||||
| Other taxes | 246 | 248 | (2 | ) | (0.8 | )% | ||||||||||
| Depreciation expense | 39 | 36 | 3 | 8.3 | % | |||||||||||
| Other | 552 | 789 | (237 | ) | (30.0 | )% | ||||||||||
| Total selling, general and administrative expenses | 3,055 | 3,338 | (283 | ) | (8.5 | )% | ||||||||||
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Other operating items
Provision for bad debts, net increased to $369 thousand for the fiscal year ended December 31, 2025 from $4 thousand for the fiscal year ended December 31, 2024, reflecting growth in receivable balances. In 2024 we recognized a loss on classification as held for sale of $1,340 thousand in respect of our administrative building (the “AKFA Office”), the carrying amount of which was written down from $18,142 thousand to its fair value less costs to sell of $16,802 thousand; the sale was completed in March 2025 and no comparable charge arose in 2025. Other operating expenses, net increased by $227 thousand, or 22.6%, to $1,232 thousand.
Operating income
Operating income increased by $6,078 thousand, or 53.5%, to $17,447 thousand for the fiscal year ended December 31, 2025 from $11,369 thousand for the fiscal year ended December 31, 2024, and operating margin improved to 40.7% from 32.3%, reflecting revenue growth of 22.0% against a slower increase in cost of sales, lower selling, general and administrative expenses and the non-recurrence of the 2024 held-for-sale charge.
Non-operating items and income taxes
Interest income increased by $724 thousand to $998 thousand, reflecting growth in interest-bearing notes and related-party receivables. Interest expense decreased by $206 thousand, or 6.6%, to $2,928 thousand, reflecting the reduction in outstanding borrowings to $35,186 thousand from $39,246 thousand. We recorded a net foreign exchange gain of $2,434 thousand in 2025 compared with a net foreign exchange loss of $2,034 thousand in 2024, a swing of $4,468 thousand, reflecting movements in the UZS/U.S. Dollar exchange rate applied to our net U.S. Dollar-denominated monetary liability position. Other expenses, net increased by $362 thousand to $1,086 thousand.
Income tax expense increased by $1,302 thousand, or 108.6%, to $2,501 thousand, comprising current tax expense of $1,970 thousand and deferred tax expense of $531 thousand, compared with current tax expense of $1,374 thousand and a deferred tax benefit of $175 thousand in 2024. Our effective tax rate declined to 14.8% from 20.8%, principally because non-deductible expenses represented a smaller proportion of a substantially larger pre-tax income base.
Net income and comprehensive income
Net income increased by $9,812 thousand, or 215.6%, to $14,364 thousand for the fiscal year ended December 31, 2025 from $4,552 thousand for the fiscal year ended December 31, 2024. Comprehensive income increased to $20,419 thousand from $998 thousand, reflecting a currency translation gain of $6,055 thousand in 2025 compared with a currency translation loss of $3,554 thousand in 2024.
Segment Results
We manage our business through two reportable segments. The Hospitality segment comprises the operation of our two hotel properties and the provision of related accommodation and guest services, and generates revenue from all our revenue streams. The Exhibition segment comprises the operation of our exhibition center and generates revenue from events and related services. Segment results are presented on the basis used by our chief operating decision maker and are reconciled to combined amounts prepared in accordance with GAAP in Note 5 to our condensed combined financial statements. Because that reconciliation is presented to segment net income, we discuss revenue and net income by segment below.
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
| (in thousands) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Revenue | ||||||||||||||||
| Hospitality | 9,927 | 10,682 | (755 | ) | (7.1 | )% | ||||||||||
| Exhibition | 1,318 | 2,087 | (769 | ) | (36.8 | )% | ||||||||||
| Total revenue | 11,246 | 12,769 | (1,523 | ) | (11.9 | )% | ||||||||||
| Net income | ||||||||||||||||
| Hospitality | 2,986 | 4,462 | (1,476 | ) | (33.1 | )% | ||||||||||
| Exhibition | 191 | 536 | (345 | ) | (64.4 | )% | ||||||||||
| Total net income | 3,179 | 4,998 | (1,819 | ) | (36.4 | )% | ||||||||||
Hospitality segment revenue decreased by $755 thousand, or 7.1%, and segment net income decreased by $1,476 thousand, or 33.1%. The decline was concentrated at Hilton Tashkent, where revenue decreased by $838 thousand, or 9.0%, as rooms sold fell to 14,400 from 17,295 and occupancy fell to approximately 61% from approximately 74%, while cost of sales increased by $327 thousand, or 8.2%. Wyndham Bukhara grew revenue by $84 thousand, or 6.2%, to $1,437 thousand on a 20% increase in average daily rate. Holding-company costs incurred at TEG SPV, which was established in October 2025 and therefore has no comparative in the prior-year quarter, are included within the Hospitality segment result.
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Exhibition segment revenue decreased by $769 thousand, or 36.8%, and segment net income decreased by $345 thousand, or 64.4%. The revenue decline is a matter of calendar timing rather than underlying demand: a significant number of events were held in April, May and June 2025, whereas the corresponding 2026 exhibitions fall in June, July and September. Segment cost of sales nevertheless increased in the quarter, reflecting operating and event costs incurred in respect of exhibitions scheduled for later in 2026, which compressed segment margin. We expect the timing effect on revenue to reverse in the second half of 2026.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
| (in thousands) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change | ||||||||||||
| Revenue | ||||||||||||||||
| Hospitality | 14,791 | 15,737 | (946 | ) | (6.0 | )% | ||||||||||
| Exhibition | 2,584 | 2,788 | (204 | ) | (7.3 | )% | ||||||||||
| Total revenue | 17,375 | 18,525 | (1,150 | ) | (6.2 | )% | ||||||||||
| Net income | ||||||||||||||||
| Hospitality | 2,841 | 4,678 | (1,837 | ) | (39.3 | )% | ||||||||||
| Exhibition | 765 | 474 | 291 | 61.4 | % | |||||||||||
| Total net income | 3,606 | 5,152 | (1,546 | ) | (30.0 | )% | ||||||||||
Hospitality segment revenue decreased by $946 thousand, or 6.0%, and segment net income decreased by $1,837 thousand, or 39.3%. The decline was concentrated at Hilton Tashkent, where revenue decreased by $998 thousand, or 7.2%, on lower occupancy and a 31.5% decline in restaurant revenue, while cost of sales increased by $925 thousand, or 13.4%. Wyndham Bukhara grew revenue by $52 thousand, or 2.9%, on higher average daily rate, and improved its gross margin to 23.2% from 8.7%, but the improvement was absorbed by an increase in its selling, general and administrative expenses to $406 thousand from $203 thousand, arising from higher salary costs and the write-off of receivables. Holding-company costs of $130 thousand incurred at TEG SPV, which was established in October 2025 and therefore has no comparative in the prior-year period, are included within the Hospitality segment result.
Exhibition segment revenue decreased by $204 thousand, or 7.3%, reflecting the rescheduling of exhibitions from the first half of the year into the second half of 2026. Segment net income nevertheless increased by $291 thousand, or 61.4%, principally because non-recurring charges recorded in the prior-year period did not repeat. As of June 30, 2026, the Exhibition segment carried contract liabilities in respect of exhibitions scheduled for later in 2026.
Fiscal Year Ended December 31, 2025 Compared with Year Ended December 31, 2024
For the fiscal year ended December 31, 2025, the hospitality segment contributed $12,220 thousand of combined net income and the Exhibition segment contributed $2,144 thousand, compared with $5,033 thousand and a loss of $481 thousand, respectively, for the fiscal year ended December 31, 2024. Hospitality segment revenue increased to $35,913 thousand from $35,011 thousand, while Exhibition segment revenue increased to $7,022 thousand from $2,885 thousand, reflecting a substantially fuller exhibition calendar in 2025. Segment results are presented on the basis used by our chief operating decision maker and are reconciled to combined amounts prepared in accordance with GAAP in Note 5 to our combined financial statements. Segment revenue above is presented on that basis and totaled $42,935 in 2025 and $37,896 in 2024, compared with combined revenue determined in accordance with GAAP of $42,910 and $35,173, respectively; the differences of $25 and $2,723 are GAAP adjustments that are not allocated to segments. Segment net income above is stated after those adjustments and is therefore presented on a GAAP basis.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity have historically been cash generated from operating activities, collections on notes receivable and related-party receivables, proceeds from asset disposals and borrowings under our bank facility. Our principal uses of cash have been the repayment of borrowings, distributions to our owner, capital expenditures on our properties and the origination of loans to related parties.
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As of June 30, 2026, we had cash and cash equivalents of $883 thousand, compared with $1,718 thousand as of December 31, 2025. Working capital — total current assets less total current liabilities — was $5,568 thousand as of June 30, 2026, compared with $13,766 thousand as of December 31, 2025, and our current ratio declined to 1.24 from 1.53. The reduction principally reflects the collection and redeployment of related-party and notes receivable balances during the period, the proceeds of which were applied to repay borrowings and to fund distributions to our owner.
We believe that our existing cash and cash equivalents, and cash generated from operating activities will be sufficient to meet our anticipated cash requirements for at least the next twelve months. Our future capital requirements will depend on many factors, including the pace of our capital expenditure program, our ability to collect amounts due from related parties on their contractual terms, the seasonality of our operating cash flows and the amortization profile of our indebtedness. We may in the future seek additional debt or equity financing, which may not be available on terms acceptable to us or at all.
Operating activities
Net cash provided by operating activities was $8,025 thousand for the six months ended June 30, 2026, compared with $4,578 thousand for the six months ended June 30, 2025. The increase of $3,447 thousand was achieved despite a $1,546 thousand decline in net income and reflects a favorable swing in working capital, principally a $998 thousand source of cash from accounts receivable in 2026 compared with a $1,721 thousand use of cash in 2025, and a $508 thousand source of cash from prepaid expenses and other current assets in 2026 compared with a $2,767 thousand use of cash in 2025. Non-cash adjustments in the 2026 period included depreciation of $2,083 thousand and the add-back of $2,391 thousand of interest income and $1,229 thousand of interest expense. Income taxes payable increased by $1,063 thousand. Cash paid for income taxes was $25 thousand for the six months ended June 30, 2026, compared with $58 thousand for the six months ended June 30, 2025, and cash paid for interest, net of capitalized interest, was $1,266 thousand, compared with $1,507 thousand.
Net cash provided by operating activities was $14,825 thousand for the fiscal year ended December 31, 2025, compared with $13,313 thousand for the fiscal year ended December 31, 2024, an increase of $1,512 thousand. Higher net income of $14,364 thousand, compared with $4,552 thousand, was substantially offset by working capital movements, including a $5,878 thousand use of cash in accounts payable and other liabilities and a $2,763 thousand use of cash in accounts receivable.
Investing activities
Net cash provided by investing activities was $7,793 thousand for the six months ended June 30, 2026, compared with $2,219 thousand for the six months ended June 30, 2025. In the six months ended 2026 we received $19,346 thousand from collections of notes receivable and $237 thousand from sales of property and equipment, offset by $9,354 thousand of originations of notes receivable and $2,436 thousand of purchases of property and equipment. Capital expenditures in the period related principally to the construction of the Solara Pool at Hilton Tashkent, which commenced operations on June 6, 2026.
Net cash provided by investing activities was $792 thousand for the fiscal year ended December 31, 2025, compared with net cash used in investing activities of $16,245 thousand for the fiscal year ended December 31, 2024. The 2025 period included $16,324 thousand of proceeds from sales of property and equipment, principally the sale of the AKFA Office completed in March 2025, and a $4,667 thousand refund of construction advances, offset by $22,062 thousand of originations of notes receivable. The 2024 period included $24,971 thousand of purchases of property and equipment, partially offset by $16,802 thousand of advance consideration received in respect of the AKFA Office.
Financing activities
Net cash used in financing activities was $16,509 thousand for the six months ended June 30, 2026, compared with $7,227 thousand for the six months ended June 30, 2025. The 2026 period comprised $9,696 thousand of repayments of loans payable and $6,854 thousand of distributions to our owner, partially offset by $41 thousand of proceeds from loans payable.
Net cash used in financing activities was $14,847 thousand for the fiscal year ended December 31, 2025, compared with net cash provided by financing activities of $2,720 thousand for the fiscal year ended December 31, 2024. The 2025 period comprised $10,346 thousand of owner distributions, $4,205 thousand of repayments of loans payable and $296 thousand of returns of capital. The 2024 period included $11,701 thousand of capital contributions from the Group’s other entities, partially offset by $6,885 thousand of owner distributions and $2,167 thousand of repayments of loans payable.
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Indebtedness
Our indebtedness consists primarily of U.S. Dollar-denominated term loans from Halyk Bank of Kazakhstan (“HBK”) bearing interest at a fixed rate of 7.5% per annum and maturing on September 15, 2028. Total loans payable were $25,506 thousand as of June 30, 2026, comprising $25,497 thousand of HBK borrowings and $9 thousand of other borrowings, of which $10,217 thousand was classified as current. This compares with $35,186 thousand as of December 31, 2025, of which $14,705 thousand was classified as current, and $39,246 thousand as of December 31, 2024.
Our obligations under the HBK facility are secured by ADW’s building and property, with a carrying amount of $51,354 thousand as of June 30, 2026 and $50,271 thousand as of December 31, 2025, and by a pledge of the equity interests in AKFA DREAM WORLD LLC with a carrying amount of $7,012 thousand as of each date. We had no financial assets or liabilities bearing variable interest rates as of December 31, 2025 or 2024.
Related-party balances
As of June 30, 2026, amounts due from related parties were $19,698 thousand, compared with $26,962 thousand as of December 31, 2025, and notes receivable were $1,331 thousand, compared with $5,022 thousand. Amounts due to related parties were $1,871 thousand as of June 30, 2026, compared with $1,840 thousand as of December 31, 2025. Our principal related-party lending counterparties are Aurum Global Group FE LLC and ADW-International Congress Hall LLC, each an entity under the common control of our UBO. These balances are material to our liquidity, and the timing of their settlement is not within our control. See “Certain Relationships and Related Party Transactions” and Note 22 to our combined financial statements.
Distributions
We distributed $6,854 thousand to our owner during the six months ended June 30, 2026 and $10,728 thousand during the fiscal year ended December 31, 2025. A portion of these amounts represents expenses paid by the Group on behalf of our UBO, which are recorded as owner distributions in the combined statements of changes in shareholders’ equity. In April 2026 our Board of Directors approved a Related Party Transactions Policy and a Dividend Policy, which will govern distributions in the future.
Contractual Obligations and Commitments
The following table summarizes the contractual maturities of our loans payable as of June 30, 2026, assuming all extension options available under the agreements are exercised. The amounts shown are principal only and exclude future interest payments.
| (in thousands) | Amount | |||
| Twelve months ending June 30, 2027 | 10,217 | |||
| Twelve months ending June 30, 2028 | 10,239 | |||
| Twelve months ending June 30, 2029 | 5,050 | |||
| Total loans payable | 25,506 | |||
In addition to the obligations set forth above, we enter into purchase and service arrangements and franchise arrangements in the ordinary course of business, and we incur royalty obligations under our franchise agreements with the Hilton and Wyndham brands. We are also subject to Uzbek tax, currency and customs legislation, which is subject to varying interpretations and may be applied inconsistently by the tax authorities. See “Risk Factors” and Note 19 to our combined financial statements.
Off-Balance Sheet Arrangements
In March 2025, we guaranteed the obligations of a related party under a $100,000 thousand term facility agreement entered into with HBK, and we repledged the same ADW property that secures our own borrowings. The related party is under the common control of our UBO but is not included within the Group. We do not receive consideration for issuing the guarantee and have no recourse against the related party in the event any amounts are required to be paid under the arrangement. Under the terms of the guarantee, we, together with certain other entities under common control, are jointly and severally liable in the event the related party fails to meet its obligations under the facility. The guarantee remains in effect through December 31, 2031, and maximum potential future payments under the guarantee are $100,000 thousand, plus accrued interest, fees and penalties. No liability has been recognized in respect of this guarantee as of the inception date, as of December 31, 2025 or as of June 30, 2026.
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The maximum potential exposure under this guarantee substantially exceeds our total shareholders’ equity as of June 30, 2026. A demand under the guarantee, or an enforcement action against the repledged property, would have a material adverse effect on our financial condition, results of operations and liquidity. See “Risk Factors.”
Other than the guarantee described above, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Estimates
The preparation of our combined financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. We base our estimates on historical experience and other assumptions we believe to be reasonable under the circumstances, and actual results may differ. We believe the following accounting estimates involve the most significant judgments used in the preparation of our combined financial statements.
Allowance for expected credit losses
We recognize an allowance for expected credit losses on financial assets measured at amortized cost, including accounts receivable and notes receivable, under the current expected credit loss model. For accounts receivable, we apply a provision matrix, grouping receivables into portfolios with similar risk characteristics and stratifying them by aging category, and we discount the gross carrying amounts using the relevant interest rates published by the Central Bank of Uzbekistan to reflect the loss given default arising from delayed settlement. For notes receivable, we apply a counterparty-specific approach that incorporates past due status, credit quality indicators and industry and geographic risk factors. The estimate incorporates reasonable and supportable forecasts, including macroeconomic indicators such as GDP growth in Uzbekistan. Changes in these assumptions, particularly those relating to economic conditions or customer payment patterns, may result in material adjustments to the allowance in future periods. As of June 30, 2026, the allowance for credit losses was $647 thousand against gross accounts receivable of $5,088 thousand, compared with $390 thousand against $4,250 thousand as of December 31, 2025, and $18 thousand against notes receivable, compared with $68 thousand as of December 31, 2025. Our accounts receivable and notes receivable balances, together with amounts due from related parties, represented a substantial portion of our current assets at each date.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of business, principally foreign currency risk, interest rate risk, credit risk and liquidity risk.
Foreign currency risk
The functional currency of each of our operating entities is the Uzbek Soum, while our borrowings and certain other monetary balances are denominated in U.S. Dollars. As a result, movements in the UZS/U.S. Dollar exchange rate affect both the translation of our results into our reporting currency and the remeasurement of foreign-currency monetary balances through profit or loss.
As of June 30, 2026, our foreign-currency denominated monetary assets were $120 thousand and our foreign-currency denominated monetary liabilities were $26,783 thousand, giving a net monetary liability position of $26,663 thousand, compared with $3,431 thousand, $35,893 thousand and $32,462 thousand, respectively, as of December 31, 2025. Based on our net position as of June 30, 2026, a hypothetical 10% strengthening or weakening of the U.S. Dollar against the Uzbek Soum, with all other variables held constant, would have resulted in a foreign exchange loss or gain of approximately $2,666 thousand. We do not currently use derivative instruments to hedge our foreign currency exposure.
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Credit risk
Credit risk arises from accounts receivable, other receivables, notes receivable, amounts due from related parties and cash and cash equivalents, and our maximum exposure is represented by the carrying amounts of those financial assets. We conduct all of our operations in the Republic of Uzbekistan, and our cash is held with financial institutions in Uzbekistan, which exposes us to concentration risk. We generally provide credit terms of 15 to 30 days from the invoice date for corporate customers, and we perform ongoing credit evaluations of our customers. Individual customers are expected to prepay or pay at the time of the service. A significant portion of our receivables is concentrated in amounts due from entities under the common control of our UBO, the financial condition and results of operations for such entities are not reflected in our combined financial statements.
Liquidity risk
Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with our financial liabilities as they fall due. Our approach to liquidity management is to maintain sufficient liquidity to meet our obligations under both normal and stressed conditions without incurring unacceptable losses or damage to our reputation. We depend on operating cash flow, on collections of related-party and notes receivable, and on our continued access to financing to meet scheduled debt amortization and working capital requirements.
Inflation
Inflation in Uzbekistan affects our operating costs, including payroll, food and beverage procurement costs and utilities. During the six months ended June 30, 2026, average food procurement costs increased by approximately 10% compared with the six months ended June 30, 2025. While we seek to pass increases in costs through to customers in the form of higher rates, competitive conditions may limit our ability to do so, and inflation may have a material adverse effect on our margins.
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Emerging Growth Company and Smaller Reporting Company Status
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable to public companies, including an exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period afforded by Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to use this extended transition period. As a result, our combined financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates. We may take advantage of these exemptions until we are no longer an emerging growth company.
We are also a “smaller reporting company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, and we may continue to be a smaller reporting company after we cease to be an emerging growth company.
Recently Issued and Recently Adopted Accounting Pronouncements
For a description of recently issued and recently adopted accounting pronouncements, including their expected effect on our combined financial statements, see the Notes to our combined financial statements included elsewhere in this information statement.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of Common Stock immediately following the Closing regarding beneficial ownership of 5% or more of Common Stock by: (i) each person known to STWI who beneficially owns more than five percent of STWI’s Common Stock; and (ii) each of the expected officers and directors of STWI following the Registration Date. The percentage of beneficial ownership is based on 188,142,768 shares of Common Stock being outstanding as of consummation of the Share Exchange Transaction.
Unless otherwise indicated, the address for each beneficial owner is c/o StageWise Strategies Group (TEG Overseas, Inc. after Closing), 64/2 Mahtumquili Street, Yashnobod District 100000, Tashkent City, Republic of Uzbekistan.
| NAME OF BENEFICIAL OWNER | NUMBER OF SHARES BENEFICIALLY OWNED | PERCENTAGE OF SHARES OUTSTANDING BENEFICIALLY OWNED | ||||||
| Directors and Executive Officers: | ||||||||
| Anita Mendiratta | 0 | 0 | ||||||
| Wesley T. Davis | 0 | 0 | ||||||
| Marc William Kasher | 0 | 0 | ||||||
| Richard Nolan Sharko | 0 | 0 | ||||||
| Irodakhon Abduvakhitova | 58,591,499 | 31.14 | % | |||||
| Elmurod Sopiev | 0 | 0 | ||||||
| Temur Zokirov | 0 | 0 | ||||||
| All executive officers and directors as a group (7 persons) | 58,591,499 | 31.14 | % | |||||
| 5% or Greater Stockholders | ||||||||
| Jakhongir Abidovich Artikkhodjaev* | 128,506,935 | 68.25 | % | |||||
| Tourism and Entertainment Group LLC | 128,506,935 | 68.30 | % | |||||
| Irodakhon Abduvakhitova | 58,591,499 | 31.14 | % | |||||
| (*) | Reflects the 128,506,935 shares of common stock held by Tourism and Entertainment Group LLC, an Uzbek limited company, in which Jakhongir Abidovich Artikkhodjaev holds over 99% of the outstanding ownership interests. |
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DIRECTORS AND EXECUTIVE OFFICERS
As per the Share Exchange Agreement, our board of directors will consist of five individuals, all of whom were designated by TEG SPV prior to the Closing, including four individuals who qualify as “Independent Directors” under the OTCQB Standards. The directors of the Post-Closing board serve in a single class, with terms as provided in our bylaws.
Below is a list of our directors and executive officers following the Share Exchange Transaction. They were officers or directors of TEG SPV prior to the Share Exchange Transaction. The business address for the directors and officers of the Company is 64/2 Mahtumquli Street, Yashnobod District, Tashkent, 2K, 100000. Each of Elina Davidyan, Bahtiyor Kadirov, and Temur Zokirov will resign from their positions as a director effective as of the Registration Date.
| Name | Age | Position | ||
| Executive Officers and Non-Independent Director | ||||
| Elmurod Sopiev | 37 | CEO | ||
| Temur Zokirov | 30 | CFO | ||
| Irodakhon Abduvakhitova | 27 | Non-Independent Member of the Board | ||
| Non-Management Directors | ||||
| Anita Mendiratta | 58 | Chair of the Board and Independent | ||
| Wesley T. Davis | 59 | Independent Member of the Board | ||
| Marc William Kasher | 56 | Independent Member of the Board | ||
| Richard Nolan Sharko | 65 | Independent Member of the Board |
Executive Officers and Non-Independent Director
Elmurod Sopiev has served as the CEO of the Company, since June 2026. Mr. Sopiev has also served as the CEO of TEG SPV, since June 2, 2026. Since May 2025, Mr. Sopiev has served as a Director of ADW, a subsidiary of TEG SPV and the operator of Hilton Tashkent. Mr. Sopiev served as a General Manager of Hilton Tashkent from November 2023 to May 2025. From October 2022 to November 2023, Mr. Sopiev served as a Director of Operations at Hilton Tashkent. From January 2021 to September 2022, Mr. Sopiev was a Cluster Food and Beverage Director at AKFA Holding. Mr. Sopiev was awarded a bachelor’s degree in tourism, hotel and restaurant management from Tashkent Tourism College in 2008.
Mr. Temur Zokirov has served as the Chief Financial Officer of the Company, since June 2026. Mr. Zokirov has also served as the CFO of TEG SPV, since July 2, 2026. Mr. Zokirov has worked as a strategic advisor to the Chief Executive Officer of TEG Parent since April 2023. Prior to joining TEG, from September 2022 to March 2023, Mr. Zokirov worked at PricewaterhouseCoopers Central Asia and Caucasus B.V. in Tashkent, Uzbekistan as a Manager, as a senior tax consultant, from February 2021 to August 2022 and as a tax consultant, from January 2018 to January 2021. Mr. Zokirov was awarded a bachelor’s degree in business administration from Westminster International University in Tashkent, Uzbekistan in June 2016, and a master’s degree in management from IE Business School in Madrid, Spain in December 2017.
Irodakhon Abduvakhitova will commence serving as a director of our board effective as of the Registration Date. Ms. Abduvakhitova has also served as a Non-Independent Member of the Supervisory Board of TEG SPV, since April 2026. Since June 2025, Ms. Abduvakhitova has served as the General Manager of Tourism and Entertainment Group, having first joined the company in this position on a concurrent basis in December 2024. In this role she is responsible for the administrative management of the company and the coordination of its day-to-day operations. From June 2020 to March 2025, Ms. Abduvakhitova served as the Director of Inspo Care, a company that imports and distributes cosmetics and perfumes.
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Non-Executive Directors
Anita Mendiratta will commence serving as a director of our board effective as of the Registration Date. Ms. Mendiratta has also served as the Chair of the Supervisory Board of TEG SPV, since April 2026. Ms. Mendiratta is the Founder and President of Anita Mendiratta & Associates, a strategic advisory practice she established in 2002, and has over three decades of experience advising governments and international institutions across more than 100 countries in tourism, aviation, leadership and sustainable development. Ms. Mendiratta serves as a Special Advisor to the Secretary General of UN Tourism (formerly UNWTO) and as a strategic resource to the World Bank, the World Travel & Tourism Council, the International Air Transport Association, the Air Transport Action Group and ICCA. She is a Founding Advisory Board Member of the Royal Commission for AlUla in Saudi Arabia and formerly served as a Special Advisor to the CEO of the Saudi Tourism Authority. Ms. Mendiratta is an Executive in Residence at the University of Surrey and a Visiting Professor at Cranfield University in the United Kingdom, as well as a published author and a regular commentator on international media. Earlier in her career, Ms. Mendiratta served as a Project Director at The Added-Value Group from 2000 to 2002, as a Marketing Manager at The Coca-Cola Company from 1998 to 2000, and in senior marketing and communications roles at Unilever in South Africa and Malawi from 1991 to 1998. She began her career at IBM Canada in 1990. Ms. Mendiratta was awarded a master’s degree in marketing with honors in 1994 and a bachelor of arts degree from McMaster University in Canada in 1989, and completed the Global Business Leadership program at Harvard University in 2020.
Wesley T. Davis will commence serving as a director of our board effective as of the Registration Date. Mr. Davis has also served as an Independent Member of the Supervisory Board of TEG SPV, since April 2026. Mr. Davis is a finance professional with over 30 years of experience in emerging and frontier markets, spanning investment banking, project finance and operating company roles. Since June 2025, Mr. Davis has served as a Senior Advisor for Capital Formation at Buenassa, where he is responsible for funding solutions for the group’s critical minerals trading and refinery development operations in the Democratic Republic of Congo. From 2020 to 2025, Mr. Davis served as a Senior Managing Director at Delphos Ltd in London, advising governments and state-owned enterprises in Central Asia and Africa on infrastructure and climate transition financing. From 2020 to 2023, Mr. Davis served as a member of the Supervisory Board of Ipoteka Bank in Uzbekistan, where he chaired the Corporate Governance Committee and took part in the country’s only privatisation of a state-owned bank. From 2017 to 2021, he served as Finance Director of APQ Global, a company listed on the AIM market of the London Stock Exchange, and from 2014 to 2017 as Senior Vice President for Finance at Aiteo Group in Lagos. From 2009 to 2016, Mr. Davis was a member of the Board of Directors of Asia Pacific Investment Partners in London and Ulaanbaatar. Earlier in his career, Mr. Davis held senior capital markets positions at Renaissance Capital, HSBC Bank plc, Merrill Lynch, Deutsche Bank and Chase Manhattan Bank in London and New York. Mr. Davis was awarded an MBA from Arizona State University and a master’s degree in international management from the American Graduate School of International Management in 1993, and a bachelor’s degree in economics from the University of Florida in 1988.
Marc Kasher will commence serving as a director of our board effective as of the Registration Date. Mr. Kasher has also served as an Independent Member of the Supervisory Board of TEG SPV, since June 2026. Mr. Kasher has more than 25 years of investment and private equity experience, together with an extensive record of service as an independent director of listed companies and sovereign institutions. From 2021 to 2024, Mr. Kasher served as an Independent Director and Chairman of the Audit Committee of Noventiq, a global digital transformation and cybersecurity provider listed on the London Stock Exchange. From 2020 to 2023, he served as an Independent Director of Kazatomprom, the world’s largest producer of natural uranium, where he chaired the Nominating and Remuneration Committee and was a member of the Audit, Strategic Investments, and Health and Safety committees. From 2018 to 2021, Mr. Kasher served as an Independent Director of the National Investment Corporation, a sovereign wealth fund of the National Bank of Kazakhstan, chairing both its Audit and Remuneration committees. From 2013 to 2019, he served as an Independent Director of Luxoft, a digital services company listed on the New York Stock Exchange, where he chaired the Audit, M&A and Compensation committees and structured eleven strategic acquisitions ahead of the company’s $2 billion sale to DXC Technology. From 1997 to 2015, Mr. Kasher was with PineBridge Investments (formerly AIG Global Investments), where from 2010 he served as a Managing Director and as Chief Executive Officer of its Eurasia private equity practice. Earlier in his career, from 1992 to 1995, he worked on privatization programs in Uzbekistan, Kyrgyzstan, Ukraine and Russia in cooperation with USAID. Mr. Kasher was awarded an MBA with a concentration in finance from Georgetown University and a bachelor of arts degree from Tufts University.
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Richard Sharko will commence serving as a director of our board effective as of the Registration Date. Mr. Sharko has also served as an Independent Member of the Supervisory Board of TEG SPV, since June 2026. Mr. Sharko has over 40 years of international experience in finance, accounting, auditing and risk management, including service on the boards of listed companies, financial institutions and standard-setting bodies. Since December 2022, Mr. Sharko has served as a Board Member of Solidcore Resources plc in Astana, where he chairs the Remuneration Committee and is a member of the Audit Committee. From 2022 to 2024, he served as a Board Member and Chairman of the Audit Committee of AikGroup (CY) Ltd, a bank holding company based in Limassol. From 2015 to 2020, Mr. Sharko served as a Board Member of the International Auditing and Assurance Standards Board in New York, where he chaired the ISA 540 Revised Task Force and the IAASB–IASB liaison working group. Mr. Sharko spent his executive career with PwC, which he joined in 1983 and where he served as a Partner from 1996 onwards in Vladivostok, Moscow, London and Amsterdam. During his tenure he served as Chief Risk Officer and Management Board member of PwC Central and Eastern Europe from 2013 to 2015, as Chief Accountant of the CEE region responsible for IFRS technical matters from 2006 to 2013, as a member of the PwC Global IFRS Leadership team, and as a member of the PwC Global Network Governance Board from 2009 to 2013. Mr. Sharko was awarded a bachelor of science degree in accounting from Loyola Marymount University in Los Angeles in 1983 and is a Certified Public Accountant (retired) of the State of California.
Committees of the Board
We have established three standing committees of the Board — an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. Each committee has the composition and responsibilities described below. Each committee operates under a written charter adopted by the Board. Our Board may from time to time establish other committees as and when required to facilitate the management of our business.
Audit Committee
The Audit Committee assists the Board in overseeing our accounting and financial reporting processes and the audits of our financial statements. The Audit Committee’s responsibilities include, among other matters: appointing, approving the compensation of, and assessing the independence of our registered public accounting firm; overseeing the work of our registered public accounting firm, including through the receipt and consideration of reports from such firm; reviewing and discussing with management and the registered public accounting firm our annual and quarterly financial statements and related disclosures; coordinating the Board’s oversight of our internal control over financial reporting, disclosure controls and procedures; discussing our risk management policies; meeting independently with our registered public accounting firm and management; reviewing and approving or ratifying any related person transactions; and preparing the Audit Committee report required by the SEC, to the extent required.
The members of our Audit Committee are expected to be Richard Sharko, Wesley Davis, and Anita Mendiratta, with Richard Sharko serving as chairperson of this committee. Our Board determines that Richard Sharko qualifies as an “audit committee financial expert” as defined by the rules and regulations of the SEC.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee assists the Board in overseeing matters relating to the nomination of directors and corporate governance. The Nominating and Corporate Governance Committee’s responsibilities include, among other matters: reviewing the composition of and evaluating the performance of the Board; recommending persons for election to the Board; reviewing the composition of the committees of the Board and recommending persons to serve as members of such committees; reviewing and maintaining compliance of committee membership with applicable regulatory requirements; and reviewing potential conflicts of interest of members of the Board and our executive officers .
The members of our Nominating and Corporate Governance Committee are expected to be Marc Kasher, Wesley Davis, and Anita Mendiratta, with Marc Kasher serving as chairperson of this committee.
Compensation Committee
The Compensation Committee assists the Board in overseeing matters relating to executive and director compensation. The Compensation Committee’s responsibilities include, among other things, reviewing and approving, or recommending for approval by the Board, the compensation of our Chief Executive Officer and other executive officers; overseeing and administering our cash and equity incentive plans; and reviewing and making recommendations to the Board with respect to director compensation.
The members of our Compensation Committee are expected to be Marc Kasher, Wesley Davis, and Anita Mendiratta, with Marc Kasher serving as chairperson of this committee.
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EXECUTIVE COMPENSATION
Executive Compensation of The Company
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the Company’s named executive officers and directors during the fiscal year ended September 30, 2025 and until the date of this Information Statement in all capacities for the accounts of such persons:
Summary Compensation Table
| Name and Principal Position | Period | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
| Victor Balan (Director, President, Secretary, Treasurer and Chief Executive Officer) | Since inception July 3, 2023 till June 5, 2026 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Marcelo Ramon Alarcon Martinez (Director) | Since November 21, 2024 till June 5, 2026 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Anna Toczko (Director) | Since November 21, 2024 till June 5, 2026 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Elmurod Sopiev (Chief Executive Officer) | Since June 5, 2026 till the date of this Information Statement | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Temur Zokirov (Chairman of the Board, Chief Financial Officer and Secretary) | Since June 5, 2026 till the date of this Information Statement | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Bahtiyor Kadirov (Director) | Since June 5, 2026 till the date of this Information Statement | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
| Elina Davidyan (Director) | Since June 5, 2026 till the date of this Information Statement | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||||||
There are no current employment agreements between the Company and its officers. They have agreed to work with no remuneration until such time as STWI receives sufficient revenues necessary to provide management salaries. At this time, STWI cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of the compensation will be.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
STWI
It is STWI’s practice and policy to comply with all applicable laws, rules and regulations regarding related person transactions, including the Sarbanes-Oxley Act of 2002. A related person is an executive officer, director or more than 5% stockholder of STWI, including any immediate family members, and any entity owned or controlled by such persons. STWI’s Board of Directors (excluding any interested director) is charged with reviewing and approving all related-person transactions, and a special committee of Board of Directors is established to negotiate the terms of such transactions. In considering related-person transactions, Board of Directors considers all relevant available facts and circumstances.
Related Party Transactions
To support the Company’s financial needs, it may receive advances from related parties until it can sustain its operations or secure sufficient funding through the sale of its equity or traditional debt financing.
On June 30, 2026, the Company entered into a share subscription agreement (the “June 2026 Share Subscription Agreement”) with Jakhongir Abidovich Artikkhodjaev, for the purchase of 1,000,000 shares of the Company’s common stock at an aggregate purchase price of $250,000. On the same date, the Company received $44,500 toward the purchase price, which was recorded as a deposit for common stock. On July 17, 2026, upon receipt of the remaining $205,500 of the aggregate purchase price, the Company issued and sold 1,000,000 shares of its common stock to Jakhongir Abidovich Artikkhodjaev pursuant to the June 2026 Share Subscription Agreement.
Related Party Loan
On November 25, 2024, the Company entered into a Loan Agreement with Victor Balan, who served as the Company’s President, Director, Treasurer, Secretary, and CEO. Under this agreement, Mr. Balan agreed to provide the Company with a non-interest-bearing, fully secured loan in the amount of $200,000. This loan replaced the debt previously assigned to him by the former officer and director of the Company. On April 1, 2025, the loan agreement was amended, increasing the facility amount to $350,000. The loan was for working capital purposes, was interest-free, and had no fixed payment terms other than the maturity date of March 31, 2030. As of June 30, 2026, the outstanding balance owed by the Company to Victor Balan under the amended loan agreement was $0, following the execution of the Share Subscription Agreement on June 5, 2026 which required the payment of the related party loan.
On July 4, 2023, STWI entered into an interest-free loan agreement with Yuliia Zaporozhan, STWI’s former Chief Executive Officer and former director. According to this agreement, Ms. Zaporozhan provided financial support to STWI, as needed, up to a total of $90,000 over the period of five years. On November 22, 2024, Agreement on the Assignment of Rights was executed between STWI, Viktor Balan, and Yulia Zaporozhan. Viktor Balan, who at that time served as STWI’s Director and Treasurer (and subsequently assumed the roles of President, Secretary, and CEO following Yulia Zaporozhan’s departure), paid Yulia Zaporozhan $136,050, representing the full outstanding balance of the debt owed by STWI to Yulia Zaporozhan. In consideration for this payment, Yulia Zaporozhan irrevocably assigned, transferred, and set over to Viktor Balan all of Yulia Zaporozhan’s right, and title to the debt. This assignment effectively transferred the debt obligation from Yulia Zaporozhan to Viktor Balan.
As of June 30, 2026, the outstanding balance owed by the Company to Victor Balan under the amended loan agreement was $0. The related party loan was repaid in full pursuant to the Share Subscription Agreement dated June 5, 2026, which required the settlement of the outstanding loan balance.
TEG SPV
During the fiscal years ended December 31, 2025 and 2024, TEG SPV and its subsidiaries entered into certain transactions with related parties in the ordinary course of its business. The aggregate amounts of such related party transactions were approximately $35,964 thousand and $22,847 thousand, respectively.
These transactions were entered into in the ordinary course of the TEG SPV and its subsidiaries’ business and on terms that TEG SPV and its subsidiaries believe to be comparable to those available in transactions with unrelated third parties. TEG SPV also entered into certain loan arrangements with its affiliates. TEG SPV and its subsidiaries believe that the terms of these transactions were fair and reasonable and in the best interests of TEG SPV and its subsidiaries.
Related Party Transactions
For a description of the transactions and arrangements between the Company and its related parties, including the nature and amounts of such transactions during the periods presented, see Note 22, “Related Party Transactions,” to TEG SPV’s combined financial statements included elsewhere in this Information Statement, which is incorporated herein by reference.
TEG SPV believes that the related party transactions described therein were entered into in the ordinary course of business and on terms that were no less favorable to the TEG SPV than those that could reasonably have been obtained in comparable transactions with unrelated third parties.
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LEGAL PROCEEDINGS
We and our subsidiaries are involved in claims and lawsuits incidental to the ordinary course of our businesses, such as personal injury actions by guests and employees and complaints alleging employee discrimination. We and our subsidiaries maintain various insurance policies, including general liability and property damage insurance, as well as workers’ compensation, business interruption, and other policies, which it believes to provide adequate coverage for the risks associated with its range of operations. We believe that we are adequately insured against these claims by our existing insurance policies and that the outcome of any pending claims or proceedings will not have a material effect on its financial statements.
We are not currently a party to any pending material legal proceedings, and, to the knowledge of its management, no material legal proceedings have been threatened against us.
47
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our Common Stock was removed from quotation on the OTCQB on August 28, 2026 and is currently quoted on the OTCID Basic Market. We are using commercially reasonable efforts to reinstate the quotation of our Common Stock on the OTCQB, including through the change-of-control re-application required by OTC Markets, but there can be no assurance that OTC Markets will approve our application. There has been limited trading in our shares of Common Stock, and we cannot assure you that there will be an active market in the future.
On October 12, 2026, the last reported sales price of our Common Stock on the OTCID Basic Market was $0.4724. The over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions
Stockholders of Record
Based upon information furnished by our transfer agent, as of October 12, 2026, we had approximately 51 stockholders of record.
Dividends
We have never paid or declared any dividends on our Common Stock and do not anticipate paying cash dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
We currently do not have any equity compensation plans.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
48
RECENT SALES OF UNREGISTERED SECURITIES
In July 2023, in connection with its formation, STWI issued an aggregate of 4,000,000 shares of common stock to its founders for aggregate cash consideration of $4,000, at a purchase price of $0.001 per share. Of these shares, 2,000,000 shares were issued to Yuliia Zaporozhan for a cash investment of $2,000, and 2,000,000 shares were issued to Viktor Balan for a cash investment of $2,000. In December 2025, 1,000,000 shares held by Mr. Balan were canceled.
On June 30, 2026, StageWise Strategies entered into a Share Subscription Agreement with Jakhongir Abidovich Artikkhodjaev, the Company’s controlling shareholder, pursuant to which the Company agreed to issue and sell 1,000,000 shares of common stock for an aggregate purchase price of $250,000, at a purchase price of $0.25 per share. The shares were issued on July 20, 2026.
On the Closing Date, the Company issued the 183,098,434 Exchange Shares to the Sellers in the Share Exchange, as described in Items 1.01, 2.01 and 3.02 of this Current Report.
49
DESCRIPTION OF REGISTRANT’S SECURITIES
The following description of our capital stock does not purport to be complete and is subject to and qualified in its entirety by reference to our certificate of incorporation and bylaws, as they may be amended from time to time, any certificates of designations through which we may establish the terms and conditions of particular series of preferred stock, other documents governing the terms and conditions of particular securities and applicable provisions of Nevada law.
Common Stock
As of the date of this Current Report, we are authorized to issue 800,000,000 shares of Common Stock, par value $0.001 per share, of which 188,142,768 shares of Common Stock were issued and outstanding as of the date of this Current Report. Each share of our common stock is entitled to one vote on all matters submitted to a vote of our stockholders, including the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all shares of common stock that are present in person or represented by proxy. Holders of common stock representing a majority of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of our common stock are entitled to receive ratably all dividends, if any, as may be declared from time to time by our Board of Directors out of the funds legally available. Our articles of incorporation do not provide for cumulative voting in the election of directors. Holders of common stock have no pre-emptive or conversion rights and there are no redemption provisions applicable to the common stock.
Preferred Stock
Our Board of Directors has the authority, without action by our stockholders, to designate and issue up to 50,000,000 shares of blank check preferred stock, par value $0.001 per share.
50
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Nevada law permits a corporation to indemnify its directors, officers, employees and agents under certain circumstances. Our articles of incorporation and bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted by the Nevada Revised Statutes, as the same now exist or may hereafter be amended.
Under the Nevada Revised Statutes, a corporation may indemnify any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation in such capacity for another entity, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, if such person acted in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
In an action by or in the right of the corporation, indemnification may be made only for expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense or settlement of the action, provided that no indemnification may be made in respect of any claim, issue or matter as to which the person has been adjudged by a court of competent jurisdiction to be liable to the corporation, unless and only to the extent that the court determines that, in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
The Nevada Revised Statutes further provide that, to the extent a director or officer has been successful on the merits or otherwise in defending any action, suit or proceeding referred to above, or in defending any claim, issue or matter therein, the corporation must indemnify such person against expenses, including attorneys’ fees, actually and reasonably incurred in connection therewith.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
51
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 9.01 of this Current Report for the financial statements of TEG SPV, the pro forma financial information and the historical financial statements of the Company prior to the Share Exchange required hereunder.
52
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
The information set forth under Items 1.01, 2.01 and 5.02 of this Current Report on Form 8-K is incorporated herein by reference.
As a result of the issuance of shares of Common Stock to the TEG SPV Shareholders in the Share Exchange, a change in control of the Company occurred on the Closing Date. Prior to the Share Exchange, Jakhongir Abidovich Artikkhodjaev held approximately 79.3% of the issued and outstanding Common Stock. Immediately following the Closing TEG Parent held 128,506,935 shares, or approximately 68.30%, and the Individual Seller held 58,591,499 shares, or approximately 31.14%, of the 188,142,768 shares of Common Stock then outstanding, and the Sellers together held approximately 99.44% of the outstanding Common Stock.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Pursuant to the Share Exchange Agreement, as of the Registration Date, (i) Temur Zokirov, Bahtiyor Kadirov and Elina Davidyan will resign as members of the Board, and (ii) Anita Mendiratta, Wesley T. Davis, Marc William Kasher, Richard Nolan Sharko and Irodakhon Abduvakhitova, each of whom was designated by TEG SPV, will commence serving as members of the Board, with Ms. Mendiratta serving as Chair of the Board. The resignations are in connection with the Share Exchange and are not the result of any disagreement with the Company on any matter relating to its operations, policies or practices. Mr. Zokirov continues to serve as the Company’s Chief Financial Officer, and Elmurod Sopiev continues to serve as the Company’s Chief Executive Officer.
The Board has determined that each of Ms. Mendiratta, Mr. Davis, Mr. Kasher and Mr. Sharko qualifies as an “independent director” under the OTCQB standards. It is expected that the Board will establish an Audit Committee, consisting of Mr. Sharko, Mr. Davis and Ms. Mendiratta, with Mr. Sharko serving as the chair; a Compensation Committee, consisting of Mr. Kasher, Mr. Davis and Ms. Mendiratta, with Mr. Kasher serving as the chair; and a Nominating and Corporate Governance Committee consisting of Mr. Kasher, Mr. Davis and Ms. Mendiratta, with Mr. Kasher serving as the chair.
Biographical information for each of the Company’s directors and executive officers is set forth under “Directors and Executive Officers” in Item 2.01 of this Current Report and is incorporated herein by reference. Other than the designation of the new directors by TEG SPV pursuant to the Share Exchange Agreement, there are no arrangements or understandings between any of the new directors and any other person pursuant to which he or she was appointed. Ms. Abduvakhitova is the daughter of Mr. Artikkhodjaev, the Company’s controlling stockholder, and received 58,591,499 Exchange Shares in the Share Exchange as the Individual Seller. Except as described in this Current Report, none of the new directors has a direct or indirect material interest in any transaction required to be disclosed under Item 404(a) of Regulation S-K.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Pursuant to the Share Exchange Agreement, the Company changed its corporate name to “TEG Overseas, Inc.” An Amended and Restated Articles of Incorporation was filed with the Secretary of State of the State of Nevada to effect the name change, which became effective on October 12, 2026. The Company has notified FINRA and OTC Markets of the name change.
In addition, it is expected that the new Board will approve a change in the Company’s fiscal year end from September 30th to December 31st effective following the Registration Date, to conform to the fiscal year end of TEG SPV, the accounting acquirer in the Share Exchange.
53
Item 9.01 Financial Statements and Exhibits.
| (a) | Financial statements of the business acquired. |
The audited financial statements of STWI as of September 30, 2025 and 2024, together with the related notes and the report of Dylan Floyd Accounting & Consulting, independent registered public accounting firm, are filed as Exhibit 99.1 to this Current Report. The unaudited financial statements of STWI as of June 30, 2026 and for the three and nine months ended June 30, 2026 and 2025, together with the related notes, are filed as Exhibit 99.2 to this Current Report. The audited combined financial statements of TEG SPV as of December 31, 2025 and 2024 and for the years then ended, together with the related notes and the report of Wei, Wei & Co., LLP, independent registered public accounting firm, are filed as Exhibit 99.3 to this Current Report. The unaudited condensed combined financial statements of TEG SPV as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025, together with the related notes, are filed as Exhibit 99.4 to this Current Report. Each is incorporated herein by reference.
| (b) | Pro forma financial information. |
The pro forma financial statements with respect to the transactions described in Item 2.01 are attached hereto as Exhibit 99.5 and are incorporated herein by reference.
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 2.1 | Share Exchange Agreement, dated as of October 6, 2026, by and among StageWise Strategies Corp., TEG SPV LLC, Tourism and Entertainment Group LLC and Irodakhon Abduvakhitova (Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2026) | |
| 3.1* | Amended and Restated Articles of Incorporation of the Company | |
| 3.2 | Amended and Restated Bylaws of the Company (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2026) | |
| 10.1** | Franchise Agreement, dated December 13, 2018, between AKFA Dream World LLC and Hilton Hotel Worldwide Manage Limited | |
| 10.2** | Services Agreement, dated December 29, 2020, between Wide Tent System LLC and Wyndham Hotel Group (UK) East Limited, as assigned to Cultural Landmark Hotel LLC | |
| 10.3** | Sublicense Agreement, dated December 29, 2020, between Wide Tent System LLC and Wyndham Hotel Group (UK) East Limited# | |
| 10.4** | Assignment, Assumption and Amendment Agreement, dated August 7, 2026, by and among Wide Tent System LLC, Cultural Landmark Hotel LLC and Wyndham Hotel Group (UK) East Limited# | |
| 21.1* | List of subsidiaries | |
| 99.1* | Audited combined financial statements of StageWise Strategies Corp. as of and for the years ended September 30, 2025 and 2024 | |
| 99.2* | Unaudited financial statements of StageWise Strategies Corp. as of June 30, 2026 and for the three and nine months ended June 30, 2026 and 2025 | |
| 99.3* | Audited combined financial statements of TEG SPV LLC as of December 31, 2025 and 2024 | |
| 99.4* | Unaudited condensed combined financial statements of TEG SPV LLC as of June 30, 2026, and for the three and six months ended June 30, 2026 and 2025 | |
| 99.5* | Unaudited pro forma condensed combined financial information | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed herewith |
| ** | To be filed by Amendment |
| + | The exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish a copy of any omitted schedules to the SEC upon request. |
| # | Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
54
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 hereunto duly authorized.
Dated: October 14, 2026
| TEG OVERSEAS, INC. | ||
| By: | /s/ Temur Zokirov | |
| Name: | Temur Zokirov | |
| Title: | Chief Financial Officer | |
55
Exhibit 99.1
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors
Stagewise Strategies Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Stagewise Strategies Corp. (the “Company”) as of September 30, 2025 and September 30, 2024, the related statements of operations, statements of cash flows and statement changes in stockholders’ deficit, from inception to the period ended September 30, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows from inception to the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $112,364 and a negative cash flow from operations amounting to $74,758 from inception to the period ended September 30, 2025. These factors as discussed in Note 3 of the financial statements raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosure that are material to the financial statements and (2) involve especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit maters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Related party loans
We noted a significant related party loans as a critical matter.
We performed the following procedures to address the matter such as, confirmation of those related party loans, risk assessment of the nature of the related party transactions, review of the recent minutes of meetings of stockholders, directors, and committees, review of the presence of any significant journal entries and other adjustments and Inquiry with management of any undisclosed related party contract.
DYLAN FLOYD ACCOUNTING & CONSULTING
PCAOB # 6235
We have served as the Company’s auditor since 2023. Newhall, California
December 15, 2025
F-1
STAGEWISE STRATEGIES CORP.
BALANCE SHEETS
| As of September 30, 2025 | As of September 30, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 4,573 | 11,343 | ||||||
| Total Current Assets | $ | 4,573 | $ | 11,343 | ||||
| Other Assets | ||||||||
| Intangible Assets, net | 152,216 | 104,401 | ||||||
| Prepaid expenses | 8,078 | - | ||||||
| Total Other Assets | $ | 160,294 | $ | 104,401 | ||||
| TOTAL ASSETS | $ | 164,867 | $ | 115,744 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | 8,599 | 13,500 | ||||||
| Deferred revenue | 14,602 | 10,000 | ||||||
| Loan from Related Parties | 218,700 | 121,830 | ||||||
| Total Current Liabilities | $ | 241,901 | $ | 145,330 | ||||
| Total Liabilities | $ | 241,901 | $ | 145,330 | ||||
| Stockholders’ Equity (Deficit) | ||||||||
| Common Stock, $0.001 par value,75,000,000 shares authorized, 5,044,334 shares issued and outstanding as of September 30, 2025 and 4,134,000 as of September 30, 2024 | 5,044 | 4,134 | ||||||
| Additional Paid-in Capital | 30,286 | 3,886 | ||||||
| Accumulated Deficit | (112,364 | ) | (37,606 | ) | ||||
| Total Stockholders’ Equity (Deficit) | $ | (77,034 | ) | $ | (29,586 | ) | ||
| TOTAL LIABILITIES & STOCKHOLDER’S EQUITY (DEFICIT) | $ | 164,867 | $ | 115,744 | ||||
See accompanying notes, which are an integral part of these financial statements.
F-2
STAGEWISE STRATEGIES CORP.
STATEMENTS OF OPERATIONS
| Year ended September 30, 2025 | Year ended September 30, 2024 | |||||||
| Revenue | $ | 95,409 | $ | 9,007 | ||||
| Gross Profit | $ | 95,409 | $ | 9,007 | ||||
| Operating Expenses | ||||||||
| Office rent | 639 | 511 | ||||||
| Postage and Delivery | - | 13 | ||||||
| Bank Service Charges | 416 | 6 | ||||||
| Business Licenses and Permits | 200 | 915 | ||||||
| Dues & Subscriptions | 30 | - | ||||||
| Website CRO expenses | 9,000 | - | ||||||
| Website Technical Support | 12,000 | - | ||||||
| Depreciation Expense | 34,635 | 13,299 | ||||||
| Professional Fees | 44,749 | 24,886 | ||||||
| SEO Services | 14,784 | - | ||||||
| Marketing Services | 30,424 | - | ||||||
| Server Lease | 8,493 | - | ||||||
| Website and API Expenses | 14,800 | - | ||||||
| Total operating expenses | $ | 170,170 | $ | 39,630 | ||||
| Loss from Operations | $ | (74,761 | ) | $ | (30,623 | ) | ||
| Other Income | ||||||||
| Interest Income | 3 | 7 | ||||||
| Total Other Income | $ | 3 | $ | 7 | ||||
| Net Loss | $ | (74,758 | ) | $ | (30,616 | ) | ||
| Net Loss per Common Share – Basic & Diluted | $ | (0,02 | ) | $ | (0,01 | ) | ||
| Weighted Average Number of Common Shares Outstanding-Basic & Diluted | 4,818,083 | 4,004,205 | ||||||
See accompanying notes, which are an integral part of these financial statements.
F-3
STAGEWISE STRATEGIES CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
| Number of Common Stock | Additional | |||||||||||||||||||
| Shares | Amount $0.001 par value | Paid-in- Capital | Accumulated deficit | Total | ||||||||||||||||
| Balance as of September 30, 2023 | 4,000,000 | $ | 4,000 | $ | - | $ | (6,990 | ) | $ | (2,990 | ) | |||||||||
| Shares issued for cash | 134,000 | 134 | 3,886 | - | 4,020 | |||||||||||||||
| Net loss | - | - | - | (30,616 | ) | (30,615 | ) | |||||||||||||
| Balance as of September 30, 2024 | 4,134,000 | $ | 4,134 | $ | 3,886 | $ | (37,606 | ) | $ | (29,586 | ) | |||||||||
| Shares issued for cash | 910,334 | 910 | 26,400 | - | 27,310 | |||||||||||||||
| Net loss | - | - | - | (74,758 | ) | (74,758 | ) | |||||||||||||
| Balance as of September 30, 2025 | 5,044,334 | $ | 5,044 | $ | 30,286 | $ | (112,364 | ) | $ | (77,034 | ) | |||||||||
See accompanying notes, which are an integral part of these financial statements.
F-4
STAGEWISE STRATEGIES CORP.
STATEMENTS OF CASH FLOWS
| Year ended September 30, 2025 | Year ended September 30, 2024 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Loss | $ | (74,758 | ) | $ | (30,616 | ) | ||
| Adjustments to reconcile Net Loss to net cash provided by operations: | ||||||||
| Prepaid expenses | (8,078 | ) | - | |||||
| Accounts Payable | (4,901 | ) | (4,900 | ) | ||||
| Deferred revenue | 4,602 | 10,000 | ||||||
| Accumulated Depreciation | 34,635 | 13,299 | ||||||
| Net Cash used in Operating Activities | (48,500 | ) | (12,217 | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Intangible assets | (82,450 | ) | (88,900 | ) | ||||
| Net Cash used in Investing Activities | (82,450 | ) | (88,900 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from the Sale of Common Stock | 910 | 134 | ||||||
| Additional Paid-in Capital | 26,400 | 3,886 | ||||||
| Proceeds from Loan from Related Parties | 96,870 | 107,830 | ||||||
| Net Cash provided by Financing Activities | $ | 124,180 | $ | 111,850 | ||||
| Cash at beginning of period | 11,343 | 610 | ||||||
| Cash at end of period | $ | 4,573 | $ | 11,343 | ||||
| Net Change in cash for period | (6,770 | ) | 10,733 | |||||
| Supplemental Schedule of Cash Flow | ||||||||
| Information: Interest paid | $ | - | $ | - | ||||
| Income tax paid | $ | - | $ | - | ||||
See accompanying notes, which are an integral part of these financial statements.
F-5
STAGEWISE STRATEGIES CORP.
NOTES TO FINANCIAL STATEMENTS
As of September 30, 2025
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
StageWise Strategies Corp. (“Company”) was incorporated on July 03, 2023 under the laws of Nevada. We specialize in delivering comprehensive search engine optimization (SEO) services aimed at increasing online visibility and improving organic search performance for businesses across a wide range of industries. By utilizing advanced data analytics and proprietary algorithms, we offer tailored keyword research and implementation strategies to effectively promote clients’ products and services in the digital marketplace.
Our service offers an intelligent approach to website promotion, emphasizing a strong online presence for entrepreneurs. Our aim is to provide accessible tools for success, including trials for users to explore the service benefits. We present three monthly subscription plans: Basic, Standard, and Premium, each with expanding functionality and request allowances.
Our subscription-based API tool is tailored to provide a significantly expanded quota of queries. This enhancement elevates the quality of business development strategies, delivering advantages for entrepreneurs managing multiple concurrent projects. Users have the capability to export the acquired keywords, facilitating their utilization in content creation, search engine optimization, contextual advertising, or any other relevant applications.
Our website (https://stagewise.net/) emphasizes an extensive database. This database contains answers to a wide range of questions related to business promotion, as well as various scenarios for the realization of business projects. Using free version of our website clients gain one-attempt search trial per day that can assist them with 15 most useful keywords and provide a descriptive guidance on a daily basis.
Our platform allows entrepreneurs to maintain a comprehensive focus on all their projects, regardless of their stage, whether they are startups or well-established businesses. With the assistance of our platform’s tips and guidance, entrepreneurs can systematically promote each project, ensuring a high-quality approach every step of the way.
Our company offers a powerful and user-friendly service that assists entrepreneurs in promoting their businesses. By leveraging CEO technology, our website provides invaluable keywords, comprehensive concise descriptions from a vast self-developed database of business promotion expertise. Through a paid subscription, entrepreneurs gain advanced search-based support with a specific number of monthly requests. Using our website, entrepreneurs effectively manage multiple projects, receive expert guidance, and connect with professional executors for each new idea.
F-6
On May 1, 2025, we introduced the “AI Social Media Content Generator” API on our website. This API enables the effortless creation of platform-specific social media posts for Instagram, Facebook, Twitter, LinkedIn, TikTok, and other platforms. Optimized for maximum engagement, the API provides SEO-friendly content tailored to meet each platform’s unique formatting and algorithmic preferences. Designed to deliver real-time updates, it generates posts that reflect the latest social media trends, supporting brands in increasing their visibility and fostering viral engagement. This AI-powered solution represents a significant expansion of the Company’s service offerings in the area of digital marketing and content automation.
NOTE 2 - GOING CONCERN
The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, the Company had generated $95,409 of revenue and incurred a net loss $74,758 for the year ended September 30, 2025. Additionally, the Company is reporting an accumulated deficit of $112,364 as of September 30, 2025. These factors indicate that the Company continues as a going concern.
The Company’s capacity to operate as a going concern is reliant on its ability to generate profitable operations in the future and/or secure the required funding to meet its obligations and settle liabilities resulting from standard business operations when they become due. Management plans to increase sales but is prepared to finance operating expenses, if necessary, from cash on hand, as well as loans from directors and/or private placements of common stock.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company has adopted a September 30 fiscal year-end.
Fair Value of Financial Instruments
The Company’s financial instruments consist of Current Assets in the form of intangible assets and Current Liabilities in the form of Related Party Loan. The carrying amounts of these financial instruments approximates fair value because of the short period of time between the origination of such instruments and their expected realization.
F-7
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. As September 30, 2025 the Company had cash equivalents in total $4,573.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
Revenue
In accordance with ASC 606, revenue is measured based on a consideration specified with a customer and recognized when we satisfy the performance obligation specified with a customer. The Company is providing API subscriptions on identifying and analyzing keywords for search engine optimization purposes.
For the year ended September 30, 2025 and 2024, we generated total revenue of $95,409 and $9,007, respectively.
As of September 30, 2025 and 2024 the Company reported deferred revenue of $14,602 and $10,000, respectively.
Accounts receivable was $0 as of September 30, 2025 and 2024.
F-8
Net Income (Loss) per Common Share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Recent Accounting Pronouncements
The Company’s management has evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position and results of operations.
NOTE 4 - COMMON STOCK
Upon formation, the total number of shares of all classes of stock which the Company is authorized to issue is seventy-five million (75,000,000) shares of Common Stock, par value $0.001 per share.
During the year ended September 30, 2025, the Company completed its offering pursuant to its Registration Statement on Form S-1 declared effective by the SEC on May 10, 2024 (the “Offering”). In connection with the Offering, the Company issued 910,334 shares of common stock for cash proceeds at $0.03 per share for a total of $27,310. In aggregate, there were 1,044,334 shares issued pursuant to the Offering, which closed on February 13, 2025, resulting in total gross proceeds of approximately $31,330.
During the year ended September 30, 2024, the Company issued 134,000 shares of common stock pursuant to the Offering for cash proceeds at $0.03 per share for a total of $4,020.
There were 5,044,334 and 4,134,000 shares of common stock issued and outstanding as of September 30, 2025 and 2024, respectively.
F-9
NOTE 5 - RELATED PARTY TRANSACTIONS
To support the Company’s financial needs, it may receive advances from related parties until it can sustain its operations or secure sufficient funding through the sale of its equity or traditional debt financing.
On July 4, 2023, the Company entered into an interest-free loan agreement with Yuliia Zaporozhan, the Company’s former Chief Executive Officer and former director. According to this agreement, Ms. Zaporozhan provided financial support to the Company, as needed, up to a total of $90,000 over the period of five years. On November 22, 2024, Agreement on the Assignment of Rights was executed between the Company, Viktor Balan, and Yulia Zaporozhan. Viktor Balan, who at that time served as the Company’s Director and Treasurer (and subsequently assumed the roles of President, Secretary, and CEO following Yulia Zaporozhan’s departure), paid Yulia Zaporozhan $136,050, representing the full outstanding balance of the debt owed by the Company to Yulia Zaporozhan. In consideration for this payment, Yulia Zaporozhan irrevocably assigned, transferred, and set over to Viktor Balan all of Yulia Zaporozhan’s right, and title to the debt. This assignment effectively transferred the debt obligation from Yulia Zaporozhan to Viktor Balan.
In connection with such assignment, on November 25, 2024, the Company entered into a new loan agreement with Mr. Balan pursuant to which Mr. Balan agreed to provide the Company with a non-interest-bearing loan facility in the principal amount of up to $200,000 for working capital purposes. The loan agreement was amended, resulting in an increase in the principal amount on April 01, 2025 increased the facility amount to its current value of $350,000. Loan is for working capital purposes and is interest-free, and has no fixed payment terms other than the maturity date of March 31, 2030. As of September 30, 2025, the outstanding balance owed by the Company to Viktor Balan under the amended loan agreement was $218,700.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company was not subject to any legal proceedings from the period March 29, 2023 (Inception) to September 30, 2025, and no legal proceedings are currently pending or threatened to the best of our knowledge.
NOTE 7 - INTANGIBLE ASSET
The Company accounts for its intangible assets in accordance with ASC 350-40, “Internal-Use Computer Software - Computer Software Developed or Obtained for Internal Use,” and ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC 350-40 requires assets to be carried at the cost of developing the asset and requires that an intangible asset be amortized over its useful life and that the useful life be assessed at each reporting period to determine whether events or circumstances require a revision of the remaining useful life. If the useful life estimates changes, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life.
The Company owns the following intangible assets: a website and API software. The Company capitalized $70,400 in website development costs, amortized over five years. Website development occurred between August 2023 and February 2024.
Between September 2024 and April 2025, the Company developed the Social Media Content Generator AI API and capitalized $129,750 in development costs. The capitalized costs are amortized on a straight-line basis over five years.
Total intangible assets as of June 30, 2025 were $200,150.
Amortization expense for the year ended September 30, 2025 was $34,635. Accumulated amortization as of September 30, 2025 was $47,934.
F-10
Intangible assets amounts are as follows:
| Website Development | API Development | Total | ||||||||||
| Estimated Useful Life (Years) | 5 | 5 | ||||||||||
| Total Cost of the Asset | $ | 70,400 | $ | 129,750 | $ | 200,150 | ||||||
| Accumulated Amortization at September 30, 2025 | (26,739 | ) | (21,195 | ) | (47,934 | ) | ||||||
| Net Book Value at September 30, 2025 | $ | 43,661 | $ | 108,555 | $ | 152,216 | ||||||
| Amortization Expense for year ended September 30, 2025 | $ | 13,440 | $ | 21,195 | $ | 34,635 | ||||||
NOTE 8 - FOREIGN CURRENCY
As a result of the Company’s management operating in Europe, some of the Company’s transactions occurred in Euros. However, due to the little variance in the foreign currency translation rate in the period under audit, there were no gains or losses recorded to either other comprehensive income or net income.
NOTE 9 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10), the Company has analyzed its operations subsequent to September 30, 2025, and has determined that it does not have any material subsequent events to disclose in these financial statements.
F-11
Exhibit 99.2
STAGEWISE STRATEGIES CORP.
BALANCE SHEETS
| As of June 30, 2026 (Unaudited) | As of September 30, 2025 (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 44,485 | 4,573 | ||||||
| Total Current Assets | $ | 44,485 | $ | 4,573 | ||||
| Other Assets | ||||||||
| Intangible Assets, net | 121,872 | 152,216 | ||||||
| Prepaid expenses | 8,250 | 8,078 | ||||||
| Total Other Assets | $ | 130,122 | $ | 160,294 | ||||
| TOTAL ASSETS | $ | 174,607 | $ | 164,867 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities | ||||||||
| Accounts Payable | - | 8,599 | ||||||
| Deferred revenue | - | 14,602 | ||||||
| Loan from Related Parties | - | 218,700 | ||||||
| Deposit for Common Stock | 44,500 | - | ||||||
| Total Current Liabilities | $ | 44,500 | $ | 241,901 | ||||
| Total Liabilities | $ | 44,500 | $ | 241,901 | ||||
| Stockholders’ Equity | ||||||||
| Common Stock, $0.001 par value, 75,000,000 shares authorized, 4,044,334 shares issued and outstanding as of June 30, 2026 and 5,044,334 as of September 30, 2025 | 4,044 | 5,044 | ||||||
| Additional Paid-in Capital | 251,597 | 30,286 | ||||||
| Accumulated Deficit | (125,534 | ) | (112,364 | ) | ||||
| Total Stockholders’ Equity | $ | 130,107 | $ | (77,034 | ) | |||
| TOTAL LIABILITIES & STOCKHOLDER’S EQUITY | $ | 174,607 | $ | 164,867 | ||||
See accompanying notes to the unaudited condensed financial statements.
F-1
STAGEWISE STRATEGIES CORP.
STATEMENTS OF OPERATIONS (Unaudited)
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | Nine months ended June 30, 2026 | Nine months ended June 30, 2025 | |||||||||||||
| Revenue | $ | 11,307 | $ | 8,196 | $ | 55,774 | $ | 77,886 | ||||||||
| Gross Profit | $ | 11,307 | $ | 8,196 | $ | 55,774 | $ | 77,886 | ||||||||
| Operating Expenses | ||||||||||||||||
| Office rent | 142 | 442 | 353 | 542 | ||||||||||||
| Office Expenses | 160 | - | 160 | - | ||||||||||||
| Postage and Delivery | - | - | - | - | ||||||||||||
| Bank Service Charges | 16 | 88 | 24 | 361 | ||||||||||||
| Business Licenses and Permits | - | - | 150 | 200 | ||||||||||||
| Dues & Subscriptions | - | 30 | - | 30 | ||||||||||||
| Website CRO expenses | - | 9,000 | - | 9,000 | ||||||||||||
| Depreciation Expense | 10,114 | 9,924 | 30,344 | 23,692 | ||||||||||||
| Professional Fees | 8,358 | 22,953 | 37,836 | 42,452 | ||||||||||||
| SEO Services | - | 4,251 | 803 | 9,919 | ||||||||||||
| Marketing Services | - | 8,748 | 4,568 | 20,412 | ||||||||||||
| Server Lease | - | 2,800 | 2,707 | 5,600 | ||||||||||||
| Website and API Expenses | - | - | 4,000 | - | ||||||||||||
| Website Technical Support (refund) | - | 3,000 | (12,000 | ) | 3,000 | |||||||||||
| Total operating expenses | $ | 18,790 | $ | 61,236 | $ | 68,944 | $ | 115,208 | ||||||||
| Loss from Operations | $ | (7,483 | ) | $ | (53,040 | ) | $ | (13,170 | ) | $ | (37,322 | ) | ||||
| Other Income (Expense) | ||||||||||||||||
| Interest Income | - | - | - | 3 | ||||||||||||
| Total Other Income | $ | - | $ | - | $ | - | $ | 3 | ||||||||
| Net Loss | $ | (7,483 | ) | $ | (53,040 | ) | $ | (13,170 | ) | $ | (37,319 | ) | ||||
| Net Loss per Common Share – Basic & Diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
| Weighted Average Number of Common Shares Outstanding-Basic & Diluted | 4,044,334 | 5,044,334 | 4,352,027 | 4,734,839 | ||||||||||||
See accompanying notes to the unaudited condensed financial statements.
F-2
STAGEWISE STRATEGIES CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Number of common stock | Additional | |||||||||||||||||||
| Shares | Amount $0.001 par value | Paid-in- Capital | Accumulated deficit | Total | ||||||||||||||||
| Balance as of September 30, 2024 | 4,134,000 | $ | 4,134 | $ | 3,886 | $ | (37,606 | ) | $ | (29,586 | ) | |||||||||
| Shares issued for cash | 509,667 | 510 | 14,780 | - | 15,290 | |||||||||||||||
| Net income | - | - | - | 27,700 | 27,700 | |||||||||||||||
| Balance as of December 31, 2024 | 4,643,667 | $ | 4,644 | $ | 18,666 | $ | (9,906 | ) | $ | 13,404 | ||||||||||
| Shares issued for cash | 400,667 | 400 | 11,620 | - | 12,020 | |||||||||||||||
| Net loss | - | - | - | (11,980 | ) | (11,980 | ) | |||||||||||||
| Balance as of March 31, 2025 | 5,044,334 | $ | 5,044 | $ | 30,286 | $ | (21,886 | ) | $ | 13,444 | ||||||||||
| Shares issued for cash | - | - | - | - | - | |||||||||||||||
| Net loss | - | - | - | (53,040 | ) | (53,040 | ) | |||||||||||||
| Balance as of June 30, 2025 | 5,044,334 | $ | 5,044 | $ | 30,286 | $ | (74,925 | ) | $ | (39,595 | ) | |||||||||
| Balance as of September 30, 2025 | 5,044,334 | $ | 5,044 | $ | 30,286 | $ | (112,364 | ) | $ | (77,034 | ) | |||||||||
| Shares Cancelled | (1,000,000 | ) | (1,000 | ) | 1,000 | - | - | |||||||||||||
| Net loss | - | - | - | (14,243 | ) | (14,243 | ) | |||||||||||||
| Balance as of December 31, 2025 | 4,044,334 | $ | 4,044 | $ | 31,286 | $ | (126,607 | ) | $ | (91,277 | ) | |||||||||
| Shares issued for cash | - | - | - | - | - | |||||||||||||||
| Net income | - | - | - | 8,556 | 8,556 | |||||||||||||||
| Balance as of March 31, 2026 | 4,044,334 | $ | 4,044 | $ | 31,286 | $ | (118,051 | ) | $ | (82,721 | ) | |||||||||
| Shareholder Contribution for Repayment of Loan from Related Parties | - | - | 220,311 | - | 220,311 | |||||||||||||||
| Net Loss | - | - | - | (7,483 | ) | (7,483 | ) | |||||||||||||
| Balance as of June 30, 2026 | 4,044,334 | $ | 4,044 | $ | 251,597 | $ | (125,534 | ) | $ | 130,107 | ||||||||||
See accompanying notes to the unaudited condensed financial statements.
F-3
STAGEWISE STRATEGIES CORP.
STATEMENTS OF CASH FLOWS
| Nine months ended June 30, 2026 | Nine months ended June 30, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Loss | $ | (13,170 | ) | $ | (37,319 | ) | ||
| Adjustments to reconcile Net Income to net cash provided by operations: | ||||||||
| Prepaid expenses | (172 | ) | (30,345 | ) | ||||
| Accounts payable | (8,599 | ) | (4,901 | ) | ||||
| Deferred revenue | (14,602 | ) | 8,028 | |||||
| Deposit for common stock | 44,500 | - | ||||||
| Amortization expense | 30,344 | 23,692 | ||||||
| Net cash provided by (used in) Operating Activities | $ | 38,301 | $ | (40,845 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Intangible assets | - | (82,450 | ) | |||||
| Net cash provided by (used in) Investing Activities | $ | - | $ | (82,450 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from the Sale of Common Stock | - | 910 | ||||||
| Additional Paid-in Capital | - | 26,400 | ||||||
| Proceeds from Loan from Related Parties | 13,611 | 84,870 | ||||||
| Repayment to Loan from Related Parties | (12,000 | ) | - | |||||
| Net cash provided by Financing Activities | $ | 1,611 | $ | 112,180 | ||||
| Cash at beginning of period | $ | 4,573 | $ | 11,343 | ||||
| Cash at end of period | $ | 44,485 | $ | 228 | ||||
| Net cash increase (decrease) for period | $ | 39,912 | $ | (11,115 | ) | |||
| Supplemental Non-Cash Investing and Financing Activities | ||||||||
| Repayment of Loan from Related Parties | 220,311 | - | ||||||
See accompanying notes to the unaudited condensed financial statements.
F-4
STAGEWISE STRATEGIES CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2026
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
StageWise Strategies Corp. (“Company”) was incorporated on July 03, 2023 under the laws of Nevada. We specialize in delivering comprehensive search engine optimization (SEO) services aimed at increasing online visibility and improving organic search performance for businesses across a wide range of industries. By utilizing advanced data analytics and proprietary algorithms, we offer tailored keyword research and implementation strategies to effectively promote clients’ products and services in the digital marketplace.
Our service offers an intelligent approach to website promotion, emphasizing a strong online presence for entrepreneurs. Our aim is to provide accessible tools for success, including trials for users to explore the service benefits. We present three monthly subscription plans: Basic, Standard, and Premium, each with expanding functionality and request allowances.
Our subscription-based API tool is tailored to provide a significantly expanded quota of queries. This enhancement elevates the quality of business development strategies, delivering advantages for entrepreneurs managing multiple concurrent projects. Users have the capability to export the acquired keywords, facilitating their utilization in content creation, search engine optimization, contextual advertising, or any other relevant applications.
Our website (https://stagewise.net/) emphasizes an extensive database. This database contains answers to a wide range of questions related to business promotion, as well as various scenarios for the realization of business projects. Using free version of our website clients gain one-attempt search trial per day that can assist them with 15 most useful keywords and provide a descriptive guidance on a daily basis.
Our platform allows entrepreneurs to maintain a comprehensive focus on all their projects, regardless of their stage, whether they are startups or well-established businesses. With the assistance of our platform’s tips and guidance, entrepreneurs can systematically promote each project, ensuring a high-quality approach every step of the way.
Our company offers a powerful and user-friendly service that assists entrepreneurs in promoting their businesses. By leveraging CEO technology, our website provides invaluable keywords, comprehensive concise descriptions from a vast self-developed database of business promotion expertise. Through a paid subscription, entrepreneurs gain advanced search-based support with a specific number of monthly requests. Using our website, entrepreneurs effectively manage multiple projects, receive expert guidance, and connect with professional executors for each new idea.
Our website also features an “AI-Powered Social Media Content Generator” API. API enables the effortless creation of platform-specific social media posts for Instagram, Facebook, Twitter, LinkedIn, TikTok, and other platforms. Optimized for maximum engagement, the API provides SEO-friendly content tailored to meet each platform’s unique formatting and algorithmic preferences. Designed to deliver real-time updates, it generates posts that reflect the latest social media trends, supporting brands in increasing their visibility and fostering viral engagement. This AI-powered solution represents a significant expansion of the Company’s service offerings in the area of digital marketing.
NOTE 2 – GOING CONCERN
The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, the Company had generated $55,774 of revenue and net loss of $13,170 for the nine months ended June 30, 2026. Additionally, the Company is reporting accumulated deficit of $125,534 as of June 30, 2026. These factors indicate that the Company continues as a going concern.
The Company’s capacity to operate as a going concern is reliant on its ability to generate profitable operations in the future and/or secure the required funding to meet its obligations and settle liabilities resulting from standard business operations when they become due. Management plans to increase sales but is prepared to finance operating expenses, if necessary, from cash on hand, as well as loans from directors and/or private placements of common stock.
F-5
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company has adopted a September 30 fiscal year-end.
Fair Value of Financial Instruments
The Company’s financial instruments consist of Current Assets in the form of intangible assets and Current Liabilities in the form of Related Party Loan. The carrying amounts of these financial instruments approximates fair value because of the short period of time between the origination of such instruments and their expected realization.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. As of June 30, 2026, the Company held $44,485 in cash equivalents.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
F-6
Revenue
In accordance with ASC 606, revenue is measured based on a consideration specified with a customer and recognized when we satisfy the performance obligation specified with a customer. The Company is providing API subscriptions on identifying and analyzing keywords for search engine optimization purposes.
For the nine months ended June 30, 2026 and 2025, we generated total revenue of $55,774 and $77,886, respectively.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Recent Accounting Pronouncements
The Company’s management has evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position and results of operations.
NOTE 4 – COMMON STOCK
Upon formation, the total number of shares of all classes of stock which the Company is authorized to issue is seventy-five million (75,000,000) shares of Common Stock, par value $0.001 per share.
On December 23, 2025, the Company entered into a Stock Cancellation Agreement (the “Agreement”) with Victor Balan, the Company’s President, Secretary, Treasurer, Director and Chief Executive Officer. Pursuant to the Agreement, Victor Balan voluntarily surrendered 1,000,000 shares of the Company’s common stock for cancellation, without receiving any cash or other consideration in exchange.
As a result of the cancellation, Victor Balan beneficially owned 1,000,000 shares of common stock, which he subsequently sold to Jakhongir Abidovich Artikkhodjaev on June 5, 2026 in connection with the change in control.
During the nine months ended June 30, 2026, the Company issued no shares of common stock. On June 30, 2026, the Company entered into a Share Subscription Agreement with Jakhongir Abidovich Artikkhodjaev, the Company’s controlling shareholder, pursuant to which the Subscriber agreed to purchase 1,000,000 shares of common stock for an aggregate purchase price of $250,000. As of June 30, 2026, the Company had received a portion of the purchase price amounting to US$44,500, which was recorded as an advance payment for ordinary shares. As of June 30, 2026, the Company had 4,044,334 shares issued and outstanding.
F-7
NOTE 5 – RELATED PARTY TRANSACTIONS
To support the Company’s financial needs, it may receive advances from related parties until it can sustain its operations or secure sufficient funding through the sale of its equity or traditional debt financing.
Related Party Loan
On November 25, 2024, the Company entered into a Loan Agreement with Victor Balan, who served as the Company’s President, Director, Treasurer, Secretary, and CEO. Under this agreement, Mr. Balan agreed to provide the Company with a non-interest-bearing, fully secured loan in the amount of $200,000. This loan replaced the debt previously assigned to him by the former officer and director of the Company. On April 1, 2025, the loan agreement was amended, increasing the facility amount to $350,000. The loan was for working capital purposes, was interest-free, and had no fixed payment terms other than the maturity date of March 31, 2030. As of June 30, 2026, the outstanding balance owed by the Company to Victor Balan under the amended loan agreement was $0, following the execution of the Share Subscription Agreement on June 5, 2026 which required the payment of the related party loan.
Change in Control
On June 5, 2026, Jakhongir Abidovich Artikkhodjaev completed the purchase of 3,000,000 shares of common stock of the Company, consisting of 1,000,000 shares purchased from Victor Balan for $250,000 and 2,000,000 shares purchased from Yuliia Zaporozhan for $500,000, pursuant to separate Securities Purchase Agreements dated June 5, 2026. The aggregate purchase price of $750,000 was paid in cash by the Purchaser using his personal funds; no funds of the Company were involved in these transactions. As a result, the Purchaser acquired a controlling interest in the Company.
Executive Officers & Board of Directors
In connection with the change of control, Viktor Balan resigned from his positions as President, Secretary, Treasurer, Chief Executive Officer and a member of the Board of Directors of the Company (the “Board”), and Alarcon Martinez Marcelo Ramon and Anna Toczko each resigned as a member of the Board, each effective as of June 5, 2026.
Also effective as of June 5, 2026, the Board appointed Elmurod Sopiev, as Chief Executive Officer of the Company and Temur Zokirov, as Chief Financial Officer and Secretary of the Company.
The Board also appointed Mr. Zokirov, as Chairman of the Board, Bahtiyor Kadirov, as an independent director on the Board, and Elina Davidyan, as an independent director on the Board to fill the vacancies created by the foregoing resignations.
There are no family relationships between any of our newly appointed officers and directors, and there are no transactions in which any of such officers or directors has an interest requiring disclosure under Item 404(a) of Regulations S-K. There is no arrangement or understanding between any of the newly appointed officers or directors and any other person pursuant to which he or she was appointed as an officer or director of the Company.
Capital Contribution and Share Subscription
On June 30, 2026, the Company received a payment of $44,500 from Jakhongir Abidovich Artikkhodjaev toward the $250,000 purchase price under the Share Subscription Agreement. This amount is recorded as a Deposit for Common Stock as of June 30, 2026.
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The Company was not subject to any legal proceedings from the period July 03, 2023 (Inception) to June 30, 2026, and no legal proceedings are currently pending or threatened to the best of our knowledge.
F-8
NOTE 7 – INTANGIBLE ASSET
The Company accounts for its intangible assets in accordance with ASC 350-40, “Internal-Use Computer Software - Computer Software Developed or Obtained for Internal Use,” and ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC 350-40 requires assets to be carried at the cost of developing the asset and requires that an intangible asset be amortized over its useful life and that the useful life be assessed at each reporting period to determine whether events or circumstances require a revision of the remaining useful life. If the useful life estimates changes, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life.
The Company owns the following intangible assets: a website and API software. The Company capitalized $70,400 in website development costs, amortized over five years. Website development occurred between August 2023 and February 2024.
Between September 2024 and April 2025, the Company developed the Social Media Content Generator AI API and capitalized $129,750 in development costs. The capitalized costs are amortized on a straight-line basis over five years.
Total intangible assets as of June 30, 2026 were $121,872. Amortization expense for the nine months ended June 30, 2026 was $30,344.
NOTE 8 – FOREIGN CURRENCY
As a result of the Company’s management operating in Europe, some of the Company’s transactions occurred in Euros. However, due to the little variance in the foreign currency translation rate in the period under audit, there were no gains or losses recorded to either other comprehensive income or net income.
NOTE 9 – SUBSEQUENT EVENTS
On July 17, 2026, pursuant to the Subscription Agreement, the Company issued and sold to Jakhongir Abidovich Artikkhodjaev 1,000,000 shares of the Company’s Common Stock upon receipt of the remaining $205,500 of $250,000 purchase price.
F-9
Exhibit 99.3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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|
MAIN
OFFICE
133-10 39TH Avenue Flushing, NY 11354 Tel. (718) 445-6308 Fax. (718) 445-6760
CALIFORNIA OFFICE 440 E Huntington Drive Suite 300 Arcadia, CA 91006 Tel. (626) 282-1630 Fax. (626) 282-9726
BEIJING OFFICE 11/F North Tower Beijing Kerry Centre 1 Guanghua Road Chaoyang District Beijing, 100020, PRC Tel (86 10) 65997923 Fax. (86 10) 65999100 |
To the Board of Directors and Shareholders of “TEG SPV” LLC
Opinion on the Combined Financial Statements
We have audited the accompanying combined balance sheets of “TEG SPV” LLC and subsidiaries (the “Group”) as of December 31, 2025 and 2024, and the related combined statements of operations and comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “combined financial statements”). In our opinion, the combined financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These combined financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the Group’s combined financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Wei, Wei & Co., LLP
We have served as the Group’s auditors since 2025. Flushing, New York August 3, 2026 |
F-1
TEG SPV GROUP
Combined Balance Sheets
(All dollar amounts are in thousands)
| December 31, | ||||||||||||
| Note | 2025 | 2024 | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 1,718 | $ | 1,038 | ||||||||
| Inventories | 290 | 437 | ||||||||||
| Due from related parties | 22 | 26,962 | 948 | |||||||||
| Accounts receivable (net of allowance for credit losses of $390 and $152, respectively) | 6 | 3,860 | 1,099 | |||||||||
| Notes receivable (net of allowance for credit losses of $68 and $79, respectively) | 7 | 5,022 | 6,502 | |||||||||
| Prepaid expenses and other current assets | 8 | 1,667 | 3,064 | |||||||||
| Long-lived asset held for sale | 14 | - | 16,802 | |||||||||
| Total current assets | 39,519 | 29,890 | ||||||||||
| Non-current assets: | ||||||||||||
| Due from related parties | 22 | - | 195 | |||||||||
| Deferred income tax assets | 18 | 46 | 645 | |||||||||
| Property and equipment, net | 9 | 95,593 | 115,301 | |||||||||
| Total non-current assets | 95,639 | 116,141 | ||||||||||
| TOTAL ASSETS | $ | 135,158 | $ | 146,031 | ||||||||
The accompanying notes are an integral part of these combined financial statements.
F-2
TEG SPV GROUP
Combined Balance Sheets (Continued)
(All dollar amounts are in thousands)
| December 31, | ||||||||||
| Note | 2025 | 2024 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Due to related parties | 22 | $ | 1,840 | $ | 1,964 | |||||
| Accounts payable and other liabilities | 10 | 2,278 | 2,501 | |||||||
| Contract liabilities | 11 | 2,502 | 2,280 | |||||||
| Income taxes payable | 3,406 | 1,286 | ||||||||
| Other taxes payable | 12 | 1,022 | 342 | |||||||
| Current maturities of loans payable | 13 | 14,705 | 8,569 | |||||||
| Advance received | 14 | - | 18,818 | |||||||
| Total current liabilities | 25,753 | 35,760 | ||||||||
| Non-current liabilities: | ||||||||||
| Accounts payable and other liabilities | 10 | 254 | 292 | |||||||
| Loans payable | 13 | 20,481 | 30,677 | |||||||
| Deferred income tax liabilities | 18 | 2 | 87 | |||||||
| Total non-current liabilities | 20,737 | 31,056 | ||||||||
| TOTAL LIABILITIES | $ | 46,490 | $ | 66,816 | ||||||
| Commitments and contingencies | 19 | |||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||
| Contributed capital | 15 | 82,298 | 82,536 | |||||||
| Retained earnings | 5,049 | 1,413 | ||||||||
| Currency translation adjustment | 1,321 | (4,734 | ) | |||||||
| TOTAL SHAREHOLDERS’ EQUITY | 88,668 | 79,215 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 135,158 | $ | 146,031 | ||||||
The accompanying notes are an integral part of these combined financial statements.
F-3
TEG SPV GROUP
Combined Statements of Operations and Comprehensive Income
(All dollar amounts are in thousands)
| Note | 2025 | 2024 | ||||||||
| Revenue | 2 | $ | 42,910 | $ | 35,173 | |||||
| Cost of sales | 16 | (20,807 | ) | (18,117 | ) | |||||
| Gross profit | 22,103 | 17,056 | ||||||||
| Selling, general and administrative expenses | 17 | (3,055 | ) | (3,338 | ) | |||||
| Provision for bad debts, net | 6,7,22 | (369 | ) | (4 | ) | |||||
| Loss on classification as held for sale | 14 | - | (1,340 | ) | ||||||
| Other operating expenses, net | (1,232 | ) | (1,005 | ) | ||||||
| Operating income | 17,447 | 11,369 | ||||||||
| Interest income | 998 | 274 | ||||||||
| Interest expense | (2,928 | ) | (3,134 | ) | ||||||
| Other expenses, net | (1,086 | ) | (724 | ) | ||||||
| Net foreign exchange gain/(loss) | 2,434 | (2,034 | ) | |||||||
| Income before income taxes | 16,865 | 5,751 | ||||||||
| Income tax expense | 18 | (2,501 | ) | (1,199 | ) | |||||
| Net income | $ | 14,364 | $ | 4,552 | ||||||
| Other comprehensive income, net of tax : | ||||||||||
| Currency translation difference | 6,055 | (3,554 | ) | |||||||
| Other comprehensive income, net of tax : | 6,055 | (3,554 | ) | |||||||
| Comprehensive income | $ | 20,419 | $ | 998 | ||||||
The accompanying notes are an integral part of these combined financial statements.
F-4
TEG SPV GROUP
Combined
Statements of Changes in Shareholders’ Equity
(All dollar amounts are in thousands)
| Note | Contributed capital |
Retained earnings |
Currency translation adjustment |
Total shareholders’ equity |
||||||||||||||
| Balance at January 1, 2024 | $ | 71,973 | $ | 3,746 | $ | (1,180 | ) | $ | 74,539 | |||||||||
| Net income | - | 4,552 | - | 4,552 | ||||||||||||||
| Owner distributions | 15 | - | (6,885 | ) | - | (6,885 | ) | |||||||||||
| Effect of combining the Group’s other entities | 10,563 | - | - | 10,563 | ||||||||||||||
| Currency translation difference | - | - | (3,554 | ) | (3,554 | ) | ||||||||||||
| Balance at December 31, 2024 | 82,536 | 1,413 | (4,734 | ) | 79,215 | |||||||||||||
| Net income | - | 14,364 | - | 14,364 | ||||||||||||||
| Owner distributions | 15 | - | (10,728 | ) | - | (10,728 | ) | |||||||||||
| Effect of combining the Group’s other entities | (238 | ) | - | - | (238 | ) | ||||||||||||
| Currency translation difference | - | - | 6,055 | 6,055 | ||||||||||||||
| Balance at December 31, 2025 | $ | 82,298 | $ | 5,049 | $ | 1,321 | $ | 88,668 | ||||||||||
The accompanying notes are an integral part of these combined financial statements.
F-5
TEG SPV GROUP
Combined
Statements of Cash Flows
(All dollar amounts are in thousands)
| Years Ended December 31, | ||||||||||
| Note | 2025 | 2024 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net income | $ | 14,364 | $ | 4,552 | ||||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||||||||
| Depreciation of property and equipment | 9 | 3,995 | 3,806 | |||||||
| Provision for bad debts, net | 6,7,22 | 369 | 4 | |||||||
| Gain on disposal of property and equipment | (21 | ) | (47 | ) | ||||||
| Loss on classification as held for sale | 14 | - | 1,340 | |||||||
| Interest income | (998 | ) | (274 | ) | ||||||
| Interest expense | 2,928 | 3,134 | ||||||||
| Net foreign exchange (gain)/loss | (2,434 | ) | 2,034 | |||||||
| Deferred income taxes | 18 | 531 | (175 | ) | ||||||
| Initial discount on notes receivable | 7 | 1,108 | 724 | |||||||
| Other non-cash expenses | 1,115 | 827 | ||||||||
| Changes in working capital, net of effects | ||||||||||
| Accounts receivable, net | (2,763 | ) | (656 | ) | ||||||
| Inventories | 172 | (110 | ) | |||||||
| Prepaid expenses and other current assets | 768 | (1,396 | ) | |||||||
| Interest receivable | 858 | 59 | ||||||||
| Accounts payable and other liabilities | (5,878 | ) | (5,286 | ) | ||||||
| Contract liabilities | 166 | 1,249 | ||||||||
| Advance received | 14 | (2,016 | ) | 2,016 | ||||||
| Other taxes payable | 625 | 212 | ||||||||
| Income tax payable | 1,936 | 1,300 | ||||||||
| Net cash provided by operating activities | 14,825 | 13,313 | ||||||||
| Cash flows from investing activities | ||||||||||
| Purchases of property and equipment | (793 | ) | (24,971 | ) | ||||||
| Proceeds from sales of property and equipment | 9 | 16,324 | 367 | |||||||
| Refund of construction advances made | 9 | 4,667 | - | |||||||
| Advance received for long-lived asset held for sale | 14 | - | 16,802 | |||||||
| Originations of notes receivable | (22,062 | ) | (9,776 | ) | ||||||
| Proceeds from collections of notes receivable | 2,656 | 1,333 | ||||||||
| Net cash provided by/(used in) investing activities | 792 | (16,245 | ) | |||||||
| Cash flows from financing activities | ||||||||||
| Proceeds from loans payable | - | 71 | ||||||||
| Repayment of loans payable | (4,205 | ) | (2,167 | ) | ||||||
| Return
of capital)/capital contributions to the Group’s other entities | (296 | ) | 11,701 | |||||||
| Owner distributions | 15 | (10,346 | ) | (6,885 | ) | |||||
| Net cash (used in)/provided by financing activities | (14,847 | ) | 2,720 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (90 | ) | 309 | |||||||
| Net increase in cash and cash equivalents | 680 | 97 | ||||||||
| Cash and cash equivalents, beginning of period | 1,038 | 941 | ||||||||
| Cash and cash equivalents, end of period | $ | 1,718 | $ | 1,038 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||
Cash payments during the year for | ||||||||||
| Income taxes | (34 | ) | (74 | ) | ||||||
| Interest, net of capitalized interest | (2,912 | ) | (3,954 | ) | ||||||
F-6
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 1. | Group Structure and Common Control Reorganization |
TEG SPV LLC is the holding company of TEG SPV Group (the “Group”). It is registered at 64/2 Mahtumquli Street, Yashnobod District, Tashkent.
The holding company is wholly owned by TOURISM AND ENTERTAINMENT GROUP LLC (the “parent company”) and WELLMORE LLC. Both the parent company and WELLMORE LLC are controlled by the same ultimate beneficial owner, Mr. Jakhongir Abidovich Artikkhodjaev, a citizen of the Republic of Uzbekistan (the “UBO”).
The Group operates three core businesses in the Republic of Uzbekistan, comprising two hotels and one exhibition center. During the fourth quarter of 2025, the Group underwent a legal restructuring involving the establishment of TEG SPV LLC as a holding company, together with the creation of two new subsidiaries, with the objective of bringing the Group under a unified holding structure. As part of this restructuring, one hotel operating entity (Hilton Tashkent) was transferred to the holding company. In addition, the primary real estate assets of the other two operating businesses were transferred to the newly established subsidiaries. The restructuring was substantially completed in 2026 (see Note 23).
Following the completion, the Group’s legal structure and principal activities will be as follows:
| Group principal businesses | Legal entities | Date of incorporation | Principal activities |
| Holding company | TEG SPV LLC | October 2025 | Strategic management, coordination of subsidiaries and holding of investments in operating entities |
| Hilton Tashkent | AKFA DREAM WORLD LLC (“ADW”) | December 2017 | Full-service five-star hotel providing accommodation, food and beverage services, events and ancillary hospitality services under the Hilton brand |
| Wyndham hotel | CULTURAL LANDMARK HOTEL LLC | December 2025 | Full-service four-star hotel providing accommodation, food and beverage services, events and ancillary hospitality services under the Wyndham brand |
| CAEX exhibition center | CAEX LLC | December 2025 | Exhibition and events venue, providing rental of exhibition space and related event organization and support services |
| 2. | Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation. The accompanying combined financial statements and related notes of the Group were prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). All necessary adjustments were made to present fairly, in all material respects, the financial position, results of operations, and cash flows of the Group for all periods presented.
Principles of Combination. These combined financial statements have been prepared to present the financial position, results of operations and cash flows of entities that are under common control of the UBO as if they had operated as a single economic reporting entity. The combination is presented in accordance with GAAP, applying consolidation principles by analogy, as there was no single legal parent entity, that directly controlled all entities included in the Group, during 2024 and 2025.
F-7
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
The financial information of the Group entities has been combined on a line-by-line basis. All intercompany balances and transactions between the Group entities, including intercompany revenues, expenses and other intra-group transfers, have been eliminated in full upon combination. Where necessary, adjustments have been made to ensure consistent accounting policies across all entities included in the combined financial statements. Transactions between entities under common control have been reflected at their carrying amounts at the date of transfer. No step-up to fair value has been recognized in relation to assets or liabilities transferred between entities under common control.
The combined financial statements do not necessarily represent the financial position, results of operations or cash flows of the Group on a stand-alone consolidated legal basis and may not be indicative of future performance following the substantial completion of the restructuring in June 2026 and its operation under its current legal structure. Subsequent to December 31, 2025, as part of the Group’s restructuring, certain payables to a related party under common control of the Group’s UBO, but outside the Group, were effectively settled through a capital contribution of $41,062 thousand from the Group’s parent company. Accordingly, the contribution has been reflected retrospectively within contributed capital as if it had occurred on January 1, 2024 (see Note 23).
The combined financial statements were prepared on a historical cost basis. Financial assets and financial liabilities are measured at amortized cost under GAAP.
Use of Estimates and Assumptions. The preparation of the combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the useful lives of long-lived assets, uncertain tax positions and the allowance for expected credit losses.
Foreign Currency Translation and Transactions. The determination of functional currency is based on the criteria set forth in ASC 830, Foreign Currency Matters. The functional currency of each entity within the Group is the Uzbek Soum (“UZS”), which reflects the primary economic environment in which the entities of the Group generate and expend cash. The Group’s reporting currency is U.S. dollar (“$”).
Transactions denominated in currencies other than the functional currency (primarily $ and EUR) are recorded at the exchange rates prevailing on the dates of the transactions. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are measured at the exchange rate in effect at the respective reporting date. All gains and losses arising from foreign currency transactions are recorded in the combined statement of operations and comprehensive income during the year in which they occur.
The results and financial position of the Group are translated into the reporting currency as follows:
| (i) | assets and liabilities for each balance sheet are translated at the closing rate at the end of the respective reporting period; | |
| (ii) | income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); | |
| (iii) | components of equity are translated at the historic rate; and | |
| (iv) | all resulting exchange differences are recognized as foreign currency translation adjustment in other comprehensive income. |
On 31 December 2025, the principal rate of exchange used for translating foreign currency balances was $ 1 = UZS 12,025.33 (December 31, 2024: $ 1 = UZS 12,920.48). During 2025, the principal average rate of exchange used for translating income and expenses was $ 1 = UZS 12,574.55 (2024: $1 = UZS 12,651.54).
Fair Value of Financial Instruments. Under ASC 820, Fair Value Measurement (ASC 820), “fair value” is defined as the price that would be received for the sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date.
F-8
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
Cash and Cash Equivalents. Cash and cash equivalents include cash on hand and in various bank accounts, and all short-term investments with an original maturity of three months or less.
The Group maintains cash and cash equivalents with various financial institutions in the Republic of Uzbekistan. The Group’s policy is designed to limit exposure to any one institution. The Group performs periodic evaluations of the relative credit standing of those financial institutions as part of its investment strategy.
Accounts Receivable and Other Receivables. Accounts receivable primarily represent amounts due from hotel guests for room occupancy and related services. Accounts receivable also include, among other items, receivables from tenants leasing space in hotel and non-hotel properties.
The Group generally provides credit terms of 15 to 30 days from the invoice date, depending on customer type and contractual arrangements. Credit is extended only to approved customers based on an evaluation of their financial condition, historical payment performance and expected future business volume. Accounts receivable are recorded at the invoiced amount, net of an allowance for expected credit losses. The allowance for expected credit losses is estimated based on historical loss experience, current conditions and reasonable and supportable forecasts of future economic conditions.
All accounts receivable are unsecured, and the Group does not obtain collateral.
Other receivables include short-term balances arising from various operating activities, including rent receivables, interest receivable, claims and other amounts due from miscellaneous debtors.
Notes Receivable. Notes receivable are financial assets measured at amortized cost. They are initially recognized at the amount funded, net of any loan origination costs or fees.
Notes receivable are subsequently measured at amortized cost using the effective interest method. Any difference between the initial carrying amount and the contractual cash flows (including discounts or premiums arising on initial recognition) is recognized in profit or loss over the term of the note as interest income.
The Group recognizes an allowance for expected credit losses on notes receivable in accordance with ASC 326, based on historical experience, current conditions, and reasonable and supportable forecasts of future economic conditions.
Concentrations of Credit Risk. The Group currently conducts all of its operations in the Republic of Uzbekistan. Accordingly, the Group’s business, financial condition and results of operations are influenced by the political, economic and legal environment in Uzbekistan, including changes in governmental policies, taxation, currency regulation and other regulatory developments.
Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable (including receivables from related parties) and advances to suppliers. The Group extends credit to certain customers in the normal course of business. While a portion of revenue is generated through credit sales, concentrations of credit risk in accounts receivable are limited due to generally short payment terms. The Group performs ongoing credit evaluations of its customers to further mitigate credit risk.
Inventory. Inventories consist primarily of food and beverage items used in the Group’s hospitality operations. Inventory is stated at the lower of cost or net realizable value (“NRV”) and is accounted for using the first-in, first-out method. NRV represents the estimated selling price in the ordinary course of business, less costs to sell.
F-9
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
The Group evaluates inventories for potential impairment based on factors, such as spoilage, obsolescence, damage and expected selling prices. When the cost of inventory exceeds its NRV, the inventory is written down to NRV, and the resulting loss is recognized in the period incurred. Such write-downs are not subsequently reversed.
Prepaid Expenses and Other Current Assets. Prepaid expenses and other current assets include payments made in advance for goods and services to be received in future periods, including supplier advances, insurance, rent, service contracts, supplies, recoverable taxes and other short-term receivables. These amounts are initially recorded at historical cost and are expensed over the period in which the related economic benefits are consumed, consistent with the matching principle. Prepaid expenses are classified as current when expected to be utilized within twelve months or the normal operating cycle, and otherwise classified as non-current. Advances related to property and equipment are recorded within property and equipment. Prepaid balances are reviewed for impairment and written off when it is determined that future economic benefits are no longer probable.
Property and Equipment. Property and equipment are recorded at cost. Costs of improvements that extend the useful life, increase capacity or improve service potential of an asset are capitalized. Costs for normal repairs and maintenance are expensed as incurred.
Depreciation begins when the asset is available for its intended use. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows:
| Useful life in years | ||
| Buildings and improvements | 30 to 60 years | |
| Equipment | 3 to 13 years | |
| Furniture and fixtures | 3 to 13 years | |
| Other | 3 to 13 years |
The estimation of useful lives of property and equipment involves judgment and is based on management’s experience with similar assets. The future economic benefits of these assets are consumed primarily through use; however, factors such as technical or commercial obsolescence and physical deterioration may also reduce the economic benefits expected to be derived from the assets.
Management reviews the useful lives of assets based on their current technical condition and the expected period over which the assets are anticipated to generate economic benefits for the Group. Key factors considered include:
| (a) | the expected pattern of use of the assets; |
| (b) | expected physical wear and tear, which depends on operating conditions and maintenance programs; and |
| (c) | technical or commercial obsolescence arising from changes in market or industry conditions. |
Subsequent expenditure is capitalized only when it is probable that future economic benefits will flow to the Group and the cost can be reliably measured.
Property and equipment are derecognized upon disposal or when no future economic benefits are expected, and the difference between disposal proceeds and carrying amount is recognized in profit or loss within other income or expense.
F-10
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
Impairment of Long-Lived Assets. Impairment of long-lived assets is assessed whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability is first assessed by comparing the carrying amount of the asset or asset group with the estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds the undiscounted cash flows, the asset is considered not recoverable and an impairment loss is recognized. The impairment loss is measured as the excess of the carrying amount over the asset’s fair value, which is generally determined using discounted cash flow techniques or other valuation methods. Following recognition of an impairment loss, the adjusted carrying amount becomes the new cost basis and is depreciated over the remaining useful life. The Group periodically reviews the estimated useful lives of its long-lived assets to ensure they remain appropriate based on renovation requirements, maintenance practices and brand standards. Long-lived assets classified as held for sale are measured in accordance with the lower of carrying amount or fair value less costs to sell.
Accounts Payable and Other Liabilities. Accounts payable are recognized when the Group receives goods or services from a counterparty in accordance with the terms of the underlying arrangement. Accounts payable are initially recorded at the invoiced amount, which approximates their transaction price at recognition. Accounts payable are subsequently measured at amortized cost when a significant financing component exists; otherwise, they are carried at their invoiced amount. Accounts payable are derecognized when the related obligation is settled, cancelled or otherwise legally extinguished.
Accrued expenses and other liabilities primarily consist of royalty accruals, accrued employee salaries, utilities and other operating expenses incurred but not yet invoiced.
Contract Liabilities. Contract liabilities represent the Group’s obligation to transfer goods or services to a customer for which consideration has been received in advance or is otherwise due prior to revenue recognition. These primarily include advance deposits received for hotel accommodations, food and beverage services, event services and rental of facilities and office spaces.
Contract liabilities are recognized when:
| ● | cash is received in advance of performance, or | |
| ● | amounts billed exceed revenue recognized based on satisfaction of performance obligations. |
Revenue is recognized from contract liabilities when (or as) the related performance obligations are satisfied, which generally occurs over the duration of a guest stay, event period or rental term.
Advance deposits may be refundable or non-refundable depending on contractual terms. Refundable deposits are generally returned upon cancellation within the specified cancellation period. Non-refundable deposits are recognized as revenue when the related services are provided or when the Group’s right to consideration becomes unconditional in accordance with ASC 606.
Unsatisfied performance obligations. The Group has elected the practical expedient under ASC 606 for contracts with an original expected duration of one year or less. Due to the short-term nature of its contracts, which primarily consist of hotel accommodations, events and related services, the Group’s remaining performance obligations are generally expected to be satisfied within 12 months. Accordingly, the Group does not disclose quantitative information about remaining performance obligations for these contracts.
Loans Payable. Loans payable are financial liabilities measured at amortized cost. They are initially recognized at the proceeds received, net of directly attributable debt issuance costs. Debt issuance costs are amortized to interest expense over the term of the related borrowings using the effective interest method.
F-11
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
If the Group violates a covenant under a loan agreement at or before the reporting date, and the violation gives the lender the right to demand repayment on demand, the related liability is classified as current, even if the lender waives the breach after the reporting date but before the combined financial statements are issued. This is because, at the reporting date, the Group does not have an unconditional right to defer settlement for at least twelve months after that date.
Loans payable are derecognized when the obligation is extinguished, i.e., when the contractual obligation is discharged, cancelled or expires.
Commitments and Contingencies. The Group enters into various contractual arrangements in the normal course of operating its hotel and exhibition properties. These commitments include, but are not limited to, non-cancelable purchase agreements for food and beverage supplies and operating materials; utility, maintenance, cleaning, security, and facility management contracts; construction, renovation, and capital improvement contracts; and service contracts related to hotel management, franchise agreements, reservation and marketing systems, and exhibition and event operations. Such arrangements are not recognized in the combined financial statements until the related goods or services are received in accordance with ASC 440, Commitments.
The Group also evaluates loss contingencies in accordance with ASC 450, Contingencies, and recognizes a liability when a loss is probable and reasonably estimable, or discloses the nature and estimated range of possible loss when a loss is reasonably possible but not probable or cannot be reasonably estimated. Contingencies may arise from guest claims, employee matters, vendor and contractor disputes, tax and regulatory matters, and obligations arising from hotel and exhibition operations.
Financial Guarantees. In accordance with ASC 460, financial guarantee-related liability is not recognized when the Group issues a financial guarantee to a third party in respect of a loan obtained by the Group’s related party, which is outside of the Group but under the ultimate control of the same UBO.
Revenue Recognition. The Group recognizes revenue in accordance with ASC 606, when control of goods or services is transferred to customers, in an amount that reflects the consideration expected to be received. The Group’s contracts generally have short durations and do not include significant variable consideration, complex financing components or frequent contract modifications. Revenue is presented net of taxes collected on behalf of governmental authorities. Payments are typically received in advance or at the time services are rendered.
The Group offers discounted rates through established pricing programs, including for loyalty members, advance bookings, and customers meeting defined credit criteria. These discounts are customary, non-discretionary, and are accounted for as reductions of the transaction price, with revenue recognized net of such discounts. The impact of loyalty programs is not material to the Group’s combined financial statements.
F-12
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
Revenue is disaggregated by major revenue streams, as described in the table below:
| Major revenue streams | Revenue recognition | |
| Room (accommodation) | Room revenue relates to the provision of lodging services. Revenue is recognized over time, on a daily basis, as rooms are occupied. Where bookings include breakfast, the transaction price is allocated between lodging and breakfast based on the residual approach. For non-refundable bookings, revenue is recognized when the stay occurs or when cancellation or no-show rights lapse. Loyalty programs provide customers with a material right; therefore, a portion of the transaction price is deferred and recognized when points are redeemed or expire. | |
| Events | Events revenue includes venue rental and related services such as catering, equipment rental and event support services. These services are considered a single performance obligation and revenue is recognized over time, typically on a straight-line basis over the event period. | |
| Food and beverage | Food and beverage revenue includes restaurant, room service, minibar and bar sales. Revenue is recognized at a point in time when goods are delivered and services are rendered. | |
| Other services | Other services include laundry, spa, gym, parking and rental of facilities and office spaces. Revenue is generally recognized at a point in time when the service is rendered, except for services such as space rental, which is recognized over time as the customer simultaneously receives and consumes the benefits. |
| Years Ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Room (accommodation) | $ | 18,368 | $ | 18,949 | ||||
| Events | 14,231 | 9,356 | ||||||
| Food, beverage and other | 10,311 | 6,868 | ||||||
| Total revenue | $ | 42,910 | $ | 35,173 | ||||
Cost of Sales. Cost of sales primarily consists of expenses directly associated with providing hospitality services and managing the exhibition center. These costs include labor and related employee benefits for operational staff, food and beverage costs, guest supplies, laundry and cleaning services, depreciation, directly attributable taxes, royalty expenses, and other direct expenses incurred in delivering services. These costs are recognized as incurred in the period to which they relate.
Selling, General and Administrative Expenses (“SG&A”). SG&A expenses consist of costs not directly attributable to providing hospitality services or operating the exhibition center. These expenses include corporate and administrative salaries and related employee benefits, marketing and advertising costs, professional and consultancy fees, office and IT expenses, insurance and other general overhead costs. SG&A expenses are recognized as incurred in the period to which they relate.
Employee Benefits. Employee benefits comprise wages, salaries, contributions to Uzbekistan state pension and social insurance funds, paid annual and sick leave and bonuses. These costs are accrued in the year in which the Group’s employees render the associated services. The Group participates in a statutory defined contribution scheme and does not have any legal or constructive obligation to provide post-employment or other long-term employee benefits beyond the required statutory contributions.
F-13
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief operating decision maker (“CODM”), who is responsible for allocating resources and assessing the performance of the segments. The Group has identified its chief operating decision maker as the parent company’s Chief Executive Officer.
The Group evaluates performance and allocates resources based on discrete operating segments that generate revenues and incur expenses from providing hospitality services and managing the exhibition center. The Group’s reportable segments are determined based on the nature of services provided and the internal management structure used for decision-making.
Segment results include revenues and expenses directly attributable to each segment, as well as allocations of certain centrally managed costs where such allocations are reasonable and consistently applied. Unallocated items primarily include corporate-level administrative expenses, financing costs, and income taxes.
Allowance for Expected Credit Losses. The Group recognizes an allowance for expected credit losses on financial assets measured at amortized cost, including accounts receivable and notes receivable, in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”). The allowance represents management’s estimate of lifetime expected credit losses and is recorded as a contra-asset, reducing the amortized cost basis of the related financial assets.
Under the CECL model, expected credit losses are estimated over the contractual term of the financial asset, adjusted for expected prepayments when applicable. The estimate incorporates relevant information about past events, current conditions, and reasonable and supportable forecasts. Key factors considered include:
| ● | Segmentation of financial assets into pools with similar risk characteristics; |
| ● | Evaluation of individual exposures where risk characteristics are not shared with a pool; |
| ● | Historical credit loss experience; |
| ● | Current economic conditions; and |
| ● | Reasonable and supportable forecasts, including macroeconomic indicators such as GDP growth in Uzbekistan. |
For accounts receivable, the Group applies a provision matrix approach, whereby receivables are grouped into portfolios with similar risk characteristics (e.g., operating receivables and deferred sales of property) and stratified by aging categories. Historical loss rates are calculated for each aging bucket and adjusted to reflect current conditions and forward-looking information. These adjusted loss rates are applied to the corresponding aging categories to estimate expected credit losses. A receivable is considered past due when payment is not received within the contractual credit terms.
The Group generally assumes that defaulted accounts receivable will ultimately be collected, and therefore, the only economic loss associated with these balances relates to the time value of money arising from delayed settlement. Accordingly, to reflect the loss given default, the gross carrying amounts of accounts receivable in each aging bucket are discounted using the relevant interest rates published by the Central Bank of Uzbekistan. This approach captures the present-value impact of payment delays while recognizing that credit losses other than timing effects are not expected based on historical experience.
For notes receivable, the Group applies a CECL approach, incorporating counterparty-specific credit risk, past due status, credit quality indicators, and industry and geographic risk factors. Loss given default assumptions are based on available recovery data, including external benchmarks where appropriate.
Financial assets are written off when they are deemed uncollectible and all reasonable collection efforts have been exhausted. Write-offs are recorded against the allowance for expected credit losses. Recoveries of amounts previously written off are recognized in profit or loss when received.
The Group updates its estimate of expected credit losses at each reporting date using the best available information. Due to the use of forward-looking assumptions, including macroeconomic forecasts and customer payment behavior, actual results may differ from those estimates.
F-14
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 2. | Basis of Presentation and Summary of Significant Accounting Policies (Continued) |
In accordance with ASC 326-20-50-13, the Group discloses a roll forward of the allowance for credit losses, including the beginning balance, current-period provision, write-offs, recoveries, and ending balance. Because these inputs require management judgment and are inherently uncertain, changes in assumptions, particularly those related to economic conditions or customer payment patterns, may result in material adjustments to the allowance for credit losses in future periods. The Group updates its CECL estimates at each reporting date using the best available information.
Income
Taxes. The Group accounts for income taxes in accordance with ASC 740 Income Taxes. Income tax expense comprises current and
deferred tax. Income tax is recognized in the combined statement of operations, except to the extent it relates to items recognized directly
in equity or other comprehensive income.
Current income tax expense represents the amount of income taxes payable or recoverable in respect of the taxable profit or loss for
the current period, based on enacted tax rates and laws in the Republic of Uzbekistan where the Group operates.
Deferred income taxes are recognized using the asset and liability method for temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods when the temporary differences are expected to reverse. Deferred tax assets are recognized for deductible temporary differences, net operating loss carryforwards, and tax credit carryforwards, to the extent that it is more likely than not (a likelihood of greater than 50 percent) that taxable income will be available against which these amounts can be utilized.
A valuation allowance is established to reduce deferred tax assets to the amount that is more likely than not to be realized. The Group evaluates both positive and negative evidence, including historical results and projections of future taxable income, in assessing the need for a valuation allowance.
Deferred tax assets and liabilities are presented as non-current in the combined balance sheet and are offset when they relate to the
same tax jurisdiction.
Uncertain tax positions. The Group evaluates uncertain tax positions in accordance with the recognition and measurement guidance for income taxes. Tax positions are recognized only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. Recognized tax positions are measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. The Group recognizes interest and penalties related to uncertain tax positions, if any, within income tax expense.
F-15
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 3. | Recently Adopted Accounting Pronouncements |
In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance was issued in response to requests from investors for companies to disclose more information about their financial performance at the segment level. The ASU does not change how a public entity identifies its operating segments, aggregates them or applies the quantitative thresholds to determine its reportable segments. The standard requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis, and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that were previously required annually. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures previously required under ASC 280. The Group adopted the standard on the required effective date for the financial statements issued for the annual reporting periods beginning on January 1, 2024. The adoption of the new guidance did not have an impact on the Group’s combined financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The Group adopted the standard on the required effective date for the Group’s combined financial statements issued for annual reporting periods beginning on January 1, 2025. The adoption of this guidance did not have a material impact on the footnotes to the Group’s combined financial statements and had no impact on the Group’s combined financial statements.
In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements, Amendments to Remove References to the Concepts Statements. The Conceptual Framework establishes concepts that the FASB considers in developing standards. The ASU was issued to remove references to the Conceptual Framework in the Codification. The FASB noted that references to the Concepts Statements in the Codification could have implied that the Concepts Statements are authoritative. Also, some of the references removed were to Concepts Statements that are superseded. The Group adopted the standard on the required effective date beginning on January 1, 2025, using a prospective transition method for all new transactions recognized on or after the effective date. The adoption of this guidance did not have a material impact on the Group’s combined financial statements.
| 4. | New Accounting Pronouncements |
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard improves financial reporting and responds to investor input that additional expense detail is fundamental to understanding the performance of an entity, assessing its prospects for future cash flows, and comparing its performance over time and with that of other entities. The new guidance requires public business entities to disclose in the notes to financial statements specified information about certain costs and expenses at each interim and annual reporting period. Specified expenses, gains or losses that are already disclosed under existing U.S. GAAP will be required by the ASU to be included in the disaggregated income statement expense line item disclosures, and any remaining amounts will need to be described qualitatively. The new guidance will become effective for the Group’s combined financial statements issued for annual reporting periods beginning on January 1, 2027 and interim reporting periods beginning on January 1, 2028, will require either prospective or retrospective presentation, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Group’s combined financial statements.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The standard revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. The amendments differ from current U.S. GAAP because, for certain transactions, they replace the requirement that the primary beneficiary of a VIE is always the acquirer with an assessment that requires an entity to consider the factors to determine which entity is the accounting acquirer.
F-16
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 4. | New Accounting Pronouncements (Continued) |
Under the amendments, acquisition transactions in which the legal acquiree is a VIE will, in more instances, result in the same accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity.
The ASU does not change the accounting for a transaction determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting acquiree. The new guidance will become effective for interim and annual reporting periods beginning on January 1, 2027, will require a prospective transition method for business combinations that occur after the initial adoption date, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Group’s combined financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The guidance clarifies the current interim disclosure requirements and their applicability. The ASU is intended to address feedback from stakeholders that the current guidance is difficult to navigate. The amendments do not change the fundamental nature or expand or reduce the disclosure requirements of interim reporting. The ASU creates a comprehensive list of interim disclosures required under U.S. GAAP and incorporates a disclosure principle that requires disclosures at interim periods when an event or change that has a material effect on an entity has occurred since the previous year end. The new guidance will become effective for the Group beginning on January 1, 2028, can be adopted using either a prospective or retrospective method, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Group’s combined financial statements.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The guidance clarifies, corrects errors in or makes other improvements to a variety of topics in the Codification that are intended to make it easier to understand and apply. The amendments apply to all reporting entities in the scope of the affected accounting guidance. The new guidance will become effective for the Group beginning on January 1, 2027, can be adopted using either a prospective or retrospective method, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Group’s combined financial statements.
SEC Rule on Climate-Related Disclosures. In March 2024, the SEC adopted final rules relating to the Enhancement and Standardization of Climate-Related Disclosures for Investors, which would require registrants to provide climate-related disclosures in a note to their audited financial statements. The disclosures under the final rules would include certain effects of severe weather events and other natural conditions, including the aggregate amounts and where in the financial statements they are presented. If carbon offsets or renewable energy credits or certificates (“RECs”) are deemed a material component of the registrant’s plans to achieve its disclosed climate-related targets, registrants would be required to disclose information about the offsets and RECs. Registrants would also be required to disclose whether and how (1) exposures to risks and uncertainties associated with, or known impacts from, severe weather events and other natural conditions and (2) any disclosed climate-related targets or transition plans materially impacted the estimates and assumptions used in preparing the financial statements. Finally, registrants would be required to disclose additional contextual information about the above disclosures, including how each financial statement effect was derived and the accounting policy decisions made to calculate the effects, for the most recently completed fiscal year and, if previously disclosed or required to be disclosed, for the historical fiscal year for which audited combined financial statements are included in the filing. In April 2024, the SEC released an order staying the rules pending judicial review of all of the petitions challenging the rules, and in March 2025, the SEC voted to end its defense of the rules. Absent these developments, the rules would have been effective for the Group upon its registration under the Exchange Act on January 6, 2025, and phased in starting in 2027. Management is continuing to monitor the developments pertaining to the rules and any resulting potential impacts on the Group’s combined financial statements.
The Group’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Group’s combined financial statements.
F-17
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 5. | Segment Information |
The CODM is the Group’s parent company’s Chief Executive Officer, who, together with senior management, regularly reviews the operating results of the hospitality and exhibition segments. Segment performance is evaluated primarily based on segment revenues and operating results prepared in accordance with the Group’s internal accounting policies used for management reporting. The CODM uses these segment results to assess profitability and operating efficiency, compare performance across periods, determine annual operating budgets, approve capital expenditures and allocate financial and human resources between segments. Segment results are presented on the same basis as the information provided to the CODM. A reconciliation of total segment profit or loss to combined profit or loss prepared in accordance with GAAP is presented below.
The Group has identified two reportable segments, which reflect the manner in which the CODM evaluates performance and allocates resources. These segments are determined based on the nature of the Group’s services, the internal organizational structure and the distinct economic characteristics of each business activity as reflected in internal reporting provided to the CODM.
| ● | Hospitality — operation of two hotel properties and provision of related accommodation and guest services. |
| ● | Exhibition — operation of an exhibition center used for hosting international and domestic exhibitions and events. |
The hospitality segment comprises revenues from all four revenue streams, while the exhibition segment includes revenues from events and related services.
| Hospitality | Exhibition | Total | ||||||||||||||||||||||
| Years
Ended December 31, | Years
Ended December 31, | Years
Ended December 31, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| Revenue | $ | 35,913 | $ | 35,011 | $ | 7,022 | $ | 2,885 | $ | 42,935 | $ | 37,896 | ||||||||||||
| Cost of sales | (21,885 | ) | (17,706 | ) | - | - | (21,885 | ) | (17,706 | ) | ||||||||||||||
| Gross profit | 14,028 | 17,305 | 7,022 | 2,885 | 21,050 | 20,190 | ||||||||||||||||||
| Selling, general and administrative expenses | (3,395 | ) | (3,187 | ) | (1,465 | ) | (791 | ) | (4,860 | ) | (3,978 | ) | ||||||||||||
| Other operating income | 3,011 | 1,157 | 3 | - | 3,014 | 1,157 | ||||||||||||||||||
| Other operating expenses | (11,027 | ) | (9,054 | ) | (5,062 | ) | (2,606 | ) | (16,089 | ) | (11,660 | ) | ||||||||||||
| Operating income | 2,617 | 6,221 | 498 | (512 | ) | 3,115 | 5,709 | |||||||||||||||||
| Interest income | 276 | 3 | - | - | 276 | 3 | ||||||||||||||||||
| Interest expense | (2,792 | ) | (2,997 | ) | - | - | (2,792 | ) | (2,997 | ) | ||||||||||||||
| Net foreign exchange gain/(loss) | 2,416 | (1,869 | ) | 1 | (10 | ) | 2,417 | (1,879 | ) | |||||||||||||||
| Other | 23 | - | - | - | 23 | - | ||||||||||||||||||
| Income/(loss) before income taxes | 2,540 | 1,358 | 499 | (522 | ) | 3,039 | 836 | |||||||||||||||||
| Income tax expense | (24 | ) | (71 | ) | (77 | ) | - | (101 | ) | (71 | ) | |||||||||||||
| Net income/(loss) in accordance with local GAAP | $ | 2,516 | $ | 1,287 | $ | 422 | $ | (522 | ) | $ | 2,938 | $ | 765 | |||||||||||
F-18
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 5. | Segment Information (Continued) |
| Hospitality | Exhibition | Total | ||||||||||||||||||||||
| Years
Ended December 31, | Years
Ended December 31, | Years
Ended December 31, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| US GAAP adjustments not | ||||||||||||||||||||||||
| allocated to segments | ||||||||||||||||||||||||
| Revenue | $ | (25 | ) | $ | (2,723 | ) | $ | - | $ | - | $ | (25 | ) | $ | (2,723 | ) | ||||||||
| Cost of sales | 4,222 | 1,780 | (3,144 | ) | (2,191 | ) | 1,078 | (411 | ) | |||||||||||||||
| Selling, general and administrative expenses | 634 | 127 | 1,171 | 513 | 1,805 | 640 | ||||||||||||||||||
| Provision for bad debts, net | (369 | ) | (4 | ) | - | - | (369 | ) | (4 | ) | ||||||||||||||
| Loss on classification as held for sale | - | (1,340 | ) | - | - | - | (1,340 | ) | ||||||||||||||||
| Other operating expenses, net | 7,588 | 7,430 | 4,255 | 2,068 | 11,843 | 9,498 | ||||||||||||||||||
| Interest income | 722 | 271 | - | - | 722 | 271 | ||||||||||||||||||
| Interest expense | (136 | ) | (137 | ) | - | - | (136 | ) | (137 | ) | ||||||||||||||
| Other expenses, net | (1,109 | ) | (724 | ) | - | - | (1,109 | ) | (724 | ) | ||||||||||||||
| Net foreign exchange gain/(loss) | 17 | (155 | ) | - | - | 17 | (155 | ) | ||||||||||||||||
| Income tax expense | (1,840 | ) | (779 | ) | (560 | ) | (349 | ) | (2,400 | ) | (1,128 | ) | ||||||||||||
| Combined net income/(loss) in accordance with US GAAP | $ | 12,220 | $ | 5,033 | $ | 2,144 | $ | (481 | ) | $ | 14,364 | $ | 4,552 | |||||||||||
Hospitality segment. The hospitality segment comprises the hotel operations of AKFA DREAM WORLD LLC in Tashkent, operating under a franchise agreement with the Hilton brand, and CULTURAL LANDMARK HOTEL LLC in Bukhara, operating under a franchise agreement with the Wyndham brand. Both entities are wholly owned and managed locally, under the Parent’s oversight. The segment includes revenues and expenses related to room operations, food and beverage services, events, recreation, rental of hotel spaces and other hotel-related services.
Exhibition segment. The exhibition segment includes the activities of CAEX LLC, which manages commercial renting and organizes international and domestic exhibitions and events.
| 6. | Accounts Receivable, net |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Accounts receivable | $ | 4,250 | $ | 1,251 | ||||
| Less: allowance for credit losses | (390 | ) | (152 | ) | ||||
| Total accounts receivable, net | $ | 3,860 | $ | 1,099 | ||||
The following table shows the movements in the allowance for expected credit losses during the years ended December 31, 2025 and 2024:
| (in thousands) | 2025 | 2024 | ||||||
| Balance at beginning of year | $ | 152 | $ | 227 | ||||
| Provision for bad debts | 217 | 8 | ||||||
| Recoveries | - | (84 | ) | |||||
| Currency translation difference | 21 | 1 | ||||||
| Balance at end of year | $ | 390 | $ | 152 | ||||
F-19
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 7. | Notes Receivable |
As of December 31, 2025 and 2024, notes receivable consisted of the following:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| SKY EVENTS LLC (1) | $ | 5,061 | $ | 6,565 | ||||
| Other | 29 | 16 | ||||||
| Less: allowance for credit losses | (68 | ) | (79 | ) | ||||
| Total notes receivable, net | $ | 5,022 | $ | 6,502 | ||||
| (1) | During 2024–2025, the Group issued interest-free short-term notes receivable to SKY EVENTS LLC totaling $9,785 thousand, with maturity extended to December 31, 2026. The notes were initially recognized at the amount funded, net of any loan origination costs or fees, with subsequent modifications, resulting in day-one losses of $1,108 thousand and $724 thousand recognized in other expenses during 2025 and 2024, respectively. The discount is amortized as interest income over the term.
As of December 31, 2025, the carrying amount was $5,061 thousand compared to a face value of $6,214 thousand. Repayments of principal and interest during 2025 and 2024 amounted to $2,333 thousand and $1,285 thousand, respectively. |
The following table shows the movements in the allowance for expected credit losses during the years ended December 31, 2025 and 2024:
| (in thousands) | 2025 | 2024 | ||||||
| Balance at beginning of year | $ | 79 | $ | - | ||||
| Provision for bad debts | - | 80 | ||||||
| Recoveries | (16 | ) | - | |||||
| Currency translation difference | 5 | (1 | ) | |||||
| Balance at end of year | $ | 68 | $ | 79 | ||||
As of December 31, 2025, none of the Group’s notes receivable were past due.
| 8. | Prepaid Expenses and Other Current Assets |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Prepaid other taxes | $ | 645 | $ | 1,385 | ||||
| Advances to vendors | 423 | 341 | ||||||
| General operating supplies | 380 | 561 | ||||||
| Others | 219 | 777 | ||||||
| Total prepaid expenses and other current assets | $ | 1,667 | $ | 3,064 | ||||
F-20
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 9. | Property and Equipment, net |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Buildings and improvements | $ | 98,308 | $ | 105,132 | ||||
| Equipment | 4,947 | 4,483 | ||||||
| Furniture and fixtures | 6,645 | 6,113 | ||||||
| Other | 3,580 | 12,920 | ||||||
| 113,480 | 128,648 | |||||||
| Less: accumulated depreciation | (17,887 | ) | (13,347 | ) | ||||
| Total property and equipment, net | $ | 95,593 | $ | 115,301 | ||||
For the years ended December 31, 2025 and 2024, the Group recognized depreciation expense of $3,995 thousand and $3,806 thousand, respectively, in the combined statements of operations. Refer to Note 13 for information on the Group’s pledged property and equipment.
In 2025, proceeds from sale of property and equipment in the statements of cash flows primarily relate to the sale of two buildings to MILENIO LLC, a related party, for consideration of $16,279 thousand. During 2025 and 2024, additions from related parties amounted to $4,516 thousand and $17,568 thousand, respectively. Below is a detailed breakdown of additions from related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| DISCOVER INVEST LLC | $ | 4,516 | $ | 17,562 | ||||
| CENTRAL ASIAN UNIVERSITY LLC | - | 6 | ||||||
| Total additions from related parties | $ | 4,516 | $ | 17,568 | ||||
Additionally, during 2025, a refund of construction advances made amounting to $4,667 thousand was received from DISCOVER INVEST LLC.
| 10. | Accounts Payable and Other Liabilities |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current | ||||||||
| Accounts payable | $ | 1,709 | $ | 2,034 | ||||
| Accrued payroll and employee benefits | 419 | 335 | ||||||
| Other liabilities | 150 | 132 | ||||||
| Total accounts payable and other liabilities | $ | 2,278 | $ | 2,501 | ||||
| Non-current | ||||||||
| Long-term deferred income | 176 | 181 | ||||||
| Commission payable on borrowings | 78 | 111 | ||||||
| Total accounts payable and other liabilities | $ | 254 | $ | 292 | ||||
Long-term deferred income represents a long-term part of the year-end balance of an advance payment of $500 thousand received in 2020 by the Group under a licensing agreement with Hilton Global. The advance payment is amortized on a straight-line basis over 25 years. As the payment relates to future rights and services to be provided over the contract term, the unamortized balance is presented in the combined balance sheets until recognized in profit or loss within other income.
F-21
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 11. | Contract Liabilities |
The following table summarizes the activity of contract liabilities during the years ended December 31, 2025 and 2024:
| (in thousands) | 2025 | 2024 | ||||||
| Balance at beginning of year | $ | 2,295 | $ | 426 | ||||
| Increase due to consideration received in advance | 2,640 | 2,295 | ||||||
| Revenue recognized from beginning contract liabilities | (2,295 | ) | (426 | ) | ||||
| Balance at end of year | $ | 2,640 | $ | 2,295 | ||||
Contract liability balances as of December 31, 2025 and 2024, presented in the table above, include balances with related parties of $138 thousand and $15 thousand, respectively (see Note 22).
The Group estimates that the contract liabilities will be recognized as revenue within one month after the end of the respective reporting year. Advances from customers represent predominantly payments received for room, events and rentals.
| 12. | Other Taxes Payable |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| VAT payable | $ | 786 | $ | 243 | ||||
| Payroll tax payable | 66 | 10 | ||||||
| Other | 170 | 89 | ||||||
| Total other taxes payable | $ | 1,022 | $ | 342 | ||||
| 13. | Loans Payable |
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Loans from HBK | $ | 35,186 | $ | 39,246 | ||||
| Less: current maturities of loans payable | (14,705 | ) | (8,569 | ) | ||||
| Total loans payable | $ | 20,481 | $ | 30,677 | ||||
As of December 31, 2025, and 2024, loans payable consist of the loans from Halyk Bank of Kazakhstan (“HBK”), denominated in $, bearing interest at 7.5% p.a. and maturing on September 15, 2028.
In accordance with the loan agreements with HBK, the Group’s loans are secured by ADW’s property and equity interests in ADW, as disclosed in the following table:
(In thousands)
| December 31 | ||||||||||||||
| Lender | Borrower | Secured by | Nature of collateral | 2025 | 2024 | |||||||||
| HBK | ADW | Collateral | Building and property | $ | 50,271 | $ | 71,637 | |||||||
| HBK | ADW | Collateral | Share in AKFA DREAM WORLD LLC | 7,012 | 7,012 | |||||||||
F-22
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 13. | Loans Payable (Continued) |
As of December 31, 2025, the aggregate maturities for loans payable, assuming all extension options available in agreements are exercised, are as follows:
| Year | (in thousands) | |||
| 2026 | $ | 14,705 | ||
| 2027 | 10,239 | |||
| 2028 | 10,242 | |||
| Total loans payable | $ | 35,186 | ||
| 14. | Long-Lived Asset Held for Sale and Advance Received |
In December 2024, the Group received an advance consideration of $18,818 thousand inclusive of VAT of $2,016 thousand related to the planned sale of its administrative building (the “AKFA Office”).
As of December 31, 2024, the Group classified the AKFA Office as a disposal group held for sale in accordance with ASC 360-10-45-9. Accordingly, the asset was reclassified from property and equipment to long-lived assets held for sale.
The carrying amount of the AKFA Office of $18,142 thousand was written down to its fair value less costs to sell of $16,802 thousand resulting in a loss on classification as held for sale of $1,340 thousand recognized in profit or loss for 2024.
The sale of the AKFA Office was completed in March 2025.
| 15. | Contributed Capital |
TEG SPV LLC was established as the Group’s holding company in October 2025 with contributed capital of $43,287 thousand. On June 1, 2026, the parent company made a non-cash capital contribution of $41,062 thousand to TEG SPV LLC, increasing the holding company’s contributed capital to $84,349 thousand. For purposes of these combined financial statements, the holding company’s contributed capital has been presented retrospectively as if the current capital structure had been in place since January 1, 2024.
| (in thousands) | December
31, 2025 | |||
| TOURISM AND ENTERTAINMENT GROUP LLC | $ | 84,349 | ||
| WELLMORE LLC | 0 | |||
| Effect of combining the Group’s other entities | (238 | ) | ||
| Currency transaction difference | (1,813 | ) | ||
| Total contributed capital | $ | 82,298 | ||
The contributed capital is allocated to each legal entity based on its registered ownership interests. TOURISM AND ENTERTAINMENT GROUP LLC, as the parent, holds substantially all of the Group’s contributed capital, with WELLMORE LLC holding a nominal ownership interest to comply with local corporate law requirements.
From time to time, the Group pays expenses on behalf of the UBO. These amounts are recorded as owner distributions in the combined statements of changes in equity. During the years ended December 31, 2025 and 2024, owner distributions amounted to $10,728 thousand and $6,885 thousand, respectively. The 2025 distributions comprised cash distributions of $10,346 thousand and noncash distributions of $382 thousand.
F-23
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 16. | Cost of Sales |
| Years Ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Employee compensation and benefits | $ | 6,006 | $ | 5,150 | ||||
| Operating supplies and consumables | 4,891 | 4,731 | ||||||
| Depreciation expense | 3,870 | 3,510 | ||||||
| Taxes other than income tax | 2,140 | 1,019 | ||||||
| Royalty expense | 1,382 | 1,133 | ||||||
| Utilities expense | 1,099 | 1,179 | ||||||
| Other | 1,419 | 1,395 | ||||||
| Total cost of sales | $ | 20,807 | $ | 18,117 | ||||
| 17. | Selling, General and Administrative Expenses |
| Years Ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Employee compensation and benefits | $ | 1,398 | $ | 1,213 | ||||
| Advertising expense | 820 | 1,052 | ||||||
| Other taxes | 246 | 248 | ||||||
| Depreciation expense | 39 | 36 | ||||||
| Other | 552 | 789 | ||||||
| Total selling, general and administrative expenses | $ | 3,055 | $ | 3,338 | ||||
| 18. | Income Taxes |
| (a) | Components of income tax (expense) / benefit |
| Years Ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current tax expense | $ | (1,970 | ) | $ | (1,374 | ) | ||
| Deferred tax (expense)/ benefit | (531 | ) | 175 | |||||
| Income tax expense for the year | $ | (2,501 | ) | $ | (1,199 | ) | ||
F-24
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 18. | Income Taxes (Continued) |
| (b) | Income tax reconciliation |
The income tax rate applicable to the Group’s 2025 and 2024 income was 15%. A reconciliation between the theoretical and actual tax charges is provided below:
| Years Ended December 31, | ||||||||||||||||
| (in thousands) | % | 2025 | % | 2024 | ||||||||||||
| Income before income taxes | $ | 16,865 | $ | 5,751 | ||||||||||||
| Theoretical tax charge at statutory rate of Tax effect of items which are not deductible or assessable for taxation purposes: | 15 | % | (2,530 | ) | 15 | % | (863 | ) | ||||||||
| - Non-deductible expenses | 1 | % | (241 | ) | 7 | % | (391 | ) | ||||||||
| - Other | (2 | )% | 270 | (1 | )% | 55 | ||||||||||
| Income tax expense for the year | $ | (2,501 | ) | $ | (1,199 | ) | ||||||||||
Hilton Tashkent was granted an exemption from all types of taxes, including value-added tax and income tax, under a secret Presidential Decree issued in 2017 in relation to its construction and operation. The tax exemption was valid through 1 January 2025.
Hilton Tashkent commenced operations in late 2019 and began applying the tax incentive in 2020. Hilton Tashkent applied the value-added tax exemption available under the decree from the commencement of its operations; however, it did not apply the income tax exemption. This was due to the absence of taxable income and the existence of accumulated tax losses in the periods up to 2020. Under the general principles of Uzbek tax legislation, tax incentives granted by law or decree represent a right of the taxpayer rather than an obligation.
| (c) | Deferred taxes analyzed by type of temporary difference |
The Group measures and recognizes current income tax payable and the tax bases of assets and liabilities in accordance with the tax legislation of the Republic of Uzbekistan. The Group is subject to certain permanent tax differences arising from the non-deductibility of specific expenses and from certain types of income that are not subject to taxation. Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes.
F-25
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 18. | Income Taxes (Continued) |
Temporary differences as of December 31, 2025 and 2024, primarily relate to differences in the methods and timing of income and expense recognition, as well as temporary differences arising from differences in the tax bases of certain assets and liabilities. The tax effect of movements in these temporary differences is presented in detail below:
| (in thousands) | December 31, 2025 | (Charged)/ credited to profit or loss | Currency translation difference | December 31, 2025 | (Charged)/ credited to profit or loss | Currency translation difference | January 1, 2024 | |||||||||||||||||||||
| Tax effect of deductible/(taxable) temporary differences | ||||||||||||||||||||||||||||
| - Property and equipment, net | $ | (107 | ) | $ | (19 | ) | $ | (8 | ) | $ | (80 | ) | $ | (14 | ) | $ | 4 | $ | (70 | ) | ||||||||
| - Inventories | 49 | 10 | 3 | 36 | 6 | (1 | ) | 31 | ||||||||||||||||||||
| - Accounts receivable | (328 | ) | (346 | ) | (10 | ) | 28 | (37 | ) | (3 | ) | 69 | ||||||||||||||||
| - Notes receivable | 446 | 87 | 29 | 330 | 112 | (13 | ) | 231 | ||||||||||||||||||||
| - Prepaid expenses and other current assets | (46 | ) | (33 | ) | (2 | ) | (11 | ) | 19 | 1 | (31 | ) | ||||||||||||||||
| - Accounts payable and other liabilities | 35 | (1 | ) | (1 | ) | 37 | 27 | 2 | 8 | |||||||||||||||||||
| - Loans payable | (5 | ) | 17 | (1 | ) | (21 | ) | (40 | ) | - | 19 | |||||||||||||||||
| - Contract liabilities | - | (107 | ) | 3 | 104 | 102 | (3 | ) | 5 | |||||||||||||||||||
| - Recorded tax losses | - | (139 | ) | 4 | 135 | - | (7 | ) | 142 | |||||||||||||||||||
| Net deferred tax asset/(liability) | 44 | (531 | ) | 17 | 558 | 175 | (20 | ) | 404 | |||||||||||||||||||
| Recognized deferred tax asset | 530 | 114 | 17 | 670 | 266 | 7 | 505 | |||||||||||||||||||||
| Recognized deferred tax liability | (486 | ) | (645 | ) | - | (112 | ) | (91 | ) | (27 | ) | (101 | ) | |||||||||||||||
| Net deferred tax asset/(liability) | $ | 44 | $ | (531 | ) | $ | 17 | $ | 558 | $ | 175 | $ | (20 | ) | $ | 404 | ||||||||||||
| 19. | Commitments and Contingencies |
Financial guarantees. In March 2025, the Group guaranteed the obligations of a related party under a $100,000 thousand term facility agreement entered into with HBK. In addition, the Group repledged ADW’s same property, as disclosed in Note 13. The related party is under common control with the Group’s UBO but is not included within the Group. The Group does not receive consideration for issuing the guarantee and has no recourse against the related party in the event that any amounts are required to be paid under the arrangement.
Under the terms of the guarantee, the Group, together with certain other entities under common control, is jointly and severally liable in the event that the related party fails to meet its obligations under the facility. The guarantee remains in effect through December 31, 2031. The maximum potential future payments under the guarantee are $100,000 thousand, plus any accrued interest, fees and penalties under the terms of the facility.
No liability has been recognized in respect of this guarantee as of the inception date or at December 2025 in accordance with the Group’s accounting policy.
F-26
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 19. | Commitments and Contingencies (Continued) |
Tax contingencies. Tax, currency and customs legislation in Uzbekistan in effect at the reporting date is subject to varying interpretations and may be applied inconsistently by tax authorities. As a result, management’s interpretations of applicable legislation, including the application of tax incentives, withholding taxes, VAT matters and other tax regulations, as well as the supporting documentation maintained by the Group, may be challenged and positions taken by the Group may be subject to review, which could result in the assessment of additional taxes, penalties and interest.
Tax authorities may generally review tax filings for a period of three calendar years following the end of the tax period in which the liability arose; however, under certain circumstances, earlier periods may also be subject to examination.
Management evaluates uncertain tax positions in accordance with GAAP and recognizes the effect of tax positions only when such positions are more likely than not to be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. Management believes that its interpretation of applicable legislation, including administrative practices and precedents, is appropriate and that the Group’s tax positions will be sustained if examined and, accordingly, no provisions for uncertain tax positions have been recognized as of December 31, 2025 and 2024. Administrative practices and precedents represent situations in which a tax position could be considered a technical violation of tax law, but it is widely known, well understood, and a consistent practice of the taxing authority (with full knowledge of the position being taken) to nonetheless accept the position. Management does not expect the resolution of any potential tax examinations to have a material adverse effect on the Group’s financial position, results of operations and cash flows.
| 20. | Financial Risk Management |
The Group is exposed to financial, operational and legal risks arising in the normal course of business. Financial risks include market risk (comprising foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk. The primary objective of financial risk management is to establish appropriate risk limits and ensure ongoing compliance with those limits. Operational and legal risk management focuses on maintaining effective internal policies and procedures designed to mitigate such risks.
Concentration of credit risk and major customers. During 2025, revenue from customer, SKY EVENTS LLC represented approximately 12% ($5,031 thousand) of the Group’s total revenue. This revenue was generated within the hospitality segment.
As of December 31, 2025, SKY EVENTS LLC accounted for approximately 9% ($373 thousand) of the Group’s total accounts receivable and approximately 19% ($4,993 thousand) of total notes receivable.
The Group is exposed to concentration risk to the extent that a significant portion of its revenue and receivables is attributable to a single customer.
Exposure to currency risk. The Group is exposed to currency risk primarily due to:
| ● | Purchases of raw materials and equipment denominated in $ and EUR; |
| ● | $-denominated loans payable; |
Fluctuations in the UZS/$ and EUR exchange rates may materially affect the Group’s financial position and results of operations.
Management monitors currency risk through:
| ● | Regular assessment of foreign currency–denominated monetary assets and liabilities |
| ● | Forecasting of cash flows in foreign currencies |
| ● | Monitoring of macroeconomic developments in Uzbekistan |
| ● | Evaluation of natural hedges within the business model |
F-27
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 20. | Financial Risk Management (Continued) |
Foreign currency–denominated monetary assets and liabilities
As of December 31, 2025 and 2024, the Group’s monetary assets and liabilities denominated in foreign currencies were as follows:
| (in thousands) | Monetary financial assets | Monetary financial liabilities | Net exposure | |||||||||
| December 31, 2025 | ||||||||||||
| US Dollars | $ | 3,434 | $ | (35,848 | ) | $ | (32,414 | ) | ||||
| EURO | 7 | (152 | ) | (145 | ) | |||||||
| Total | $ | 3,441 | $ | (36,000 | ) | $ | (32,559 | ) | ||||
| December 31, 2024 | ||||||||||||
| US Dollars | 208 | (39,757 | ) | (39,549 | ) | |||||||
| EURO | 6 | (134 | ) | (128 | ) | |||||||
| Total | $ | 214 | $ | (39,891 | ) | $ | (39,677 | ) | ||||
Interest rate risk. Changes in interest rates primarily affect the Group’s loans payable and loans receivable, influencing their fair value (for fixed-rate instruments).
The Group does not maintain a formal policy regarding the proportion of fixed-rate versus variable-rate exposure. When entering into new loans payable or lending arrangements, management evaluates whether a fixed or variable rate is more advantageous over the expected term of the instrument.
As of December 31, 2025 and 2024, the Group did not have financial assets or liabilities with variable interest rates.
Credit risk. Credit risk represents the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises from accounts receivable, other receivables, notes receivable and cash and cash equivalents. The maximum exposure to credit risk is represented by the carrying amounts of financial assets reported in the combined balance sheets.
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities as they fall due. The Group’s approach to liquidity management is to maintain sufficient liquidity to meet its obligations under both normal and stressed conditions without incurring unacceptable losses or damaging its reputation.
| 21. | Fair Value Disclosures |
The Group defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
| ● | Level 1 - Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access. |
| ● | Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
| ● | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. |
F-28
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 21. | Fair Value Disclosures (Continued) |
The Group has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.
The carrying amounts of the Group’s cash and cash equivalents, accounts receivable and notes receivable as well as accounts payable and other payables, loans payable approximate their fair values.
| 22. | Related Party Transactions and Balances |
The Group identifies related parties in accordance with ASC 850, including the parent company, entities under common control and key management personnel. Amounts due to or from related parties are recognized as receivables or payables and measured at their carrying amounts. The Group discloses the nature of the relationship, the types and amounts of transactions, and outstanding balances.
Parties are considered related if one party controls, is controlled by, or is under common control with the other party, or has significant influence over the other party. Related party relationships are evaluated based on the substance of the relationship rather than solely its legal form.
The major related parties and their relationship with the Group, and the nature of their services provided to the Group, are summarized as follows:
| Individual / entity name | Relationship with the Group | Major transactions with the Group | ||
| Mr. Jakhongir Abidovich Artikkhodjaev | UBO | Capital contribution, dividend distribution. | ||
| TOURISM AND ENTERTAINMENT GROUP LLC | Parent company | Loans issued | ||
| DISCOVER INVEST LLC | Entity under the common control | Construction of buildings, purchase and sale of vehicles | ||
| ADW-INTERNATIONAL CONGRESS HALL LLC | Entity under the common control | Loans issued | ||
| MULTINATIONAL MINE GROUP FE LLC | Entity under the common control | Loans issued | ||
| ARTEL ELECTRONICS LLC | Entity under the common control | Hospitality | ||
| MILLIY BOG XIZMATI LLC | Entity under the common control | Hospitality | ||
| ARTEL ELECTRONICS MANUFACTURING LLC | Entity under the common control | Hospitality | ||
| ARTEL SUPPORT LLC | Entity under the common control | Hospitality | ||
| CITIZEN TRAVEL LLC | Entity under the common control | Hospitality | ||
| RESTORAN N LLC | Entity under the common control | Hospitality | ||
| ENERGO POINT PRO LLC | Entity under the common control | Hospitality | ||
| AURUM GLOBAL GROUP FE LLC | Entity under the common control | Loans issued | ||
| NEWEXPO LLC | Entity under the common control | Loans issued | ||
| MILENIO LLC | Entity under the common control | Loans issued, sales of buildings | ||
| J-UNITED GROUP LLC | Entity under the common control | Procurement | ||
| DURABLE BETON LLC | Entity under the common control | Construction of buildings, purchase and sale of vehicles | ||
| MACMERRY MANAGEMENT LP | Entity under the common control | Hospitality | ||
| OBOD SHAHAR QURISH LLC | Entity under the common control | Hospitality | ||
| ARTEL TECHNICAL SCHOOL LLC | Entity under the common control | Hospitality | ||
| EXCELLENT SWEETS STORE LLC | Entity under the common control | Hospitality | ||
| AKFA FOOD LLC | Entity under the common control | Hospitality | ||
| OCARD LLC | Entity under the common control | Hospitality | ||
| GREEN ZONE OF WORLD LLC | Entity under the common control | Hospitality |
F-29
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
| ARIA SUG’URTA LLC | Entity under the common control | Hospitality | ||
| CENTRAL ASIAN UNIVERSITY LLC | Entity under the common control | Hospitality | ||
| CAU EDUTAINMENT LLC | Entity under the common control | Hospitality | ||
| AKFA MEDLINE LLC | Entity under the common control | Hospitality | ||
| AKFA BUILDING MATERIALS LLC | Entity under the common control | Hospitality | ||
| ALVIERO LLC | Entity under the common control | Hospitality | ||
| SMART ILLUMINATION LLC | Entity under the common control | Hospitality | ||
| AKFA ALUMINIUM LLC | Entity under the common control | Purchase of construction materials | ||
| TELERADIOKOMPANIYA ZO’R LLC | Entity under the common control | Hospitality | ||
| CITYNET LLC | Entity under the common control | Hospitality | ||
| CHALET RESTORAN LLC | Entity under the common control | Hospitality | ||
| TEXNOGARANT LLC | Entity under the common control | Hospitality | ||
| VIVA UNIVERSAL LINE LLC | Entity under the common control | Hospitality | ||
| INSPO CARE LLC | Entity under the common control | Hospitality | ||
| MAROON TRADE LLC | Entity under the common control | Hospitality | ||
| ASIA STAR PLAZA LLC | Entity under the common control | Loans issued | ||
| ONE TEAM HOSPITALITY LLC | Entity under the common control | Hospitality | ||
| EKZOTELLA LLC | Entity under the common control | Hospitality | ||
| PROFI SOLUTIONS LLC | Entity under the common control | Hospitality | ||
| ROUTESTAR LOGISTICS LLC | Entity under the common control | Hospitality |
Balances with related parties consist of:
Due from related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current assets | ||||||||
| Accounts receivable | $ | 293 | $ | 56 | ||||
| Other receivables | 3,431 | 172 | ||||||
| Notes receivable (net of allowance for credit losses of $175 and $nil, respectively) | 21,791 | 700 | ||||||
| Prepaid expenses and other current assets | 1,447 | 20 | ||||||
| Total due from related parties | $ | 26,962 | $ | 948 | ||||
| Non-current assets | ||||||||
| Other receivables | - | 195 | ||||||
| Total due from related parties | - | $ | 195 | |||||
Below is a detailed breakdown of balances due from related parties:
Accounts receivable from related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| DISCOVER INVEST LLC | $ | 260 | $ | 3 | ||||
| MILLIY BOG XIZMATI LLC | 29 | 53 | ||||||
| CITIZEN TRAVEL LLC | 4 | - | ||||||
| Total accounts receivable from related parties | $ | 293 | $ | 56 | ||||
F-30
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
Other receivables from related parties – current portion:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| DISCOVER INVEST LLC | $ | 3,388 | $ | 164 | ||||
| RESTORAN N LLC | 39 | - | ||||||
| CENTRAL ASIAN UNIVERSITY LLC | 4 | 4 | ||||||
| ENERGO POINT PRO LLC | - | 4 | ||||||
| Total other receivables from related parties | $ | 3,431 | $ | 172 | ||||
Other receivables from related parties – non-current portion:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| DISCOVER INVEST LLC | - | $ | 195 | |||||
| Total other receivables from related parties | - | $ | 195 | |||||
As of December 31, 2024, due from related parties includes long-term other receivables from a related party with a carrying amount of $195 thousand, representing amounts due from DISCOVER INVEST LLC for machinery and equipment sold following the completion of the hotel’s construction phase, with settlement expected in 2026.
Notes receivable from related parties, net:
| December 31, | ||||||||||||
| (in thousands) | Maturity | % p.a | 2025 | 2024 | ||||||||
| AURUM GLOBAL GROUP FE LLC | Nov-26 | 14% | $ | 13,026 | $ | - | ||||||
| ADW-INTERNATIONAL CONGRESS HALL LLC | Dec-26 | 14% | 5,226 | 41 | ||||||||
| Notes receivable on behalf of owner | Dec-26 | Nil | 2,346 | 602 | ||||||||
| MULTINATIONAL MINE GROUP FE LLC | Dec-26 | 14% | 1,346 | - | ||||||||
| NEWEXPO LLC | Dec-26 | Nil | 15 | - | ||||||||
| ONE TEAM HOSPITALITY LLC | Dec-26 | Nil | 7 | 21 | ||||||||
| MILLIY BOG XIZMATI LLC | Apr-25 | Nil | - | 36 | ||||||||
| Less: allowance for credit losses | (175 | ) | - | |||||||||
| Total notes receivable from related parties, net | $ | 21,791 | $ | 700 | ||||||||
The following table shows the movements in the allowance for expected credit loss for notes receivable from related parties:
| (in thousands) | 2025 | |||
| Balance at beginning of year | - | |||
| Provision for bad debts | 168 | |||
| Currency translation difference | 7 | |||
| Balance at end of year | $ | 175 | ||
F-31
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
Prepaid expenses and other current assets from related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Prepayment on behalf of owner | $ | 1,208 | - | |||||
| TOURISM AND ENTERTAINMENT GROUP LLC | 180 | - | ||||||
| J-UNITED GROUP LLC | 30 | - | ||||||
| MILENIO LLC | 21 | 20 | ||||||
| ONE TEAM HOSPITALITY LLC | 8 | - | ||||||
| Total prepaid expenses and other current assets from related parties | $ | 1,447 | $ | 20 | ||||
Due to related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current liabilities | ||||||||
| Accounts payable and other liabilities | $ | 1,655 | $ | 1,833 | ||||
| Contract liabilities | 138 | 15 | ||||||
| Loans payable | 47 | 116 | ||||||
| Total due to related parties | $ | 1,840 | $ | 1,964 | ||||
Below is a detailed breakdown of balances due to related parties:
Accounts payable and other liabilities to related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| AKFA ASSEMBLY LLC | $ | 542 | $ | - | ||||
| AKFA BUILDING MATERIALS LLC | 446 | - | ||||||
| ARTEL ELECTRONICS MANUFACTURING LLC | 135 | - | ||||||
| MILENIO LLC | 124 | 231 | ||||||
| DISCOVER INVEST LLC | 91 | 1,354 | ||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | 69 | - | ||||||
| DURABLE BETON LLC | 63 | 59 | ||||||
| AKFA FOOD LLC | 50 | 2 | ||||||
| AKFA ALUMINIUM LLC | 40 | - | ||||||
| MACMERRY MANAGEMENT LP | 39 | 37 | ||||||
| OBOD SHAHAR QURISH LLC | 23 | 21 | ||||||
| ARTEL TECHNICAL SCHOOL LLC | 10 | 10 | ||||||
| EXCELLENT SWEETS STORE LLC | 9 | 8 | ||||||
| AKFA EXTRUSIONS LLC | 5 | - | ||||||
| EKZOTELLA LLC | 4 | - | ||||||
| MILLIY BOG XIZMATI LLC | 3 | 2 | ||||||
| PROFI SOLUTIONS LLC | 1 | - | ||||||
| OCARD LLC | 1 | - | ||||||
| OTHER | - | 109 | ||||||
| Total accounts payable and other liabilities to related parties | $ | 1,655 | $ | 1,833 | ||||
F-32
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
Contract liabilities with related parties:
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| ARIA SUGURTA LLC | $ | 122 | $ | - | ||||
| MILENIO LLC | 14 | 13 | ||||||
| DISCOVER INVEST LLC | 2 | 1 | ||||||
| OTHER | - | 1 | ||||||
| Total contract liabilities with related parties | $ | 138 | $ | 15 | ||||
Loans payable to related parties:
| December 31, | ||||||||||||
| (in thousands) | Maturity | % p.a | 2025 | 2024 | ||||||||
| ASIA STAR PLAZA LLC | Dec-26 | Nil | $ | 19 | $ | 18 | ||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | Dec-26 | Nil | - | 69 | ||||||||
| Loans payable on behalf of owner | Dec-26 | Nil | 28 | 29 | ||||||||
| Total loans payable to related parties | $ | 47 | $ | 116 | ||||||||
Revenue from related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| CITIZEN TRAVEL LLC | $ | 59 | $ | 58 | ||||
| CENTRAL ASIAN UNIVERSITY LLC | 53 | 3 | ||||||
| CAU EDUTAINMENT LLC | 32 | 43 | ||||||
| RESTORAN N LLC | 30 | - | ||||||
| ARTEL ELECTRONICS MANUFACTURING LLC | 25 | 7 | ||||||
| AKFA MEDLINE LLC | 5 | - | ||||||
| AKFA BUILDING MATERIALS LLC | 3 | - | ||||||
| ENERGO POINT PRO LLC | 2 | 3 | ||||||
| ALVIERO LLC | 2 | - | ||||||
| ARTEL ELECTRONICS LLC | 2 | 3 | ||||||
| SMART ILLUMINATION LLC | 2 | - | ||||||
| DISCOVER INVEST LLC | 2 | 10 | ||||||
| AKFA ALUMINIUM LLC | 1 | - | ||||||
| TELERADIOKOMPANIYAZO’R LLC | 1 | - | ||||||
| MILLIY BOG XIZMATI LLC | 1 | - | ||||||
| OTHER | - | 22 | ||||||
| Total revenue from related parties | $ | 220 | $ | 149 | ||||
F-33
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
Cost of sales with related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| CITYNET LLC | $ | 15 | $ | 16 | ||||
| OCARD LLC | 12 | 2 | ||||||
| CHALET RESTORAN LLC | 8 | - | ||||||
| TEXNOGARANT LLC | 1 | - | ||||||
| CITIZEN TRAVEL LLC | - | 35 | ||||||
| EXCELLENT SWEETS STORE LLC | - | 23 | ||||||
| VIVA UNIVERSAL LINE LLC | - | 7 | ||||||
| INSPO CARE LLC | - | 3 | ||||||
| MILLIY BOG XIZMATI LLC | - | 3 | ||||||
| MAROON TRADE LLC | - | 3 | ||||||
| Total cost of sales with related parties | $ | 36 | $ | 92 | ||||
Purchases of inventory and general operating supplies from related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| OCARD LLC | 14 | 3 | ||||||
| GREEN ZONE OF WORLD LLC | 12 | 1 | ||||||
| AKFA FOOD LLC | 5 | 6 | ||||||
| AKFA ASSEMBLY LLC | 2 | - | ||||||
| MAROON TRADE LLC | - | 2 | ||||||
| MILENIO LLC | - | 177 | ||||||
| EXCELLENT SWEETS STORE LLC | - | 14 | ||||||
| VIVA UNIVERSAL LINE LLC | - | 7 | ||||||
| MILLIY BOG XIZMATI LLC | - | 3 | ||||||
| INSPO CARE LLC | - | 3 | ||||||
| ROUTESTAR LOGISTICS LLC | - | 1 | ||||||
| Total purchases of inventory and general operating supplies from related parties | $ | 33 | $ | 217 | ||||
Interest income from related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| AURUM GLOBAL GROUP FE LLC | $ | 136 | $ | - | ||||
| ADW-INTERNATIONAL CONGRESS HALL LLC | 134 | 3 | ||||||
| MULTINATIONAL MINE GROUP FE LLC | 6 | - | ||||||
| Total interest income from related parties | $ | 276 | $ | 3 | ||||
F-34
NOTES TO THE COMBINED FINANCIAL STATEMENTS
| 22. | Related Party Transactions and Balances (Continued) |
Interest expense to related parties:
| Years ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| MILENIO LLC | $ | 35 | $ | 32 | ||||
| Total interest expense to related parties | $ | 35 | $ | 32 | ||||
See Notes 9 and 15 for other related party transactions.
| 23. | Subsequent Events |
The Group has reviewed subsequent events through the date of issuance of these combined financial statements and has identified the following subsequent events:
| ● | On June 1, 2026, the parent company made a non-cash capital contribution of $41,062 thousand to TEG SPV LLC, increasing the holding company’s contributed capital to $84,349 thousand. For purposes of these combined financial statements, the effect of this capital contribution has been reflected retrospectively within contributed capital as if the current capital structure had been in place since January 1, 2024, reflecting the intended capitalization of the Group. |
| ● | In April 2026, the Group established a three-member Board of Directors, including two independent directors. Two more independent directors joined the Board in June 2026. |
| ● | In June 2026, TEG SPV LLC appointed a new Chief Executive Officer and a new Chief Financial Officer. |
| ● | During the six-month period ended June 30, 2026, the Group paid expenses of $5,797 thousand on behalf of the UBO. These payments were accounted for as owner distributions and recognized as a reduction of equity during the period. |
F-35
Exhibit 99.4
TEG SPV GROUP
Condensed Combined Balance Sheets
(All dollar amounts are in thousands)
| June 30, | December 31, | |||||||||
| Note | 2026 | 2025 | ||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 883 | $ | 1,718 | ||||||
| Inventories | 337 | 290 | ||||||||
| Due from related parties | 21 | 19,698 | 26,962 | |||||||
| Accounts receivable (net of allowance for credit losses of $647 and $390, respectively) | 6 | 4,441 | 3,860 | |||||||
| Notes receivable (net of allowance for credit losses of $18 and $68, respectively) | 7 | 1,331 | 5,022 | |||||||
| Prepaid expenses and other current assets | 8 | 2,379 | 1,667 | |||||||
| Total current assets | 29,069 | 39,519 | ||||||||
| Non-current assets: | ||||||||||
| Deferred income tax assets | 17 | 153 | 46 | |||||||
| Property and equipment, net | 9 | 95,468 | 95,593 | |||||||
| Total non-current assets | 95,621 | 95,639 | ||||||||
| TOTAL ASSETS | $ | 124,690 | $ | 135,158 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Due to related parties | 21 | $ | 1,871 | $ | 1,840 | |||||
| Accounts payable and other liabilities | 10 | 3,457 | 2,278 | |||||||
| Contract liabilities | 11 | 2,622 | 2,502 | |||||||
| Income taxes payable | 4,462 | 3,406 | ||||||||
| Other taxes payable | 12 | 872 | 1,022 | |||||||
| Current maturities of loans payable | 13 | 10,217 | 14,705 | |||||||
| Total current liabilities | 23,501 | 25,753 | ||||||||
| Non-current liabilities: | ||||||||||
| Accounts payable and other liabilities | 10 | 358 | 254 | |||||||
| Loans payable | 13 | 15,289 | 20,481 | |||||||
| Deferred income tax liabilities | 17 | 341 | 2 | |||||||
| Total non-current liabilities | 15,988 | 20,737 | ||||||||
| TOTAL LIABILITIES | $ | 39,489 | $ | 46,490 | ||||||
| Commitments and contingencies | 18 | |||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||
| Contributed capital | 14 | 82,298 | 82,298 | |||||||
| Retained earnings | 1,802 | 5,049 | ||||||||
| Currency translation adjustment | 1,101 | 1,321 | ||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 85,201 | 88,668 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 124,690 | $ | 135,158 | ||||||
The accompanying notes are an integral part of these unaudited condensed combined financial statements.
F-1
TEG SPV GROUP
Condensed Combined Statements of Operations and Comprehensive Income
(All dollar amounts are in thousands)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| Note | 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Revenue | 2 | $ | 11,246 | $ | 12,769 | $ | 17,375 | $ | 18,525 | |||||||||
| Cost of sales | 15 | (5,973 | ) | (5,585 | ) | (10,706 | ) | (10,026 | ) | |||||||||
| Gross profit | 5,273 | 7,184 | 6,669 | 8,499 | ||||||||||||||
| Selling, general and administrative expenses | 16 | (1,063 | ) | (869 | ) | (1,942 | ) | (1,416 | ) | |||||||||
| Provision for bad debts, net | 6,7,21 | (186 | ) | (44 | ) | (175 | ) | (94 | ) | |||||||||
| Other operating expenses, net | (233 | ) | (583 | ) | (458 | ) | (661 | ) | ||||||||||
| Operating income | 3,791 | 5,688 | 4,094 | 6,328 | ||||||||||||||
| Interest income | 562 | 350 | 2,391 | 678 | ||||||||||||||
| Interest expense | (540 | ) | (741 | ) | (1,229 | ) | (1,515 | ) | ||||||||||
| Other expenses, net | - | 22 | - | 22 | ||||||||||||||
| Net foreign exchange gain/(loss) | 312 | 691 | (324 | ) | 688 | |||||||||||||
| Income before income taxes | 4,125 | 6,010 | 4,932 | 6,201 | ||||||||||||||
| Income tax expense | 17 | (946 | ) | (1,012 | ) | (1,326 | ) | (1,049 | ) | |||||||||
| Net income | $ | 3,179 | $ | 4,998 | $ | 3,606 | $ | 5,152 | ||||||||||
| Other comprehensive income, net of tax : | ||||||||||||||||||
| Currency translation difference | 1,657 | 1,657 | (219 | ) | 1,719 | |||||||||||||
| Other comprehensive income, net of tax : | 1,657 | 1,657 | (219 | ) | 1,719 | |||||||||||||
| Comprehensive income | $ | 4,836 | $ | 6,655 | $ | 3,387 | $ | 6,871 | ||||||||||
The accompanying notes are an integral part of these unaudited condensed combined financial statements.
F-2
TEG SPV GROUP
Condensed Combined Statements of Changes in Shareholders’
Equity
(All dollar amounts are in thousands)
(unaudited)
| Note | Contributed capital | Retained earnings | Currency translation adjustment | Total shareholders’ equity | ||||||||||||||
| Balance at December 31, 2024 | $ | 82,536 | $ | 1,413 | $ | (4,734 | ) | $ | 79,215 | |||||||||
| Net income | - | 154 | - | 154 | ||||||||||||||
| Issuance of contributed capital | - | - | - | - | ||||||||||||||
| Owner-related expenses reclassified as distribution | - | (931 | ) | - | (931 | ) | ||||||||||||
| Other contributions and distributions | 319 | - | - | 319 | ||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | - | ||||||||||||||
| Currency translation differences | - | - | 62 | 62 | ||||||||||||||
| Balance at March 31, 2025 | 82,855 | 636 | (4,672 | ) | 78,819 | |||||||||||||
| Net income | - | 4,998 | - | 4,998 | ||||||||||||||
| Issuance of contributed capital | - | - | - | - | ||||||||||||||
| Owner-related expenses reclassified as distribution | - | (2,614 | ) | - | (2,614 | ) | ||||||||||||
| Other contributions and distributions | 565 | - | - | 565 | ||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | - | ||||||||||||||
| Currency translation differences | - | - | 1,657 | 1,657 | ||||||||||||||
| Balance at June 30, 2025 | $ | 83,420 | $ | 3,020 | $ | (3,015 | ) | $ | 83,425 | |||||||||
| Balance at December 31, 2025 | $ | 82,298 | $ | 5,049 | $ | 1,321 | $ | 88,668 | ||||||||||
| Net income | - | 427 | - | 427 | ||||||||||||||
| Issuance of contributed capital | - | - | - | - | ||||||||||||||
| Owner-related expenses reclassified as distribution | - | (3,460 | ) | - | (3,460 | ) | ||||||||||||
| Other contributions and distributions | 192 | - | - | 192 | ||||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | - | ||||||||||||||
| Currency translation differences | - | - | (1,876 | ) | (1,876 | ) | ||||||||||||
| Balance at March 31, 2026 | 82,490 | 2,017 | (555 | ) | 83,951 | |||||||||||||
| Net income | - | 3,179 | - | 3,179 | ||||||||||||||
| Issuance of contributed capital | - | - | - | - | ||||||||||||||
| Owner-related expenses reclassified as distribution | - | (3,394 | ) | - | (3,394 | ) | ||||||||||||
| Other contributions and distributions | (192 | ) | - | - | (192 | ) | ||||||||||||
| Other comprehensive income (loss), net of tax | - | - | - | - | ||||||||||||||
| Currency translation differences | - | - | 1,657 | 1,657 | ||||||||||||||
| Balance at June 30, 2026 | $ | 82,298 | $ | 1,802 | $ | 1,102 | $ | 85,201 | ||||||||||
The accompanying notes are an integral part of these unaudited condensed combined financial statements.
F-3
TEG SPV GROUP
Condensed Combined Statements of Cash Flows
(All dollar amounts are in thousands)
(unaudited)
| Six Months Ended June 30, | ||||||||||
| Note | 2026 | 2025 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net income | $ | 3,606 | $ | 5,152 | ||||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||||||||
| Depreciation of property and equipment | 9 | 2,083 | 2,136 | |||||||
| Provision for bad debts, net | 6,7,21 | 175 | 94 | |||||||
| Loss/(gain) on disposal of property and equipment | 128 | (8 | ) | |||||||
| Interest income | (2,391 | ) | (678 | ) | ||||||
| Interest expense | 1,229 | 1,515 | ||||||||
| Net foreign exchange loss/(gain) | 324 | (688 | ) | |||||||
| Deferred income taxes | 17 | 231 | 340 | |||||||
| Changes in working capital, net of effects | ||||||||||
| Accounts receivable, net | 998 | (1,721 | ) | |||||||
| Inventories | (48 | ) | (81 | ) | ||||||
| Prepaid expenses and other current assets | 508 | (2,767 | ) | |||||||
| Accounts payable and other liabilities | 66 | (324 | ) | |||||||
| Contract liabilities | 56 | (891 | ) | |||||||
| Advance received | - | (2,021 | ) | |||||||
| Other taxes payable | (3 | ) | 3,820 | |||||||
| Income tax payable | 1,063 | 700 | ||||||||
| Net cash provided by operating activities | 8,025 | 4,578 | ||||||||
| Cash flows from investing activities | ||||||||||
| Purchases of property and equipment | (2,436 | ) | (1,959 | ) | ||||||
| Proceeds from sales of property and equipment | 9 | 237 | 8 | |||||||
| Refund of construction advances made | 9 | - | 3,975 | |||||||
| Originations of notes receivable | (9,354 | ) | (828 | ) | ||||||
| Proceeds from collections of notes receivable | 19,346 | 1,023 | ||||||||
| Net cash provided by investing activities | 7,793 | 2,219 | ||||||||
| Cash flows from financing activities | ||||||||||
| Proceeds from loans payable | 41 | 44 | ||||||||
| Repayment of loans payable | (9,696 | ) | (3,726 | ) | ||||||
| Owner distributions | 14 | (6,854 | ) | (3,545 | ) | |||||
| Net cash used in financing activities | (16,509 | ) | (7,227 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (144 | ) | 77 | |||||||
| Net decrease in cash and cash equivalents | (835 | ) | (353 | ) | ||||||
| Cash and cash equivalents, beginning of period | 1,718 | 1,038 | ||||||||
| Cash and cash equivalents, end of period | $ | 883 | $ | 685 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Cash payments during the period for | ||||||||||
| Income taxes | (25 | ) | (58 | ) | ||||||
| Interest, net of capitalized interest | (1,266 | ) | (1,507 | ) | ||||||
The accompanying notes are an integral part of these unaudited condensed combined financial statements.
F-4
NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS
1. Group Structure and Common Control Reorganization
TEG SPV LLC is the holding company of TEG SPV Group (the “Group”). It is registered at 64/2 Mahtumquli Street, Yashnobod District, Tashkent.
The holding company is wholly owned by TOURISM AND ENTERTAINMENT GROUP LLC (the “parent company”) and WELLMORE LLC. Both the parent company and WELLMORE LLC are controlled by the same ultimate beneficial owner, Mr. Jakhongir Abidovich Artikkhodjaev, a citizen of the Republic of Uzbekistan (the “UBO”).
The Group operates three core businesses in the Republic of Uzbekistan, comprising two hotels and one exhibition center. During the fourth quarter of 2025, the Group underwent a legal restructuring involving the establishment of TEG SPV LLC as a holding company, together with the creation of two new subsidiaries, with the objective of bringing the Group under a unified holding structure. As part of this restructuring, one hotel operating entity (Hilton Tashkent) was transferred to the holding company. In addition, the primary real estate assets of the other two operating businesses were transferred to the newly established subsidiaries.
Following the completion, the Group’s legal structure and principal activities will be as follows:
Group principal businesses | Legal entities | Date of incorporation | Principal activities | |||
| Holding company | TEG SPV LLC | October 2025 | Strategic management, coordination of subsidiaries and holding of investments in operating entities | |||
| Hilton Tashkent | AKFA DREAM WORLD LLC (“ADW”) | December 2017 | Full-service five-star hotel providing accommodation, food and beverage services, events and ancillary hospitality services under the Hilton brand | |||
| Wyndham hotel | CULTURAL LANDMARK HOTEL LLC | December 2025 | Full-service four-star hotel providing accommodation, food and beverage services, events and ancillary hospitality services under the Wyndham brand | |||
| CAEX exhibition center | CAEX LLC | December 2025 | Exhibition and events venue, providing rental of exhibition space and related event organization and support services |
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation. The accompanying condensed combined financial statements and related notes of the Group were prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). All necessary adjustments were made to present fairly, in all material respects, the financial position, results of operations, and cash flows of the Group for all periods presented.
Principles of Combination. These condensed combined financial statements have been prepared to present the financial position, results of operations, and cash flows of entities that are under common control of the UBO as if they had operated as a single economic reporting entity. The combination is presented in accordance with GAAP, applying consolidation principles by analogy, as there was no single legal parent entity that directly controlled all entities included in the Group during the six months ended June 30, 2026 and the year ended December 31, 2025.
F-5
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
The financial information of the Group entities has been combined on a line-by-line basis. All intercompany balances and transactions between the Group entities, including intercompany revenues, expenses and other intra-group transfers, have been eliminated in full upon combination. Where necessary, adjustments have been made to ensure consistent accounting policies across all entities included in the condensed combined financial statements. Transactions between entities under common control have been reflected at their carrying amounts at the date of transfer. No step-up to fair value has been recognized in relation to assets or liabilities transferred between entities under common control.
The condensed combined financial statements do not necessarily represent the financial position, results of operations or cash flows of the Group on a stand-alone consolidated legal basis and may not be indicative of future performance following the substantial completion of the restructuring in July 2026 and its operation under its current legal structure.
The condensed combined financial statements were prepared on a historical cost basis. Financial assets and financial liabilities are measured at amortized cost under GAAP.
Use of Estimates and Assumptions. The preparation of the condensed combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the condensed combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the useful lives of long-lived assets, uncertain tax positions and the allowance for expected credit losses.
Foreign Currency Translation and Transactions. The determination of functional currency is based on the criteria set forth in ASC 830, Foreign Currency Matters. The functional currency of each entity within the Group is the Uzbek Soum (“UZS”), which reflects the primary economic environment in which the entities of the Group generate and expend cash. The Group’s reporting currency is U.S. dollar (“$”).
Transactions denominated in currencies other than the functional currency (primarily $ and EUR) are recorded at the exchange rates prevailing on the dates of the transactions. At the balance sheet date, monetary assets and liabilities denominated in foreign currencies are measured at the exchange rate in effect at the respective reporting date. All gains and losses arising from foreign currency transactions are recorded in the condensed combined statement of operations and comprehensive income during the year in which they occur.
The results and financial position of the Group are translated into the reporting currency as follows:
| (i) | assets and liabilities for each balance sheet are translated at the closing rate at the end of the respective reporting period; |
| (ii) | income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); |
| (iii) | components of equity are translated at the historic rate; and |
| (iv) | all resulting exchange differences are recognized as foreign currency translation adjustment in other comprehensive income. |
On June 30, 2026, the principal rate of exchange used for translating foreign currency balances was $ 1 = UZS 12,060.84 (December 31, 2025: $ 1 = UZS 12,025.33). For the three and six months ended June 30, 2026 and 2025, the average principal exchange rates used in translating income and expenses were as follows:
| Three months | Six months | |||||
| June 30, 2026 | (1$) - 12,055.62 | (1$) – 12,102.41 | ||||
| June 30, 2025 | (1$) - 12,842.72 | (1$) – 12,893.07 |
Fair Value of Financial Instruments. Under ASC 820, Fair Value Measurement (ASC 820), “fair value” is defined as the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date.
F-6
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents. Cash and cash equivalents include cash on hand and in various bank accounts, and all short-term investments with an original maturity of three months or less.
The Group maintains cash and cash equivalents with various financial institutions in the Republic of Uzbekistan. The Group’s policy is designed to limit exposure to any one institution. The Group performs periodic evaluations of the relative credit standing of those financial institutions as part of its investment strategy.
Accounts Receivable and Other Receivables. Accounts receivable primarily represent amounts due from hotel guests for room occupancy and related services. Accounts receivable also include, among other items, receivables from tenants leasing space in hotel and non-hotel properties.
The Group generally provides credit terms of 15 to 30 days from the invoice date, depending on customer type and contractual arrangements. Credit is extended only to approved customers based on an evaluation of their financial condition, historical payment performance, and expected future business volume. Accounts receivable are recorded at the invoiced amount, net of an allowance for expected credit losses. The allowance for expected credit losses is estimated based on historical loss experience, current conditions and reasonable and supportable forecasts of future economic conditions.
All accounts receivable are unsecured, and the Group does not obtain collateral.
Other receivables include short-term balances arising from various operating activities, including rent receivables, interest receivable, claims and other amounts due from miscellaneous debtors.
Notes Receivable. Notes receivable are financial assets measured at amortized cost. They are initially recognized at the amount funded, net of any loan origination costs or fees.
Notes receivable are subsequently measured at amortized cost using the effective interest method. Any difference between the initial carrying amount and the contractual cash flows (including discounts or premiums arising on initial recognition) is recognized in profit or loss over the term of the note as interest income.
The Group recognizes an allowance for expected credit losses on notes receivable in accordance with ASC 326, based on historical experience, current conditions, and reasonable and supportable forecasts of future economic conditions.
Concentrations of Credit Risk. The Group currently conducts all of its operations in the Republic of Uzbekistan. Accordingly, the Group’s business, financial condition and results of operations are influenced by the political, economic and legal environment in Uzbekistan, including changes in governmental policies, taxation, currency regulation and other regulatory developments.
Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable (including receivables from related parties) and advances to suppliers. The Group extends credit to certain customers in the normal course of business. While a portion of revenue is generated through credit sales, concentrations of credit risk in accounts receivable are limited due to generally short payment terms. The Group performs ongoing credit evaluations of its customers to further mitigate credit risk.
Inventory. Inventories consist primarily of food and beverage items used in the Group’s hospitality operations. Inventory is stated at the lower of cost or net realizable value (“NRV”) and is accounted for using the first-in, first-out method. NRV represents the estimated selling price in the ordinary course of business, less costs to sell.
F-7
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
The Group evaluates inventories for potential impairment based on factors, such as spoilage, obsolescence, damage and expected selling prices. When the cost of inventory exceeds its NRV, the inventory is written down to NRV, and the resulting loss is recognized in the period incurred. Such write-downs are not subsequently reversed.
Prepaid Expenses and Other Current Assets. Prepaid expenses and other current assets include payments made in advance for goods and services to be received in future periods, including supplier advances, insurance, rent, service contracts, supplies, recoverable taxes and other short-term receivables. These amounts are initially recorded at historical cost and are expensed over the period in which the related economic benefits are consumed, consistent with the matching principle. Prepaid expenses are classified as current when expected to be utilized within twelve months or the normal operating cycle, and otherwise classified as non-current. Advances related to property and equipment are recorded within property and equipment. Prepaid balances are reviewed for impairment and written off when it is determined that future economic benefits are no longer probable.
Property and Equipment. Property and equipment are recorded at cost. Costs of improvements that extend the useful life, increase capacity, or improve service potential of an asset are capitalized. Costs for normal repairs and maintenance are expensed as incurred.
Depreciation begins when the asset is available for its intended use. Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows:
| Useful life in years | ||
| Buildings and improvements | 30 to 60 years | |
| Equipment | 3 to 13 years | |
| Furniture and fixtures | 3 to 13 years | |
| Other | 3 to 13 years |
The estimation of useful lives of property and equipment involves judgment and is based on management’s experience with similar assets. The future economic benefits of these assets are consumed primarily through use; however, factors such as technical or commercial obsolescence and physical deterioration may also reduce the economic benefits expected to be derived from the assets.
Management reviews the useful lives of assets based on their current technical condition and the expected period over which the assets are anticipated to generate economic benefits for the Group. Key factors considered include:
| (a) | the expected pattern of use of the assets; | |
| (b) | expected physical wear and tear, which depends on operating conditions and maintenance programs; and | |
| (c) | technical or commercial obsolescence arising from changes in market or industry conditions. |
Subsequent expenditure is capitalized only when it is probable that future economic benefits will flow to the Group and the cost can be reliably measured.
Property and equipment are derecognized upon disposal or when no future economic benefits are expected, and the difference between disposal proceeds and carrying amount is recognized in profit or loss within other income or expense.
F-8
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
Impairment of Long-Lived Assets. Impairment of long-lived assets is assessed whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability is first assessed by comparing the carrying amount of the asset or asset group with the estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds the undiscounted cash flows, the asset is considered not recoverable and an impairment loss is recognized. The impairment loss is measured as the excess of the carrying amount over the asset’s fair value, which is generally determined using discounted cash flow techniques or other valuation methods. Following recognition of an impairment loss, the adjusted carrying amount becomes the new cost basis and is depreciated over the remaining useful life. The Group periodically reviews the estimated useful lives of its long-lived assets to ensure they remain appropriate based on renovation requirements, maintenance practices and brand standards. Long-lived assets classified as held for sale are measured in accordance with the lower of carrying amount or fair value less costs to sell.
Accounts Payable and Other Liabilities. Accounts payable are recognized when the Group receives goods or services from a counterparty in accordance with the terms of the underlying arrangement. Accounts payable are initially recorded at the invoiced amount, which approximates their transaction price at recognition. Accounts payable are subsequently measured at amortized cost when a significant financing component exists; otherwise, they are carried at their invoiced amount. Accounts payable are derecognized when the related obligation is settled, cancelled or otherwise legally extinguished.
Accrued expenses and other liabilities primarily consist of royalty accruals, accrued employee salaries, utilities and other operating expenses incurred but not yet invoiced.
Contract Liabilities. Contract liabilities represent the Group’s obligation to transfer goods or services to a customer for which consideration has been received in advance or is otherwise due prior to revenue recognition. These primarily include advance deposits received for hotel accommodations, food and beverage services, event services and rental of facilities and office spaces.
Contract liabilities are recognized when:
| ● | cash is received in advance of performance, or | |
| ● | amounts billed exceed revenue recognized based on satisfaction of performance obligations. |
Revenue is recognized from contract liabilities when (or as) the related performance obligations are satisfied, which generally occurs over the duration of a guest stay, event period or rental term.
Advance deposits may be refundable or non-refundable depending on contractual terms. Refundable deposits are generally returned upon cancellation within the specified cancellation period. Non-refundable deposits are recognized as revenue when the related services are provided or when the Group’s right to consideration becomes unconditional in accordance with ASC 606.
Unsatisfied performance obligations. The Group has elected the practical expedient under ASC 606 for contracts with an original expected duration of one year or less. Due to the short-term nature of its contracts, which primarily consist of hotel accommodations, events and related services, the Group’s remaining performance obligations are generally expected to be satisfied within 12 months. Accordingly, the Group does not disclose quantitative information about remaining performance obligations for these contracts.
Loans Payable. Loans payable are financial liabilities measured at amortized cost. They are initially recognized at the proceeds received, net of directly attributable debt issuance costs. Debt issuance costs are amortized to interest expense over the term of the related borrowings using the effective interest method.
F-9
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
If the Group violates a covenant under a loan agreement at or before the reporting date, and the violation gives the lender the right to demand repayment on demand, the related liability is classified as current, even if the lender waives the breach after the reporting date but before the condensed combined financial statements are issued. This is because, at the reporting date, the Group does not have an unconditional right to defer settlement for at least twelve months after that date.
Loans payable are derecognized when the obligation is extinguished, i.e., when the contractual obligation is discharged, cancelled or expires.
Commitments and Contingencies. The Group enters into various contractual arrangements in the normal course of operating its hotel and exhibition properties. These commitments include, but are not limited to, non-cancelable purchase agreements for food and beverage supplies and operating materials; utility, maintenance, cleaning, security, and facility management contracts; construction, renovation, and capital improvement contracts; and service contracts related to hotel management, franchise agreements, reservation and marketing systems, and exhibition and event operations. Such arrangements are not recognized in the condensed combined financial statements until the related goods or services are received in accordance with ASC 440, Commitments.
The Group also evaluates loss contingencies in accordance with ASC 450, Contingencies, and recognizes a liability when a loss is probable and reasonably estimable, or discloses the nature and estimated range of possible loss when a loss is reasonably possible but not probable or cannot be reasonably estimated. Contingencies may arise from guest claims, employee matters, vendor and contractor disputes, tax and regulatory matters, and obligations arising from hotel and exhibition operations.
Financial Guarantees. In accordance with ASC 460, financial guarantee-related liability is not recognized when the Group issues a financial guarantee to a third party in respect of a loan obtained by the Group’s related party, which is outside of the Group but under the ultimate control of the same UBO.
Revenue Recognition. The Group recognizes revenue in accordance with ASC 606, when control of goods or services is transferred to customers, in an amount that reflects the consideration expected to be received. The Group’s contracts generally have short durations and do not include significant variable consideration, complex financing components or frequent contract modifications. Revenue is presented net of taxes collected on behalf of governmental authorities. Payments are typically received in advance or at the time services are rendered.
The Group offers discounted rates through established pricing programs, including for loyalty members, advance bookings, and customers meeting defined credit criteria. These discounts are customary, non-discretionary, and are accounted for as reductions of the transaction price, with revenue recognized net of such discounts. The impact of loyalty programs is not material to the Group’s condensed combined financial statements.
F-10
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
Revenue is disaggregated by major revenue streams, as described in the table below:
| Major revenue streams | Revenue recognition | |
| Room (accommodation) | Room revenue relates to the provision of lodging services. Revenue is recognized over time, on a daily basis, as rooms are occupied. Where bookings include breakfast, the transaction price is allocated between lodging and breakfast based on the residual approach. For non-refundable bookings, revenue is recognized when the stay occurs or when cancellation or no-show rights lapse. Loyalty programs provide customers with a material right; therefore, a portion of the transaction price is deferred and recognized when points are redeemed or expire. | |
| Events | Events revenue includes venue rental and related services such as catering, equipment rental and event support services. These services are considered a single performance obligation and revenue is recognized over time, typically on a straight-line basis over the event period. | |
| Food and beverage | Food and beverage revenue includes restaurant, room service, minibar and bar sales. Revenue is recognized at a point in time when goods are delivered and services are rendered. | |
| Other services | Other services include laundry, spa, gym, parking and rental of facilities and office spaces. Revenue is generally recognized at a point in time when the service is rendered, except for services such as space rental, which is recognized over time as the customer simultaneously receives and consumes the benefits. |
| Three Months Ended | Six Months Ended | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Room (accommodation) | $ | 5,237 | $ | 6,407 | $ | 8,239 | $ | 8,791 | ||||||||
| Events | 4,332 | 4,524 | 6,186 | 5,875 | ||||||||||||
| Food, beverage and other | 1,677 | 1,838 | 2,950 | 3,859 | ||||||||||||
| Total revenue | $ | 11,246 | $ | 12,769 | $ | 17,375 | $ | 18,525 | ||||||||
Cost of Sales. Cost of sales primarily consists of expenses directly associated with providing hospitality services and managing the exhibition center. These costs include labor and related employee benefits for operational staff, food and beverage costs, guest supplies, laundry and cleaning services, depreciation, directly attributable taxes, royalty expenses, and other direct expenses incurred in delivering services. These costs are recognized as incurred in the period to which they relate.
Selling, General and Administrative Expenses (“SG&A”). SG&A expenses consist of costs not directly attributable to providing hospitality services or operating the exhibition center. These expenses include corporate and administrative salaries and related employee benefits, marketing and advertising costs, professional and consultancy fees, office and IT expenses, insurance and other general overhead costs. SG&A expenses are recognized as incurred in the period to which they relate.
Employee Benefits. Employee benefits comprise wages, salaries, contributions to Uzbekistan state pension and social insurance funds, paid annual and sick leave and bonuses. These costs are accrued in the year in which the Group’s employees render the associated services. The Group participates in a statutory defined contribution scheme and does not have any legal or constructive obligation to provide post-employment or other long-term employee benefits beyond the required statutory contributions.
F-11
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief operating decision maker (“CODM”), who is responsible for allocating resources and assessing the performance of the segments. The Group has identified its chief operating decision maker as the parent company’s Chief Executive Officer.
The Group evaluates performance and allocates resources based on discrete operating segments that generate revenues and incur expenses from providing hospitality services and managing the exhibition center. The Group’s reportable segments are determined based on the nature of services provided and the internal management structure used for decision-making.
Segment results include revenues and expenses directly attributable to each segment, as well as allocations of certain centrally managed costs where such allocations are reasonable and consistently applied. Unallocated items primarily include corporate-level administrative expenses, financing costs, and income taxes.
Allowance for Expected Credit Losses. The Group recognizes an allowance for expected credit losses on financial assets measured at amortized cost, including accounts receivable and notes receivable, in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”). The allowance represents management’s estimate of lifetime expected credit losses and is recorded as a contra-asset, reducing the amortized cost basis of the related financial assets.
Under the CECL model, expected credit losses are estimated over the contractual term of the financial asset, adjusted for expected prepayments when applicable. The estimate incorporates relevant information about past events, current conditions, and reasonable and supportable forecasts. Key factors considered include:
| ● | Segmentation of financial assets into pools with similar risk characteristics; | |
| ● | Evaluation of individual exposures where risk characteristics are not shared with a pool; | |
| ● | Historical credit loss experience; | |
| ● | Current economic conditions; and | |
| ● | Reasonable and supportable forecasts, including macroeconomic indicators such as GDP growth in Uzbekistan. |
For accounts receivable, the Group applies a provision matrix approach, whereby receivables are grouped into portfolios with similar risk characteristics (e.g., operating receivables and deferred sales of property) and stratified by aging categories. Historical loss rates are calculated for each aging bucket and adjusted to reflect current conditions and forward-looking information. These adjusted loss rates are applied to the corresponding aging categories to estimate expected credit losses. A receivable is considered past due when payment is not received within the contractual credit terms.
The Group generally assumes that defaulted accounts receivable will ultimately be collected, and therefore, the only economic loss associated with these balances relates to the time value of money arising from delayed settlement. Accordingly, to reflect the loss given default, the gross carrying amounts of accounts receivable in each aging bucket are discounted using the relevant interest rates published by the Central Bank of Uzbekistan. This approach captures the present-value impact of payment delays while recognizing that credit losses other than timing effects are not expected based on historical experience.
For notes receivable, the Group applies a CECL approach, incorporating counterparty-specific credit risk, past due status, credit quality indicators, and industry and geographic risk factors. Loss given default assumptions are based on available recovery data, including external benchmarks where appropriate.
Financial assets are written off when they are deemed uncollectible and all reasonable collection efforts have been exhausted. Write-offs are recorded against the allowance for expected credit losses. Recoveries of amounts previously written off are recognized in profit or loss when received.
The Group updates its estimate of expected credit losses at each reporting date using the best available information. Due to the use of forward-looking assumptions, including macroeconomic forecasts and customer payment behavior, actual results may differ from those estimates.
F-12
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
In accordance with ASC 326-20-50-13, the Group discloses a roll forward of the allowance for credit losses, including the beginning balance, current-period provision, write-offs, recoveries, and ending balance. Because these inputs require management judgment and are inherently uncertain, changes in assumptions, particularly those related to economic conditions or customer payment patterns, may result in material adjustments to the allowance for credit losses in future periods. The Group updates its CECL estimates at each reporting date using the best available information.
Income Taxes. The Group accounts for income taxes in accordance with ASC 740 Income Taxes. Income tax expense comprises current and deferred tax. Income tax is recognized in the condensed combined statement of operations, except to the extent it relates to items recognized directly in equity or other comprehensive income.
Current income tax expense represents the amount of income taxes payable or recoverable in respect of the taxable profit or loss for the current period, based on enacted tax rates and laws in the Republic of Uzbekistan where the Group operates.
Deferred income taxes are recognized using the asset and liability method for temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods when the temporary differences are expected to reverse. Deferred tax assets are recognized for deductible temporary differences, net operating loss carryforwards, and tax credit carryforwards, to the extent that it is more likely than not (a likelihood of greater than 50 percent) that taxable income will be available against which these amounts can be utilized.
A valuation allowance is established to reduce deferred tax assets to the amount that is more likely than not to be realized. The Group evaluates both positive and negative evidence, including historical results and projections of future taxable income, in assessing the need for a valuation allowance.
Deferred tax assets and liabilities are presented as non-current in the condensed combined balance sheet and are offset when they relate
to the same tax jurisdiction.
Uncertain tax positions. The Group evaluates uncertain tax positions in accordance with the recognition and measurement guidance for income taxes. Tax positions are recognized only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. Recognized tax positions are measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. The Group recognizes interest and penalties related to uncertain tax positions, if any, within income tax expense.
3. Recently Adopted Accounting Pronouncements
ASU 2025-05 — Financial Instruments—Credit Losses (Topic 326): Practical Expedient for Accounts Receivable and Contract Assets
| ● | Description: Provides a practical expedient for short-term trade accounts receivable and contract assets to estimate current expected credit losses (CECL) by allowing entities to assume current economic conditions persist over the brief collection period. | |
| ● | Adoption Status: The Company adopted this standard effective January 1, 2026. The adoption was applied on a modified retrospective basis. | |
| ● | Impact: The practical expedient simplified the calculation process for trade receivables and did not result in a material cumulative-effect adjustment to opening accumulated deficit or combined net income. |
ASU 2023-09 — Income Taxes (Topic 740): Improvements to Income Tax Disclosures
| ● | Description: Mandates standardized categories for annual rate reconciliations and disaggregated disclosures of income taxes paid by jurisdiction. | |
| ● | Adoption Status: Adopted for fiscal years beginning after December 15, 2025. | |
| ● | Impact: The standard is limited to enhanced financial statement footnote disclosures and has no effect on financial condition, condensed combined results of operations, or cash flows. |
F-13
4. New Accounting Pronouncements
ASU 2024-03 — Income Statement Reporting—Expense Disaggregation Disclosures (Subtopic 220-40)
| ● | Description: Requires public business entities to disaggregate specified operating expense line items into specific cost categories (such as compensation, depreciation, and inventory costs) within the footnotes. | |
| ● | Effective Date: Effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. | |
| ● | Expected Impact: Management is preparing systems to extract line-item expense components. Because this update strictly alters footnote disclosures, it will not impact condensed combined financial position, net income, or cash flows. |
ASU 2026-02 — Environmental Credits and Obligations (Topic 407)
| ● | Description: Establishes recognition, measurement, and presentation criteria for environmental credits (e.g., carbon offsets, renewable energy certificates) and compliance obligations. | |
| ● | Effective Date: Effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. | |
| ● | Expected Impact: The Company is currently evaluating the impact of adopting this standard on its condensed combined financial statements and footnote disclosures. |
5. Segment Information
The CODM is the Group’s parent company’s Chief Executive Officer, who, together with senior management, regularly reviews the operating results of the hospitality and exhibition segments. Segment performance is evaluated primarily based on segment revenues and operating results prepared in accordance with the Group’s internal accounting policies used for management reporting. The CODM uses these segment results to assess profitability and operating efficiency, compare performance across periods, determine annual operating budgets, approve capital expenditures and allocate financial and human resources between segments. Segment results are presented on the same basis as the information provided to the CODM. A reconciliation of total segment profit or loss to condensed combined profit or loss prepared in accordance with GAAP is presented below.
The Group has identified two reportable segments, which reflect the manner in which the CODM evaluates performance and allocates resources. These segments are determined based on the nature of the Group’s services, the internal organizational structure and the distinct economic characteristics of each business activity as reflected in internal reporting provided to the CODM. Segment revenues and operating results are prepared in accordance with the Group’s internal accounting policies.
| ● | Hospitality — operation of two hotel properties and provision of related accommodation and guest services. |
| ● | Exhibition — operation of an exhibition center used for hosting international and domestic exhibitions and events. |
The hospitality segment comprises revenues from all four revenue streams, while the exhibition segment includes revenues from events and related services.
F-14
5. Segment Information (Continued)
| Holding Company | Hospitality | Exhibition | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Six Months | Three Months | Six Months | Three Months | Six Months | Three Months | Six Months | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | - | - | $ | 7,990 | $ | 10,241 | $ | 13,786 | $ | 14,378 | $ | 1,318 | $ | 2,087 | $ | 2,584 | $ | 2,788 | $ | 9,308 | $ | 12,328 | $ | 16,370 | $ | 17,166 | ||||||||||||||||||||||||||||||
| Cost of sales | - | - | (5,150 | ) | (5,820 | ) | (9,470 | ) | (9,783 | ) | (711 | ) | - | (1,139 | ) | - | (5,861 | ) | (5,820 | ) | (10,609 | ) | (9,783 | ) | ||||||||||||||||||||||||||||||||
| Gross profit | - | - | 2,840 | 4,421 | 4,316 | 4,595 | 607 | 2,087 | 1,445 | 2,788 | 3,447 | 6,508 | 5,761 | 7,383 | ||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | (13 | ) | (21 | ) | (862 | ) | (878 | ) | (1,458 | ) | (1,451 | ) | (360 | ) | (310 | ) | (735 | ) | (630 | ) | (1,236 | ) | (1,188 | ) | (2,214 | ) | (2,081 | ) | ||||||||||||||||||||||||||||
| Provision for bad debts | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Other operating expenses, net | (3,753 | ) | (3,188 | ) | (7,123 | ) | (2,609 | ) | (555 | ) | (983 | ) | (1,407 | ) | (1,424 | ) | (4,308 | ) | (4,171 | ) | (8,530 | ) | (4,033 | ) | ||||||||||||||||||||||||||||||||
| Operating income | (13 | ) | (21 | ) | (1,775 | ) | 355 | (4,265 | ) | 534 | (309 | ) | 794 | (697 | ) | 734 | (2,097 | ) | 1,149 | (4,983 | ) | 1,269 | ||||||||||||||||||||||||||||||||||
| Interest income | - | - | 552 | 1 | 1,378 | 3 | - | - | - | - | 552 | 1 | 1,378 | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense | - | - | (548 | ) | (699 | ) | (1,212 | ) | (1,438 | ) | - | - | - | - | (548 | ) | (699 | ) | (1,212 | ) | (1,438 | ) | ||||||||||||||||||||||||||||||||||
| Net foreign exchange gain/(loss) | - | - | 383 | 679 | (166 | ) | 675 | 10 | (3 | ) | (1 | ) | (3 | ) | 393 | 675 | (167 | ) | 672 | |||||||||||||||||||||||||||||||||||||
| Other expenses, net | - | - | (75 | ) | 22 | (151 | ) | 23 | - | - | - | - | (75 | ) | 22 | (151 | ) | 23 | ||||||||||||||||||||||||||||||||||||||
| Income/(loss) before income taxes | (13 | ) | (21 | ) | (1,463 | ) | 358 | (4,416 | ) | (204 | ) | (299 | ) | 791 | (698 | ) | 731 | (1,775 | ) | 1,148 | (5,135 | ) | 529 | |||||||||||||||||||||||||||||||||
| Income tax expense | - | - | - | - | (3 | ) | - | - | - | - | - | - | - | (3 | ) | - | ||||||||||||||||||||||||||||||||||||||||
| Net income/(loss) in accordance with statutory accounting policies | (13 | ) | (21 | ) | (1,463 | ) | 358 | (4,419 | ) | (204 | ) | (299 | ) | 791 | (698 | ) | 731 | (1,775 | ) | 1,148 | ($ | 5,138 | ) | $ | 529 | |||||||||||||||||||||||||||||||
F-15
5. Segment Information (Continued)
| Holding Company | Hospitality | Exhibition | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Six Months | Three Months | Six Months | Three Months | Six Months | Three Months | Six Months | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| US GAAP adjustments not allocated to segments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | - | - | 1,937 | 441 | 1,005 | 1,359 | - | - | - | - | 1,937 | 441 | 1,005 | 1,359 | ||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | - | - | 49 | 943 | 216 | 1,233 | (161 | ) | (706 | ) | (315 | ) | (1,479 | ) | (111 | ) | 237 | (99 | ) | (246 | ) | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | - | (109 | ) | (53 | ) | 119 | (114 | ) | 202 | 226 | 200 | 495 | 463 | 173 | 319 | 273 | 665 | |||||||||||||||||||||||||||||||||||||||
| Provision for bad debts, net | - | - | (186 | ) | (44 | ) | (175 | ) | (94 | ) | - | - | - | - | (186 | ) | (44 | ) | (175 | ) | (94 | ) | ||||||||||||||||||||||||||||||||||
| Impairment loss | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Loss on classification as held for sale | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Other operating expenses, net | - | - | 3,555 | 3,156 | 6,778 | 2,554 | 520 | 431 | 1,293 | 819 | 4,076 | 3,588 | 8,072 | 3,373 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income | - | - | 9 | 349 | 1,013 | 676 | - | - | - | - | 9 | 349 | 1,013 | 676 | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense | - | - | 8 | (43 | ) | (16 | ) | (77 | ) | - | - | - | - | 8 | (43 | ) | (16 | ) | (77 | ) | ||||||||||||||||||||||||||||||||||||
| Net foreign exchange gain/(loss | - | - | (75 | ) | 15 | (150 | ) | 16 | (6 | ) | - | (6 | ) | - | (81 | ) | 15 | (156 | ) | 16 | ||||||||||||||||||||||||||||||||||||
| Other expenses, net | - | - | 75 | - | 151 | - | - | - | - | - | 75 | - | 151 | - | ||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | - | - | (858 | ) | (831 | ) | (1,319 | ) | (990 | ) | (88 | ) | (181 | ) | (4 | ) | (59 | ) | (946 | ) | (1,012 | ) | (1,324 | ) | (1,049 | ) | ||||||||||||||||||||||||||||||
| Combined
net income in accordance with statutory accounting policies | $ | (13 | ) | $ | (130 | ) | $ | 2,998 | $ | 4,464 | $ | 2,970 | $ | 4,675 | $ | 193 | $ | 535 | $ | 765 | $ | 474 | $ | 3,179 | $ | 4,998 | $ | 3,606 | $ | 5,152 | ||||||||||||||||||||||||||
Hospitality segment. The hospitality segment comprises the hotel operations of AKFA DREAM WORLD LLC in Tashkent, operating under a franchise agreement with the Hilton brand, and CULTURAL LANDMARK HOTEL LLC in Bukhara, operating under a franchise agreement with the Wyndham brand. Both entities are wholly owned and managed locally, under the Parent’s oversight. The segment includes revenues and expenses related to room operations, events, and food, beverage, and other.
Exhibition segment. The exhibition segment includes the activities of CAEX LLC, which manages commercial renting and organizes international and domestic exhibitions and events.
F-16
6. Accounts Receivable, net
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Accounts receivable | $ | 5,088 | $ | 4,250 | ||||
| Less: allowance for credit losses | (647 | ) | (390 | ) | ||||
| Total accounts receivable, net | $ | 4,441 | $ | 3,860 | ||||
The following table shows the movements in the allowance for expected credit losses during the period ended June 30, 2026, and the year ended December 31, 2025:
| (in thousands) | ||||
| Balance at January 1, 2025 | $ | 163 | ||
| Provision for bad debts | 212 | |||
| Currency translation difference | 15 | |||
| Balance at December 31, 2025 | $ | 390 | ||
| Provision for bad debts | 251 | |||
| Currency translation difference | 6 | |||
| Balance at June 30, 2026 | $ | 647 | ||
7. Notes Receivable
As of June 30, 2026, and December 31, 2025, notes receivable consisted of the following:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| SKY EVENTS LLC (1) | $ | 1,320 | $ | 5,060 | ||||
| Other | 29 | 30 | ||||||
| Less: allowance for credit losses | (18 | ) | (68 | ) | ||||
| Total notes receivable, net | $ | 1,331 | $ | 5,022 | ||||
| (1) |
During 2024–2025, the Group issued interest-free short-term notes receivable to SKY EVENTS LLC totaling $9,785 thousand, with maturity extended to December 31, 2026. The notes were initially recognized at the amount funded, net of any loan origination costs or fees, with subsequent modifications, resulting in day-one losses of $1,108 thousand and $724 thousand recognized in other expenses during 2025 and 2024, respectively. The discount is amortized as interest income over the term.
As of June 30, 2026, the carrying amount was $1,320 thousand compared to a face value of $1,464 thousand. Repayments of principal and interest during June 30, 2026 and the year ended December 31, 2025 amounted to $5,406 thousand and $1,026 thousand, respectively. |
F-17
7. Notes Receivable (Continued)
The following table shows the movements in the allowance for expected credit losses during the period ended June 30, 2026, and the year ended December 31, 2025:
| (in thousands) | ||||
| Balance at 1 January 2025 | $ | 79 | ||
| Recoveries | (16 | ) | ||
| Currency translation difference | 5 | |||
| Balance at 31 December 2025 | 68 | |||
| Recoveries | (50 | ) | ||
| Currency translation difference | - | |||
| Balance at June 30, 2026 | $ | 18 | ||
As of June 30, 2026, none of the Group’s notes receivable were past due.
8. Prepaid Expenses and Other Current Assets
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Prepaid other taxes | $ | 720 | $ | 645 | ||||
| Advances to vendors | 746 | 423 | ||||||
| General operating supplies | 420 | 380 | ||||||
| Others | 493 | 219 | ||||||
| Total prepaid expenses and other current assets | $ | 2,379 | $ | 1,667 | ||||
9. Property and Equipment, net
| (in thousands) | June 30, 2026 |
December 31, 2025 |
||||||
| Buildings and improvements | $ | 99,784 | $ | 98,308 | ||||
| Equipment | 4,667 | 4,947 | ||||||
| Furniture and fixtures | 6,610 | 6,645 | ||||||
| Other | 3,738 | 3,580 | ||||||
| 114,799 | 113,480 | |||||||
| Less: accumulated depreciation | (19,331 | ) | (17,887 | ) | ||||
| Total property and equipment, net | $ | 95,468 | $ | 95,593 | ||||
For the period ended June 30, 2026 and the year ended December 31, 2025, the Group recognized depreciation expense of $2,083 thousand and $3,995 thousand, respectively, in the condensed combined statements of operations. Refer to Note 13 for information on the Group’s pledged property and equipment.
During the period ended June 30, 2026, and the year ended December 31, 2025, additions from related party, DISCOVER INVEST LLC, amounted to $1,988 thousand and $4,516 thousand, respectively. Additionally, during 2025, a refund of construction advances made amounting to $4,667 thousand was received from DISCOVER INVEST LLC.
F-18
10. Accounts Payable and Other Liabilities
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Current | ||||||||
| Accounts payable | $ | 2,420 | $ | 1,709 | ||||
| Accrued payroll and employee benefits | 882 | 419 | ||||||
| Other liabilities | 155 | 150 | ||||||
| Total accounts payable and other liabilities | $ | 3,457 | $ | 2,278 | ||||
| Non-current | ||||||||
| Long-term deferred income | 276 | 177 | ||||||
| Commission payable on borrowings | 82 | 77 | ||||||
| Total accounts payable and other liabilities | $ | 358 | $ | 254 | ||||
Long-term deferred income represents a long-term part of the year-end balance of an advance payment of $500 thousand received in 2020 by the Group under a licensing agreement with Hilton Global. The advance payment is amortized on a straight-line basis over 25 years. As the payment relates to future rights and services to be provided over the contract term, the unamortized balance is presented in the condensed combined balance sheets until recognized in profit or loss within other income.
11. Contract Liabilities
The following table summarizes the activity of contract liabilities during the period ended June 30, 2026, and the year ended December 31, 2025:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Balance at the beginning of the period/year | $ | 2,640 | $ | 2,295 | ||||
| Increase due to consideration received in advance | 2,793 | 2,640 | ||||||
| Revenue recognized from beginning contract liabilities | (2,640 | ) | (2,295 | ) | ||||
| Balance at the end of the period/year | $ | 2,793 | $ | 2,640 | ||||
Contract liability balances as of June 30, 2026, and December 31, 2025, presented in the table above, include balances with related parties of $171 thousand and $138 thousand, respectively (see Note 21).
The Group estimates that the contract liabilities will be recognized as revenue within one month after the end of the respective reporting period. Advances from customers represent predominantly payments received for rooms, events and rentals.
12. Other Taxes Payable
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| VAT payable | $ | 698 | $ | 786 | ||||
| Payroll tax payable | 81 | 66 | ||||||
| Other | 93 | 170 | ||||||
| Total other taxes payable | $ | 872 | $ | 1,022 | ||||
F-19
13. Loans Payable
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Loans from HBK | $ | 25,497 | $ | 35,186 | ||||
| Other | 9 | - | ||||||
| Less: current maturities of loans payable | (10,217 | ) | (14,705 | ) | ||||
| Total loans payable | $ | 15,289 | $ | 20,481 | ||||
As of June 30, 2026 and December 31, 2025, loans payable primarily consist of the loans from Halyk Bank of Kazakhstan (“HBK”), denominated in $, bearing interest at 7.5% p.a. and maturing on September 15, 2029.
In accordance with the loan agreements with HBK, the Group’s loans are secured by ADW’s property and equity interests in ADW, as disclosed in the following table:
| (In thousands) | ||||||||||||||
| Lender | Borrower | Secured by | Nature of collateral | June 30, 2026 | December 31, 2025 | |||||||||
| HBK | ADW | Collateral | Building and property | $ | 51,354 | $ | 50,271 | |||||||
| HBK | ADW | Collateral | Share in AKFA DREAM WORLD LLC | 7,012 | 7,012 | |||||||||
As of June 30, 2026, the aggregate maturities for loans payable, assuming all extension options available in agreements are exercised, are as follows:
| Year | (in thousands) | |||
| 2027 | $ | 10,208 | ||
| 2028 | 10,239 | |||
| 2029 | 5,050 | |||
| Total loans payable | $ | 25,497 | ||
14. Contributed Capital
TEG SPV LLC was established as the Group’s holding company in October 2025 with contributed capital of $43,287 thousand. On June 1, 2026, the parent company made a non-cash capital contribution of $41,062 thousand to TEG SPV LLC, increasing the holding company’s contributed capital to $84,349 thousand. For purposes of these combined financial statements, the holding company’s contributed capital has been presented retrospectively as if the current capital structure had been in place since January 1, 2024.
| (in thousands) | December
31, 2025 | |||
| TOURISM AND ENTERTAINMENT GROUP LLC | $ | 84,349 | ||
| WELLMORE LLC | 0 | |||
| Effect of combining the Group’s other entities | (192 | ) | ||
| Currency transaction difference | (1,859 | ) | ||
| Total contributed capital | $ | 82,298 | ||
The contributed capital is allocated to each legal entity based on its registered ownership interests. TOURISM AND ENTERTAINMENT GROUP LLC, as the parent, holds substantially all of the Group’s contributed capital, with WELLMORE LLC holding a nominal ownership interest to comply with local corporate law requirements.
From time to time, the Group pays expenses on behalf of the UBO. These amounts are recorded as owner distributions in the condensed combined statements of changes in equity. During the period ended June 30, 2026 and the year ended December 31, 2025, owner distributions amounted to $6,854 thousand and $10,728 thousand, respectively. The 2025 distributions comprised cash distributions of $10,346 thousand and noncash distributions of $382 thousand.
F-20
15. Cost of Sales
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Employee compensation and benefits | $ | 1,448 | $ | 1,400 | $ | 2,790 | $ | 2,626 | ||||||||
| Operating supplies and consumables | 1,413 | 1,242 | 2,268 | 2,037 | ||||||||||||
| Depreciation expense | 982 | 958 | 2,074 | 2,088 | ||||||||||||
| Taxes other than income tax | 446 | 553 | 843 | 1,210 | ||||||||||||
| Royalty expense | 320 | 375 | 535 | 547 | ||||||||||||
| Utilities expense | 406 | 323 | 657 | 484 | ||||||||||||
| Other | 958 | 734 | 1,539 | 1,034 | ||||||||||||
| Total cost of sales | $ | 5,973 | $ | 5,585 | $ | 10,706 | $ | 10,026 | ||||||||
16. Selling, General and Administrative Expenses
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Employee compensation and benefits | $ | 580 | $ | 333 | $ | 1,000 | $ | 624 | ||||||||
| Advertising expenses | 282 | 257 | 475 | 351 | ||||||||||||
| Other taxes | - | 99 | - | 145 | ||||||||||||
| Depreciation expense | 2 | 10 | 4 | 19 | ||||||||||||
| Other | 199 | 170 | 463 | 277 | ||||||||||||
| Total selling, general and administrative expenses | $ | 1,063 | $ | 869 | $ | 1,942 | $ | 1,416 | ||||||||
17. Income Taxes
(a) Components of income tax (expense) / benefit
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Current tax expense | $ | (576 | ) | $ | (663 | ) | $ | (1,095 | ) | $ | (709 | ) | ||||
| Deferred tax expense | (370 | ) | (349 | ) | (231 | ) | (340 | ) | ||||||||
| Income tax expense for the year | $ | (946 | ) | $ | (1,012 | ) | $ | (1,326 | ) | $ | (1,049 | ) | ||||
F-21
17. Income Taxes (Continued)
(b) Income tax reconciliation
The income tax rate applicable to the Group’s income for the six months ended June 30, 2026, and for the year ended December 31, 2025, was 15%. A reconciliation between the theoretical and actual tax charges is presented below:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| (in thousands) | % | 2026 | % | 2025 | % | 2026 | % | 2025 | ||||||||||||||||||||||||
| $ | 4,125 | $ | 6,010 | $ | 4,932 | $ | 6,201 | |||||||||||||||||||||||||
| Theoretical tax charge at statutory rate of | 15 | % | (619 | ) | 15 | % | (902 | ) | 15 | % | (740 | ) | 15 | % | (930 | ) | ||||||||||||||||
| Tax effect of items which are not deductible or assessable for taxation purposes: | ||||||||||||||||||||||||||||||||
| - Non-deductible expenses | (2 | )% | (68 | ) | 0 | % | (4 | ) | (1 | )% | (67 | ) | (0 | )% | (11 | ) | ||||||||||||||||
| - Other | (6 | )% | (259 | ) | (2 | )% | (106 | ) | (11 | )% | (519 | ) | (2 | )% | (108 | ) | ||||||||||||||||
| Income tax expense for the year | $ | (946 | ) | $ | (1,012 | ) | $ | (1,326 | ) | $ | (1,049 | ) | ||||||||||||||||||||
Hilton Tashkent was granted an exemption from all types of taxes, including value-added tax and income tax, under a secret Presidential Decree issued in 2017 in relation to its construction and operation. The tax exemption was valid through 1 January 2025.
Hilton Tashkent commenced operations in late 2019 and began applying the tax incentive in 2020. Hilton Tashkent applied the value-added tax exemption available under the decree from the commencement of its operations; however, it did not apply the income tax exemption. This was due to the absence of taxable income and the existence of accumulated tax losses in the periods up to 2020. Under the general principles of Uzbek tax legislation, tax incentives granted by law or decree represent a right of the taxpayer rather than an obligation.
(c) Deferred taxes analyzed by type of temporary difference
The Group measures and recognizes current income tax payable and the tax bases of assets and liabilities in accordance with the tax legislation of the Republic of Uzbekistan. The Group is subject to certain permanent tax differences arising from the non-deductibility of specific expenses and from certain types of income that are not subject to taxation. Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes.
F-22
17. Income Taxes (Continued)
Temporary differences as of June 30, 2026, as of December 31, 2025 and January 1, 2024 primarily relate to differences in the methods and timing of income and expense recognition, as well as temporary differences arising from differences in the tax bases of certain assets and liabilities. The tax effect of movements in these temporary differences is presented in detail below:
| (in thousands) | 1 January 2026 | Charged/ (credited) to profit or loss | Currency translation difference | 31 March 2026 | Charged/ (credited) to profit or loss | Currency translation difference | 30 June 2026 | |||||||||||||||||||||
| Tax effect of deductible/(taxable) temporary differences | ||||||||||||||||||||||||||||
| Property and equipment, net | (108 | ) | 107 | 2 | 1 | 10 | (108 | ) | (97 | ) | ||||||||||||||||||
| Inventories | 50 | (48 | ) | (2 | ) | - | (49 | ) | 49 | - | ||||||||||||||||||
| Accounts receivable | (329 | ) | 161 | 5 | (163 | ) | (112 | ) | (165 | ) | (440 | ) | ||||||||||||||||
| Notes receivable | 446 | (150 | ) | (6 | ) | 290 | (162 | ) | 155 | 283 | ||||||||||||||||||
| Accounts payable and other liabilities | 36 | 34 | (1 | ) | 69 | 43 | (33 | ) | 79 | |||||||||||||||||||
| Prepaid expenses and other current assets | (46 | ) | 48 | - | 2 | 49 | (49 | ) | 2 | |||||||||||||||||||
| Loans payable | (5 | ) | (13 | ) | - | (18 | ) | (10 | ) | 13 | (15 | ) | ||||||||||||||||
| Net deferred tax asset/(liability) | 44 | 139 | (2 | ) | 181 | (231 | ) | (138 | ) | (188 | ) | |||||||||||||||||
| Recognized deferred tax asset | 532 | 350 | 7 | 362 | 102 | 217 | 364 | |||||||||||||||||||||
| Recognized deferred tax liability | (488 | ) | (211 | ) | (9 | ) | (181 | ) | (333 | ) | (355 | ) | (552 | ) | ||||||||||||||
| Net deferred tax asset/(liability) | 44 | 139 | (2 | ) | 181 | (231 | ) | (138 | ) | (188 | ) | |||||||||||||||||
F-23
17. Income Taxes (Continued)
| (in thousands) | December 31, 2025 | (Charged)/ credited to profit or loss | Currency translation difference | December 31, 2024 | (Charged)/ credited to profit or loss | Currency translation difference | January 1, 2024 | |||||||||||||||||||||
| Tax effect of deductible/(taxable) temporary differences | ||||||||||||||||||||||||||||
| - Property and equipment, net | $ | (107 | ) | $ | (19 | ) | $ | (8 | ) | $ | (80 | ) | $ | (14 | ) | $ | 4 | $ | (70 | ) | ||||||||
| - Inventories | 49 | 10 | 3 | 36 | 6 | (1 | ) | 31 | ||||||||||||||||||||
| - Accounts receivable | (328 | ) | (346 | ) | (10 | ) | 28 | (37 | ) | (3 | ) | 69 | ||||||||||||||||
| - Notes receivable | 446 | 87 | 29 | 330 | 112 | (13 | ) | 231 | ||||||||||||||||||||
| - Prepaid expenses and other current assets | (46 | ) | (33 | ) | (2 | ) | (11 | ) | 19 | 1 | (31 | ) | ||||||||||||||||
| - Accounts payable and other liabilities | 35 | (1 | ) | (1 | ) | 37 | 27 | 2 | 8 | |||||||||||||||||||
| - Loans payable | (5 | ) | 17 | (1 | ) | (21 | ) | (40 | ) | - | 19 | |||||||||||||||||
| - Contract liabilities | - | (107 | ) | 3 | 104 | 102 | (3 | ) | 5 | |||||||||||||||||||
| - Recorded tax losses | - | (139 | ) | 4 | 135 | - | (7 | ) | 142 | |||||||||||||||||||
| Net deferred tax asset/(liability) | 44 | (531 | ) | 17 | 558 | 175 | (20 | ) | 404 | |||||||||||||||||||
| Recognized deferred tax asset | 530 | 114 | 17 | 670 | 266 | 7 | 505 | |||||||||||||||||||||
| Recognized deferred tax liability | (486 | ) | (645 | ) | - | (112 | ) | (91 | ) | (27 | ) | (101 | ) | |||||||||||||||
| Net deferred tax asset/(liability) | $ | 44 | $ | (531 | ) | $ | 17 | $ | 558 | $ | 175 | $ | (20 | ) | $ | 404 | ||||||||||||
18. Commitments and Contingencies
Financial guarantees. In March 2025, the Group guaranteed the obligations of a related party under a $100,000 thousand term facility agreement entered into with HBK. In addition, the Group repledged ADW’s same property, as disclosed in Note 13. The related party is under common control with the Group’s UBO but is not included within the Group. The Group does not receive consideration for issuing the guarantee and has no recourse against the related party in the event that any amounts are required to be paid under the arrangement.
Under the terms of the guarantee, the Group, together with certain other entities under common control, is jointly and severally liable in the event that the related party fails to meet its obligations under the facility. The guarantee remains in effect through December 31, 2031. The maximum potential future payments under the guarantee are $100,000 thousand, plus any accrued interest, fees and penalties under the terms of the facility.
No liability has been recognized in respect of this guarantee as of the inception date or at June 30, 2026 in accordance with the Group’s accounting policy.
F-24
18. Commitments and Contingencies (Continued)
Tax contingencies. Tax, currency and customs legislation in Uzbekistan in effect at the reporting date is subject to varying interpretations and may be applied inconsistently by tax authorities. As a result, management’s interpretations of applicable legislation, including the application of tax incentives, withholding taxes, VAT matters and other tax regulations, as well as the supporting documentation maintained by the Group, may be challenged and positions taken by the Group may be subject to review, which could result in the assessment of additional taxes, penalties and interest.
Tax authorities may generally review tax filings for a period of three calendar years following the end of the tax period in which the liability arose; however, under certain circumstances, earlier periods may also be subject to examination.
Management evaluates uncertain tax positions in accordance with GAAP and recognizes the effect of tax positions only when such positions are more likely than not to be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. Management believes that its interpretation of applicable legislation, including administrative practices and precedents, is appropriate and that the Group’s tax positions will be sustained if examined and, accordingly, no provisions for uncertain tax positions have been recognized as of June 30, 2026 and December 31, 2025. Administrative practices and precedents represent situations in which a tax position could be considered a technical violation of tax law, but it is widely known, well understood, and a consistent practice of the taxing authority (with full knowledge of the position being taken) to nonetheless accept the position. Management does not expect the resolution of any potential tax examinations to have a material adverse effect on the Group’s financial position, results of operations and cash flows.
19. Financial Risk Management
The Group is exposed to financial, operational and legal risks arising in the normal course of business. Financial risks include market risk (comprising foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk. The primary objective of financial risk management is to establish appropriate risk limits and ensure ongoing compliance with those limits. Operational and legal risk management focuses on maintaining effective internal policies and procedures designed to mitigate such risks.
Concentration of credit risk and major customers. During the period ended June 30, 2026, revenue from the customer SKY EVENTS LLC represented approximately 14% ($2,440 thousand) of the Group’s total revenue. This revenue was generated within the hospitality segment.
As of June 30, 2026, SKY EVENTS LLC accounted for approximately 11% ($545 thousand) of the Group’s total gross accounts receivable ($5,088 thousand) and approximately 7% ($1,320 thousand) of total gross notes receivable ($19,088 thousand).
The Group is exposed to concentration risk to the extent that a significant portion of its revenue and receivables is attributable to a single customer.
Exposure to currency risk. The Group is exposed to currency risk primarily due to:
| ● | Purchases of raw materials and equipment denominated in $ and EUR; |
| ● | $-denominated loans payable; |
Fluctuations in the UZS/$ and EUR exchange rates may materially affect the Group’s financial position and results of operations.
Management monitors currency risk through:
| ● | Regular assessment of foreign currency–denominated monetary assets and liabilities |
| ● | Forecasting of cash flows in foreign currencies |
| ● | Monitoring of macroeconomic developments in Uzbekistan |
| ● | Evaluation of natural hedges within the business model | |
F-25
19. Financial Risk Management (Continued)
Foreign currency–denominated monetary assets and liabilities
As of June 30, 2026, and December 31, 2025, the Group’s monetary assets and liabilities denominated in foreign currencies were as follows:
| Monetary financial | Monetary financial | Net | ||||||||||
| (in thousands) | assets | liabilities | exposure | |||||||||
| June 30, 2026 | ||||||||||||
| US Dollars | $ | 117 | $ | (26,636 | ) | $ | (26,519 | ) | ||||
| EURO | 3 | (147 | ) | (144 | ) | |||||||
| Total | $ | 120 | $ | (26,783 | ) | $ | (26,663 | ) | ||||
| December 31, 2025 | ||||||||||||
| US Dollars | $ | 3,424 | $ | (35,742 | ) | (32,318 | ) | |||||
| EURO | 7 | (151 | ) | (144 | ) | |||||||
| Total | $ | 3,431 | $ | (35,893 | ) | $ | (32,462 | ) | ||||
Interest rate risk. Changes in interest rates primarily affect the Group’s loans payable and loans receivable, influencing their fair value (for fixed-rate instruments).
The Group does not maintain a formal policy regarding the proportion of fixed-rate versus variable-rate exposure. When entering into new loans payable or lending arrangements, management evaluates whether a fixed or variable rate is more advantageous over the expected term of the instrument.
As of June 30, 2026 and December 31, 2025, the Group did not have financial assets or liabilities with variable interest rates.
Credit risk. Credit risk represents the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises from accounts receivable, other receivables, notes receivable and cash and cash equivalents. The maximum exposure to credit risk is represented by the carrying amounts of financial assets reported in the condensed combined balance sheets.
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities as they fall due. The Group’s approach to liquidity management is to maintain sufficient liquidity to meet its obligations under both normal and stressed conditions without incurring unacceptable losses or damaging its reputation.
20. Fair Value Disclosures
The Group defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
| ● | Level 1 - Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access. |
| ● | Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
| ● | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. |
F-26
20. Fair Value Disclosures (Continued)
The Group has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.
The carrying amounts of the Group’s cash and cash equivalents, accounts receivable and notes receivable as well as accounts payable and other payables, loans payable approximate their fair values.
21. Related Party Transactions and Balances
The Group identifies related parties in accordance with ASC 850, including the parent company, entities under common control and key management personnel. Amounts due to or from related parties are recognized as receivables or payables and measured at their carrying amounts. The Group discloses the nature of the relationship, the types and amounts of transactions, and outstanding balances.
Parties are considered related if one party controls, is controlled by, or is under common control with the other party, or has significant influence over the other party. Related party relationships are evaluated based on the substance of the relationship rather than solely its legal form.
The major related parties and their relationship with the Group, and the nature of their services provided to the Group, are summarized as follows:
| Individual / entity name | Relationship with the Group | Major transactions with the Group | ||
| Mr. Jakhongir Abidovich Artikkhodjaev | UBO | Capital contribution, dividend distribution. | ||
| TOURISM AND ENTERTAINMENT GROUP LLC | Parent company | Loans issued | ||
| DISCOVER INVEST LLC | Entity under the common control | Construction of buildings, purchase and sale of vehicles | ||
| ADW-INTERNATIONAL CONGRESS HALL LLC | Entity under the common control | Loans issued | ||
| MULTINATIONAL MINE GROUP FE LLC | Entity under the common control | Loans issued | ||
| ARTEL ELECTRONICS LLC | Entity under the common control | Hospitality | ||
| MILLIY BOG XIZMATI LLC | Entity under the common control | Hospitality | ||
| ARTEL ELECTRONICS MANUFACTURING LLC | Entity under the common control | Hospitality | ||
| ARTEL SUPPORT LLC | Entity under the common control | Hospitality | ||
| CITIZEN TRAVEL LLC | Entity under the common control | Hospitality | ||
| RESTORAN N LLC | Entity under the common control | Hospitality | ||
| ENERGO POINT PRO LLC | Entity under the common control | Hospitality | ||
| AURUM GLOBAL GROUP FE LLC | Entity under the common control | Loans issued | ||
| NEWEXPO LLC | Entity under the common control | Loans issued | ||
| MILENIO LLC | Entity under the common control | Loans issued, sales of buildings | ||
| J-UNITED GROUP LLC | Entity under the common control | Procurement | ||
| DURABLE BETON LLC | Entity under the common control | Construction of buildings, purchase and sale of vehicles | ||
| MACMERRY MANAGEMENT LP | Entity under the common control | Hospitality | ||
| OBOD SHAHAR QURISH LLC | Entity under the common control | Hospitality | ||
| ARTEL TECHNICAL SCHOOL LLC | Entity under the common control | Hospitality | ||
| EXCELLENT SWEETS STORE LLC | Entity under the common control | Hospitality | ||
| AKFA FOOD LLC | Entity under the common control | Hospitality | ||
| OCARD LLC | Entity under the common control | Hospitality | ||
| GREEN ZONE OF WORLD LLC | Entity under the common control | Hospitality |
F-27
21. Related Party Transactions and Balances (Continued)
| ARIA SUG’URTA TASHKILOTI JSC | Entity under the common control | Hospitality | ||
| CENTRAL ASIAN UNIVERSITY LLC | Entity under the common control | Hospitality | ||
| CAU EDUTAINMENT LLC | Entity under the common control | Hospitality | ||
| AKFA MEDLINE LLC | Entity under the common control | Hospitality | ||
| AKFA BUILDING MATERIALS LLC | Entity under the common control | Hospitality | ||
| ALVIERO LLC | Entity under the common control | Hospitality | ||
| SMART ILLUMINATION LLC | Entity under the common control | Hospitality | ||
| AKFA ALUMINIUM LLC | Entity under the common control | Purchase of construction materials | ||
| TELERADIOKOMPANIYA ZO’R LLC | Entity under the common control | Hospitality | ||
| CITYNET LLC | Entity under the common control | Hospitality | ||
| CHALET RESTORAN LLC | Entity under the common control | Hospitality | ||
| TEXNOGARANT LLC | Entity under the common control | Hospitality | ||
| VIVA UNIVERSAL LINE LLC | Entity under the common control | Hospitality | ||
| INSPO CARE LLC | Entity under the common control | Hospitality | ||
| MAROON TRADE LLC | Entity under the common control | Hospitality | ||
| ASIA STAR PLAZA LLC | Entity under the common control | Loans issued | ||
| ONE TEAM HOSPITALITY LLC | Entity under the common control | Hospitality | ||
| EKZOTELLA LLC | Entity under the common control | Hospitality | ||
| PROFI SOLUTIONS LLC | Entity under the common control | Hospitality | ||
| ROUTESTAR LOGISTICS LLC | Entity under the common control | Hospitality | ||
| WAY TECHNO LLC | Entity under the common control | Hospitality |
Balances with related parties consist of:
| Due from related parties: | June 30, | December 31, | ||||||
| (in thousands) | 2026 | 2025 | ||||||
| Current assets | ||||||||
| Accounts receivable | $ | 263 | $ | 293 | ||||
| Other receivables | 1,495 | 3,431 | ||||||
| Notes receivable (net of allowance for credit losses of $148 and $175, respectively) | 17,591 | 21,791 | ||||||
| Prepaid expenses and other current assets | 349 | 1,447 | ||||||
| Total due from related parties | $ | 19,698 | $ | 26,962 | ||||
Below is a detailed breakdown of balances due from related parties:
Accounts receivable from related parties:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| DISCOVER INVEST LLC | $ | 225 | $ | 260 | ||||
| MILLIY BOG XIZMATI LLC | 29 | 29 | ||||||
| CITIZEN TRAVEL LLC | 6 | 4 | ||||||
| ARTEL ELECTRONICS MANUFACTURING LLC | 2 | - | ||||||
| DURABLE STONE CORP LLC | 1 | - | ||||||
| Total accounts receivable from related parties | $ | 263 | $ | 293 | ||||
F-28
21. Related Party Transactions and Balances (Continued)
Other receivables from related parties:
| (in thousands) | June 30, 2026 | December 31, 2025 | ||||||
| DISCOVER INVEST LLC | $ | 1,378 | $ | 3,388 | ||||
| RESTORAN N LLC | 61 | 39 | ||||||
| Other receivable on behalf of owner | 52 | - | ||||||
| CENTRAL ASIAN UNIVERSITY LLC | 4 | 4 | ||||||
| Total other receivables from related parties | $ | 1,495 | $ | 3,431 | ||||
Notes receivable from related parties, net:
| June 30, | December 31, | |||||||||||||||
| (in thousands) | Maturity | % p.a | 2026 | 2025 | ||||||||||||
| ADW-INTERNATIONAL CONGRESS HALL LLC | Dec-26 | 14% | $ | 9,310 | $ | 5,226 | ||||||||||
| AURUM GLOBAL GROUP FE LLC | Nov-26 | 14% | 5,475 | 13,026 | ||||||||||||
| Notes receivable on behalf of owner | Dec-26 | Nil | 2,210 | 2,346 | ||||||||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | Dec-26 | Nil | 526 | - | ||||||||||||
| WAY TECHNO LLC | Apr-30 | Nil | 170 | - | ||||||||||||
| MULTINATIONAL MINE GROUP FE LLC | Dec-26 | 14% | 18 | 1,346 | ||||||||||||
| NEWEXPO LLC | Dec-26 | Nil | 15 | 15 | ||||||||||||
| ONE TEAM HOSPITALITY LLC | Dec-26 | Nil | 15 | 7 | ||||||||||||
| Less: allowance for credit losses | (148 | ) | (175 | ) | ||||||||||||
| Total notes receivable from related parties, net | $ | 17,591 | $ | 21,791 | ||||||||||||
The following table shows the movements in the allowance for expected credit loss for notes receivable from related parties:
| (in thousands) | ||||
| Balance at 1 January 2025 | $ | - | ||
| Provision for bad debts | 163 | |||
| Currency translation difference | 12 | |||
| Balance at 31 December 2025 | 175 | |||
| Recoveries | (27 | ) | ||
| Currency translation difference | - | |||
| Balance at June 30, 2026 | $ | 148 | ||
F-29
21. Related Party Transactions and Balances (Continued)
Prepaid expenses and other current assets from related parties:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | $ | 124 | $ | 180 | ||||
| AKFA MEDLINE LLC | 123 | - | ||||||
| WAY TECHNO LLC | 81 | - | ||||||
| MILENIO LLC | 21 | 21 | ||||||
| Prepayment on behalf of owner | - | 1,208 | ||||||
| J-UNITED GROUP LLC | - | 30 | ||||||
| ONE TEAM HOSPITALITY LLC | - | 8 | ||||||
| Total prepaid expenses and other current assets from related parties | $ | 349 | $ | 1,447 | ||||
Due to related parties:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Current liabilities | ||||||||
| Accounts payable and other liabilities | $ | 1,658 | $ | 1,655 | ||||
| Contract liabilities | 171 | 138 | ||||||
| Loans payable | 41 | 47 | ||||||
| Total due to related parties | $ | 1,871 | $ | 1,840 | ||||
Below is a detailed breakdown of balances due to related parties:
Accounts payable and other liabilities to related parties:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | $ | 1,239 | $ | 69 | ||||
| ARTEL ELECTRONICS MANUFACTURING LLC | 135 | 135 | ||||||
| MILENIO LLC | 124 | 124 | ||||||
| DURABLE BETON LLC | 63 | 63 | ||||||
| MACMERRY MANAGEMENT LP | 38 | 39 | ||||||
| Other liability on behalf of owner | 37 | - | ||||||
| Other | 22 | 1,225 | ||||||
| Total accounts payable and other liabilities to related parties | $ | 1,658 | $ | 1,655 | ||||
F-30
21. Related Party Transactions and Balances (Continued)
Contract liabilities with related parties:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| ARTEL ELECTRONICS MANUFACTURING LLC | $ | 100 | $ | - | ||||
ARIA SUG’URTA TASHKILOTI JSC | 55 | 122 | ||||||
| MILENIO LLC | 14 | 14 | ||||||
| DISCOVER INVEST LLC | 2 | 2 | ||||||
| Total contract liabilities with related parties | $ | 171 | $ | 138 | ||||
Loans payable to related parties:
| June 30, | December 31, | |||||||||||||||
| (in thousands) | Maturity | % p.a | 2026 | 2025 | ||||||||||||
| TOURISM AND ENTERTAINMENT GROUP LLC | Dec-26 | Nil | $ | 41 | $ | - | ||||||||||
| ASIA STAR PLAZA LLC | Dec-26 | Nil | - | 19 | ||||||||||||
| Loans payable on behalf of owner | Dec-26 | Nil | - | 28 | ||||||||||||
| Total loans payable to related parties | $ | 41 | $ | 47 | ||||||||||||
Revenue from related parties:
| Three
Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| RESTORAN N LLC | $ | 46 | $ | - | $ | 12 | $ | - | ||||||||
| ARIA SUG’URTA TASHKILOTI JSC | 37 | - | 59 | - | ||||||||||||
| CAU EDUTAINMENT LLC | 25 | 29 | - | 29 | ||||||||||||
| ENERGO POINT PRO LLC | 15 | 1 | - | 2 | ||||||||||||
| ARTEL ELECTRONICS MANUFACTURING LLC | 7 | 14 | 6 | 21 | ||||||||||||
| DISCOVER INVEST LLC | 5 | 3 | 20 | 6 | ||||||||||||
| AKFA BUILDING MATERIALS LLC | 2 | - | - | - | ||||||||||||
| TELERADIOKOMPANIYA ZO’R LLC | 1 | - | 1 | - | ||||||||||||
| AKFA MEDLINE LLC | - | 5 | 46 | 5 | ||||||||||||
| CITIZEN TRAVEL LLC | - | 10 | 34 | 20 | ||||||||||||
| DURABLE BETON LLC | - | - | 7 | - | ||||||||||||
| CENTRAL ASIAN UNIVERSITY LLC | - | - | 3 | - | ||||||||||||
| J-UNITED GROUP LLC | - | - | 15 | - | ||||||||||||
| ALVIERO LLC | - | - | - | - | ||||||||||||
| ARTEL ELECTRONICS LLC | - | - | - | 2 | ||||||||||||
| SMART ILLUMINATION LLC | - | - | - | 2 | ||||||||||||
| AKFA ALUMINIUM LLC | - | 1 | - | 1 | ||||||||||||
| Total revenue from related parties | $ | 138 | $ | 63 | $ | 203 | $ | 88 | ||||||||
F-31
21. Related Party Transactions and Balances (Continued)
Purchases of inventory and general operating supplies from related parties:
| Three
Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| WAY TECHNO LLC | $ | 99 | $ | - | $ | 99 | $ | - | ||||||||
| Other receivable on behalf of owner | 77 | 458 | 77 | 529 | ||||||||||||
| OCARD LLC | 24 | 7 | 38 | 10 | ||||||||||||
| CITYNET LLC | 4 | 4 | 8 | 8 | ||||||||||||
| AKFA FOOD LLC | 1 | 1 | 2 | 2 | ||||||||||||
| J-UNITED GROUP LLC | - | 113 | - | 120 | ||||||||||||
| CHALET RESTORAN LLC | - | 7 | - | 8 | ||||||||||||
| GREEN ZONE OF WORLD LLC | - | - | - | - | ||||||||||||
| TEXNOGARANT LLC | - | 1 | - | 1 | ||||||||||||
| Total purchases of inventory and general operating supplies from related parties | 205 | 591 | 224 | 678 | ||||||||||||
Interest income from related parties:
| Three
Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| ADW-INTERNATIONAL CONGRESS HALL LLC | $ | 281 | $ | 1 | $ | 548 | $ | 3 | ||||||||
| AURUM GLOBAL GROUP FE LLC | 267 | - | 771 | - | ||||||||||||
| MULTINATIONAL MINE GROUP FE LLC | - | - | 55 | - | ||||||||||||
| WAY TECHNO LLC | 4 | - | 4 | - | ||||||||||||
| Total interest income from related parties | $ | 552 | $ | 1 | $ | 1,378 | $ | 3 | ||||||||
See Notes 9 and 14 for other related party transactions.
F-32
Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information (the “Pro Forma Financial Information”) is presented to illustrate the effects of the share exchange transaction (the “Transaction”) between StageWise Strategies Corp., a Nevada corporation (“StageWise”), and TEG SPV Group, a combined reporting entity comprising TEG SPV LLC and its subsidiaries (“TEG SPV”).
On September 18, 2026, Tourism and Entertainment Group LLC transferred 32% of its participatory interest in TEG SPV to Jakhongir Abidovich Artikkhodjaev. Also on September 18, 2026, Mr. Artikkhodjaev then transferred this participatory interest to Ms. Irodakhon Abduvakhitova.
On October 8, 2026, pursuant to a share exchange agreement (the “Agreement”) among StageWise Strategies Corp. (“Purchaser”), Tourism and Entertainment Group LLC (“TEG Parent”), Ms. Irodakhon Abduvakhitova (the “Individual Seller” and together with TEG Parent, the “Sellers”) and TEG SPV LLC, a limited liability company organized under the laws of the Republic of Uzbekistan, at the Closing (as defined below), the Sellers sold, transferred, conveyed, assigned and delivered to StageWise all of their participatory interests in the charter capital of TEG SPV (consisting of an approximate 67.99999012% participatory interest held by Tourism and Entertainment Group LLC and an approximate 32.00000000% participatory interest held by Ms. Irodakhon Abduvakhitova) — free and clear of all liens. A 0.00000988% participatory interest held by Wellmore LLC was not transferred or sold. In exchange, StageWise issued to the Sellers, an aggregate of 183,098,434 duly authorized, validly issued, fully paid and non-assessable shares of StageWise common stock (the “Exchange Shares”) allocated between TEG Parent and the Individual Seller in proportion to the respective portions of the participatory interests transferred by each of them (the “Exchange”). As a result of the Exchange, TEG SPV became a subsidiary of StageWise (the “Combined Company”), and the Sellers became stockholders of StageWise.
The closing of the Exchange (the “Closing”) took place on October 13, 2026, by electronic exchange of documents and signatures. Following the Closing, the parties are required to promptly complete the Uzbek notarization, translation and registration procedures necessary to effect the Registration Date, including delivering the notice required under Uzbek Law on Limited Liability Companies and filing the Company’s amended charter and related powers of attorney with the Uzbek registering authority.
The Pro Forma Financial Information has been prepared in accordance with Article 11 of Regulation S-X, as amended by SEC Release No. 33-10786, and reflects the application of “Transaction Accounting Adjustments” necessary to give pro forma effect to the Transaction and “Autonomous Entity Adjustments” because the condition in Rule 11-02(a)(6)(ii) of Regulation S-X is met, since TEG SPV was previously part of another entity and such presentation is necessary to reflect operations and the financial position of the Combined Company. No “Management’s Adjustments” depicting synergies or dis-synergies are presented, as management has not identified adjustments that are deemed reasonable and supportable at this time. Additionally, the Combined Company changed its fiscal year end to December 31 from StageWise’s previous fiscal year end of September 30. Accordingly, the pro forma financial statements have been prepared as if the Combined Company has a fiscal year end of December 31.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the historical unaudited condensed combined balance sheet of TEG SPV as of June 30, 2026 with the historical unaudited balance sheet of StageWise as of June 30, 2026, as if the Transaction had occurred on June 30, 2026.
The unaudited pro forma condensed combined statement of operations for the interim period ended June 30, 2026 combines the historical unaudited condensed combined statement of operations of TEG SPV for the six months ended June 30, 2026 with the historical unaudited statement of operations of StageWise for the six months ended June 30, 2026, as if the Transaction had occurred on the first day of the period presented.
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 combines the historical audited statement of operations of StageWise for its fiscal year ended September 30, 2025 with the historical audited combined statement of operations of TEG SPV for the year ended December 31, 2025. Because TEG SPV’s fiscal year end of December 31 differs from that of StageWise by one fiscal quarter, STWI’s results for the year ended September 30, 2025 are used, without adjustment, in accordance with Regulation S-X 11-02(c)(3).
F-1
Autonomous Entity Adjustments are presented in the pro forma statements of operations because the condition set forth in Rule 11-02(a)(6)(ii) of Regulation S-X is met: TEG SPV was, prior to the Transaction, a privately held subsidiary of Tourism and Entertainment Group LLC, and its historical financial statements do not reflect the incremental costs TEG SPV will incur as an autonomous, SEC-reporting public company following the Transaction. See Note 4.
The Pro Forma Financial Information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred had the Transaction been completed as of the dates indicated, nor is it indicative of future operating results or financial position of the Combined Company. The Pro Forma Financial Information should be read together with (i) the historical audited financial statements of TEG SPV and the related notes thereto, and (ii) the historical audited financial statements of StageWise as of and for the fiscal years ended September 30, 2025 and 2024 included in StageWise’s Annual Report on Form 10-K filed December 16, 2025, and StageWise’s unaudited interim financial statements as of and for the nine months ended June 30, 2026 included in StageWise’s Quarterly Report on Form 10-Q filed August 14, 2026.
Description of the Transaction
On June 5, 2026, Jakhongir Abidovich Artikkhodjaev, who serves as the ultimate beneficial owner of Tourism and Entertainment Group LLC, the parent company of TEG SPV, acquired 3,000,000 shares of StageWise common stock (approximately 74.2% of the then-outstanding shares) from StageWise’s former President and Chief Executive Officer and another stockholder for aggregate cash consideration of $750,000, as reported in StageWise’s Current Report on Form 8-K filed June 11, 2026. In connection with that transaction, StageWise’s board of directors and executive officers were replaced with individuals affiliated with Tourism and Entertainment Group LLC.
On June 30, 2026, Mr. Artikkhodjaev made a $250,000 investment in StageWise and in consideration of such investment was issued an additional 1,000,000 shares of Common Stock of StageWise for a total ownership of 4,000,000 shares of Common Stock. On July 17, 2026, Mr. Artikkhodjaev entered into an agreement with TEG Parent, pursuant to which he sold to TEG Parent 3,000,000 of his 4,000,000 shares of Common Stock, with TEG Parent also becoming a stockholder of STWI.
As described above, pursuant to the Agreement, StageWise issued new shares of its common stock to Tourism and Entertainment Group LLC and the Individual Seller in exchange for 99.99999012% of the issued and outstanding participatory interests of TEG SPV. Immediately following the Closing, (i) the 5,044,334 shares of StageWise common stock outstanding prior to the Closing remained outstanding and (ii) an aggregate of 183,098,434 common shares of StageWise were issued to Tourism and Entertainment Group LLC and Ms. Irodakhon Abduvakhitova. See Note 1 to the Pro Forma Financial Information for additional detail regarding these matters.
Because the former owners of TEG SPV obtained voting and operating control of the Combined Company, and because TEG’s historical operations are substantially larger than StageWise’s historical operations, the Transaction is accounted for as a reverse acquisition, with TEG treated as the accounting acquirer, in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations.
F-2
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2026
(In thousands, except share and per share data)
| TEG SPV (Historical) | StageWise (Historical) | Transaction Accounting Adjustments | Autonomous Entity Adjustment | Pro Forma Combined | ||||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 883 | $ | 45 | $ | (182 | ) | B | $ | 746 | ||||||||||||
| Accounts receivable, net | $ | 4,441 | - | - | - | $ | 4,441 | |||||||||||||||
| Notes receivable, net | $ | 1,331 | - | - | - | $ | 1,331 | |||||||||||||||
| Inventories | $ | 337 | - | - | - | $ | 337 | |||||||||||||||
| Due from related parties | $ | 19,698 | - | - | - | $ | 19,698 | |||||||||||||||
| Prepaid expenses and other current assets | $ | 2,379 | - | - | - | $ | 2,379 | |||||||||||||||
| Total current assets | $ | 29,069 | $ | 45 | $ | (182 | ) | - | $ | 28,932 | ||||||||||||
| Property and equipment, net | $ | 95,468 | - | - | - | $ | 95,468 | |||||||||||||||
| Intangible assets, net | - | $ | 122 | - | - | $ | 122 | |||||||||||||||
| Deferred income tax assets | $ | 153 | - | - | - | $ | 153 | |||||||||||||||
| Prepaid expenses, noncurrent | - | $ | 8 | - | - | $ | 8 | |||||||||||||||
| Total non-current assets | $ | 95,621 | $ | 130 | - | - | $ | 95,751 | ||||||||||||||
| TOTAL ASSETS | $ | 124,690 | $ | 175 | $ | (182 | ) | - | $ | 124,683 | ||||||||||||
| LIABILITIES | ||||||||||||||||||||||
| Accounts payable and other current liabilities | $ | 3,457 | - | - | - | $ | 3,457 | |||||||||||||||
| Due to related parties | $ | 1,871 | - | - | - | $ | 1,871 | |||||||||||||||
| Contract liabilities / deferred revenue | $ | 2,622 | - | - | - | $ | 2,622 | |||||||||||||||
| Income taxes payable | $ | 4,462 | - | - | - | $ | 4,462 | |||||||||||||||
| Other taxes payable | $ | 872 | - | - | - | $ | 872 | |||||||||||||||
| Current maturities of loans payable | $ | 10,217 | - | - | - | $ | 10,217 | |||||||||||||||
| Deposit for common stock | - | $ | 45 | - | - | $ | 45 | |||||||||||||||
| Total current liabilities | $ | 23,501 | $ | 45 | - | - | $ | 23,546 | ||||||||||||||
| Loans payable, net of current maturities | $ | 15,289 | - | - | - | $ | 15,289 | |||||||||||||||
| Loan from related party (StageWise) | - | - | - | - | - | |||||||||||||||||
| Other non-current liabilities | $ | 358 | - | - | - | $ | 358 | |||||||||||||||
| Deferred income tax liabilities | $ | 341 | - | - | - | $ | 341 | |||||||||||||||
| Total non-current liabilities | $ | 15,988 | - | - | - | $ | 15,988 | |||||||||||||||
| TOTAL LIABILITIES | $ | 39,489 | $ | 45 | - | - | $ | 39,534 | ||||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
| Common stock | - | - | $ | 188 | D | - | $ | 188 | ||||||||||||||
| STWI Common stock | - | $ | 4 | $ | (4 | ) | A | - | - | |||||||||||||
| Contributed capital | $ | 82,298 | $ | (82,298 | ) | D | - | - | ||||||||||||||
| Additional paid-in capital | $ | 252 | $ | (122 | ) | A | $ | 82,239 | ||||||||||||||
| $ | (1 | ) | C | |||||||||||||||||||
| $ | 82,110 | D | ||||||||||||||||||||
| Retained earnings (accumulated deficit) | $ | 1,802 | $ | (126 | ) | $ | 126 | A | - | $ | 1,620 | |||||||||||
| $ | (182 | ) | B | |||||||||||||||||||
| Accumulated other comprehensive income (currency translation adjustment) | $ | 1,101 | - | - | - | $ | 1,101 | |||||||||||||||
| Total shareholders’ equity | $ | 85,201 | $ | 130 | $ | (183 | ) | - | $ | 85,148 | ||||||||||||
| Non-controlling interest | - | - | $ | 1 | C | $ | 1 | |||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 124,690 | $ | 175 | $ | (182 | ) | - | $ | 124,683 | ||||||||||||
F-3
Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Income
For the Six Months Ended June 30, 2026
(in thousands, except share and per share data)
| TEG SPV (Historical) | StageWise (Historical) | Transaction Accounting Adjustments | Autonomous Entity Adjustments | Pro Forma Combined | ||||||||||||||||||||||
| Revenue | $ | 17,375 | $ | 37 | - | - | $ | 17,412 | ||||||||||||||||||
| Cost of sales | $ | 10,706 | - | - | - | $ | 10,706 | |||||||||||||||||||
| Gross profit | $ | 6,669 | $ | 37 | - | - | $ | 6,706 | ||||||||||||||||||
| Selling, general and administrative expenses | $ | 1,942 | $ | 35 | - | $ | 903 | I | $ | 3,062 | ||||||||||||||||
| - | $ | 182 | E | - | ||||||||||||||||||||||
| Provision for bad debts | $ | 175 | - | - | - | $ | 175 | |||||||||||||||||||
| Other operating expenses | $ | 458 | - | - | - | $ | 458 | |||||||||||||||||||
| Operating income (loss) | $ | 4,094 | $ | 2 | $ | (182 | ) | $ | (903 | ) | $ | 3,011 | ||||||||||||||
| Interest income | $ | 2,391 | - | - | - | $ | 2,391 | |||||||||||||||||||
| Interest expense | $ | (1,229 | ) | - | - | - | $ | (1,229 | ) | |||||||||||||||||
| Other expenses, net | - | - | - | - | - | |||||||||||||||||||||
| Net foreign currency gain | $ | (324 | ) | - | - | - | $ | (324 | ) | |||||||||||||||||
| Income (loss) before income taxes | $ | 4,932 | $ | 2 | $ | (182 | ) | $ | (903 | ) | $ | 3,849 | ||||||||||||||
| Income tax expense | $ | (1,326 | ) | - | - | - | $ | (1,326 | ) | |||||||||||||||||
| NET INCOME (LOSS) | $ | 3,606 | $ | 2 | $ | (182 | ) | $ | (903 | ) | $ | 2,523 | ||||||||||||||
| Less: Net income attributable to non-controlling interest | - | - | $ | 0 | F | - | $ | 0 | ||||||||||||||||||
| Net income attributable to common shareholders | $ | 3,606 | $ | 2 | $ | (182 | ) | $ | (903 | ) | $ | 2,523 | ||||||||||||||
| Earnings per share, basic and diluted | $ | 0.00 | $ | 0.01 | ||||||||||||||||||||||
| Weighted average shares outstanding, basic and diluted | 4,044,334 | 188,142,768 | ||||||||||||||||||||||||
| Other comprehensive income — currency translation adjustment | $ | (219 | ) | - | - | - | (219 | ) | ||||||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 3,387 | $ | 2 | $ | (182 | ) | $ | (903 | ) | $ | 2,304 | ||||||||||||||
F-4
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2025
(in thousands, except share and per share data)
| TEG SPV (Historical) Year Ended December 31, 2025 | StageWise Historical Year Ended September 30, 2025 | Transaction Accounting Adjustments | Autonomous Entity Adjustments | Pro Forma Combined | ||||||||||||||||||||||
| Revenue | $ | 42,910 | $ | 95 | - | - | $ | 43,005 | ||||||||||||||||||
| Cost of sales | $ | 20,807 | - | - | - | $ | 20,807 | |||||||||||||||||||
| Gross profit | $ | 22,103 | $ | 95 | - | - | $ | 22,198 | ||||||||||||||||||
| Selling, general and administrative expenses | $ | 3,055 | $ | 170 | - | $ | 1,805 | J | $ | 5,212 | ||||||||||||||||
| - | - | $ | 182 | H | - | |||||||||||||||||||||
| Provision for bad debts | $ | 369 | - | - | - | $ | 369 | |||||||||||||||||||
| Other operating expenses | $ | 1,232 | - | - | - | $ | 1,232 | |||||||||||||||||||
| Operating income (loss) | $ | 17,447 | $ | (75 | ) | $ | (182 | ) | $ | (1,805 | ) | $ | 15,385 | |||||||||||||
| Interest income | $ | 998 | - | - | - | $ | 998 | |||||||||||||||||||
| Interest expense | $ | (2,928 | ) | - | - | - | $ | (2,928 | ) | |||||||||||||||||
| Other expenses, net | $ | (1,086 | ) | - | - | - | $ | (1,086 | ) | |||||||||||||||||
| Net foreign currency gain | $ | 2,434 | - | - | - | $ | 2,434 | |||||||||||||||||||
| Income (loss) before income taxes | $ | 16,865 | $ | (75 | ) | $ | (182 | ) | $ | (1,805 | ) | $ | 14,803 | |||||||||||||
| Income tax expense | $ | (2,501 | ) | - | - | - | $ | (2,501 | ) | |||||||||||||||||
| NET INCOME (LOSS) | $ | 14,364 | $ | (75 | ) | $ | (182 | ) | $ | (1,805 | ) | $ | 12,302 | |||||||||||||
| Less: Net income attributable to non-controlling interest | - | - | $ | 0 | G | $ | (0 | ) | $ | 0 | ||||||||||||||||
| Net income attributable to common shareholders | $ | 14,364 | $ | (75 | ) | $ | (182 | ) | $ | (1,805 | ) | $ | 12,302 | |||||||||||||
| Earnings per share, basic and diluted | $ | (0.02 | ) | $ | 0.07 | |||||||||||||||||||||
| Weighted average shares outstanding, basic and diluted | 4,818,083 | 188,142,768 | ||||||||||||||||||||||||
| Other comprehensive income — currency translation adjustment | $ | 6,055 | - | - | - | 6,055 | ||||||||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 20,419 | $ | (75 | ) | $ | (182 | ) | $ | (1,805 | ) | $ | 18,357 | |||||||||||||
F-5
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1. Basis of Presentation and Transaction Assumptions
The Pro Forma Financial Information has been prepared for illustrative purposes only, giving effect to the Transaction described above. On October 8, 2026 the share exchange agreement was executed, and the Closing occurred on October 13, 2026. Accordingly, the Pro Forma Financial Information reflects management’s assumptions regarding the structure and terms of the Transaction, including the following key assumptions:
The Transaction is given pro forma effect, as of June 30, 2026, for balance sheet purposes, as of January 1, 2026 for statement of operations purposes for the six-month period ended June 30, 2026, and as of January 1, 2025 for statement of operations purposes for the year ended December 31, 2025.
Non-recurring Transaction costs are reflected as Transaction Accounting Adjustments reducing cash and retained earnings in the pro forma balance sheet only, as such costs are not expected to have a continuing impact on the Combined Company.
Estimated incremental annual costs of operating as an autonomous, SEC-reporting public company are reflected as an Autonomous Entity Adjustment to the pro forma statement of operations for the year ended December 31, 2025, and as an Autonomous Entity Adjustment to the pro forma statement of operations for the six months ended June 30, 2026, in each case because the condition in Rule 11-02(a)(6)(i) of Regulation S-X is met and such costs are expected to have a continuing impact on the Combined Company.
TEG SPV’s interim financial information was available only for the six months ended June 30, 2026, while StageWise’s interim financial information, as reported in its Form 10-Q, covers the nine months ended June 30, 2026. StageWise’s historical statement of operations for the six months ended June 30, 2026 was derived by calculating the difference between the activity for the nine-months ended June 30, 2026 and the three months ended December 31, 2025.
TEG SPV’s audited financial information was only available for the year ended December 31, 2025 while StageWise’s audited financial information was only available for the year ended September 30, 2025. Because the fiscal year end dates are within one fiscal quarter of each other, no adjustments are needed to the financial information of TEG SPV in accordance with Rule 11-02(c)(3) of Regulation S-X. Upon the Closing of the Transaction, the fiscal year end changed to December 31. Accordingly, the pro forma financial statements were presented as if the change in fiscal year end had already taken effect.
Note 2. Accounting Treatment of the Transaction
For accounting purposes, the Transaction is treated as a reverse acquisition. Although StageWise is the legal acquirer, TEG SPV is treated as the accounting acquirer because, immediately following the Transaction, TEG SPV’s former owners held a substantial majority of the voting power of the Combined Company and to control its board of directors and senior management, and because TEG SPV’s historical operations are substantially larger in scale than StageWise’s historical operations in all relevant respects.
Because StageWise and TEG SPV were under common control, no goodwill or other intangible assets were recognized and assets acquired and liabilities assumed were transferred at the historical carrying amounts. TEG SPV’s historical financial statements became the historical financial statements of the Combined Company for all periods presented; therefore, TEG SPV is treated as the continuing reporting entity.
StageWise’s historical net assets as of the pro forma balance sheet date, and its historical accumulated deficit, are not carried forward by the Combined Company; rather, StageWise’s net assets are recorded at historical carrying value and combined with TEG SPV’s historical equity accounts, which are recapitalized into common stock and additional paid-in capital, as described in Note 3.
F-6
Note 3. Transaction Accounting Adjustments to the Unaudited Pro Forma Condensed Combined Financial Information
The Transaction Accounting Adjustments to the unaudited pro forma condensed combined balance sheet as of June 30, 2026 reflect the following:
| A. | Represents the elimination of StageWise’s outstanding equity of $126 thousand of accumulated deficit and $4 thousand of common stock, par value $0.001. |
| B. | Represents TEG SPV’s transaction costs not reflected in the historical financial statements of TEG SPV. Such costs of $182 thousand are inclusive of legal, advisory, printing, and other professional fees. |
| C. | Reflects the value of the 0.00000988% of the non-controlling interest in TEG SPV due to STWI’s acquisition of 99.99999012% of the outstanding equity of TEG SPV. Since the transaction was between entities under common control, the non-controlling interest is not initially recognized at fair value, but is instead recognized at book value. |
| D. | Recapitalization upon execution of the Share Exchange Agreement to reclass TEG SPV and STWI historical equity to additional-paid-in capital and present the par value of the shares issued. Includes shares of 5.04 million original shares and 183.10 million exchange shares. |
The Transaction Accounting Adjustments to the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026 reflect the following:
| E. | Represents TEG SPV’s transaction costs not reflected in the historical financial statements of TEG SPV. Such costs of $182 thousand are inclusive of legal, advisory, printing, and other professional fees. |
| F. | Reflects the $0 thousand estimated value of the 0.00000988% non-controlling interest in the income of TEG SPV due to STWI’s acquisition of 99.99999012% of the outstanding equity of TEG SPV. |
The Transaction Accounting Adjustments to the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 reflect the following:
| G. | Reflects the $0 thousand value of the 0.00000988% non-controlling interest in the income of TEG SPV due to STWI’s acquisition of 99.99999012% of the outstanding equity of TEG SPV. |
| H. | Represents TEG SPV’s transaction costs not reflected in the historical financial statements of TEG SPV. Such costs of $182 thousand are inclusive of legal, advisory, printing, and other professional fees. |
F-7
Note 4. Autonomous Entity Adjustment to the Statements of Operations and Comprehensive Income
Rule 11-02(a)(6)(ii) of Regulation S-X requires an Autonomous Entity Adjustment when the registrant was previously part of another entity and the pro forma financial statements should reflect the operations and financial position of the registrant as an autonomous entity. That condition is met here: prior to the Transaction, TEG SPV was a privately held, subsidiary of Tourism and Entertainment Group LLC, and its historical financial statements do not reflect the incremental costs of operating on a stand-alone basis as an SEC-reporting public company. Accordingly, the pro forma statements of operations present a separate Autonomous Entity Adjustment column.
The Autonomous Entity Adjustments reflect:
| I. | As TEG SPV was previously part of another entity and an autonomous entity adjustment is necessary to reflect operations and financial position of the registrant as an autonomous entity for the six months ended June 30, 2026. Estimated costs include $588 thousand of accounting fees, $165 thousand for the Board of Directors costs, $65 thousand for insurance, $60 thousand for additional employees, and $25 thousand of legal expenses. |
| J. | As TEG SPV was previously part of another entity and an autonomous entity adjustment is necessary to reflect operations and financial position of the registrant as an autonomous entity for the year ended December 31, 2025. Estimated costs include $1.175 million of accounting fees, $330 thousand for the Board of Directors costs, $130 thousand for insurance, $120 thousand for additional employees, and $50 thousand of legal expenses. |
These adjustments are factually supportable based on management’s estimates of the cost structure of comparable SEC-reporting companies of similar size and complexity and is expected to have a continuing impact on the Combined Company’s results of operations. No tax effect has been reflected on this adjustment because TEG SPV’s combined statutory tax rate is based on foreign (Uzbekistan) taxing jurisdictions in which these costs, which are expected to be incurred by the U.S. parent, are not expected to generate a corresponding tax benefit; management has accordingly assumed a full valuation allowance against any U.S. deferred tax asset that would otherwise arise.
No adjustment has been made to eliminate StageWise’s historical revenue and operating expenses from the pro forma statements of operations because, although StageWise is the legal acquirer, its historical operations did not cease upon completion of the Transaction for accounting purposes; rather, its historical results of operations for the periods presented are combined with those of TEG SPV in the same manner as the assets and liabilities of StageWise are combined in the pro forma balance sheet. No Management’s Adjustments for anticipated synergies have been presented, as none have been identified that meet the requirements of Rule 11-02(a)(7) of Regulation S-X.
Note 5. Net Income Per Share
Basic and diluted net income per share for the year ended December 31, 2025 is calculated by dividing pro forma net income of $12,302 by the 188,142,768 shares of Combined Company common stock issued and outstanding immediately following the Transaction, as if such shares had been outstanding for the entire period presented, consistent with the treatment of a reverse recapitalization, resulting in pro forma net income per share, basic and diluted, of $0.07. Pro forma basic and diluted net income per share for the interim period ended June 30, 2026 is calculated on the same basis, by dividing pro forma net income of $2,523 by the same 188,142,768 shares, resulting in pro forma net income per share, basic and diluted, of $0.01. Because this is pro forma financial information presented for illustrative purposes only, these per-share amounts should not be relied upon as indicative of a run-rate or annualized result. TEG SPV and STWI do not have any outstanding dilutive instruments. Accordingly, basic and diluted net income per share are the same for each period presented.
| Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | |||||||
| (in thousands, except share and per share data) | ||||||||
| Pro forma net income(1) ($ in thousands) | $ | 2,523 | $ | 12,302 | ||||
| Weighted average shares outstanding — basic and diluted | 188,142,768 | 188,142,768 | ||||||
| Net income per share — basic and diluted | $ | 0.01 | $ | 0.07 | ||||
| (1) | Pro forma net income includes Transaction Accounting Adjustments and Autonomous Entity Adjustments as discussed in Notes 3 and 4, respectively. |
F-8
Filing Exhibits & Attachments
10 documentsPress Releases
- EX-99.1 AUDITED COMBINED FINANCIAL STATEMENTS OF STAGEWISE STRATEGIES CORP. AS OF AND FO 132.9 KB
- EX-99.2 UNAUDITED FINANCIAL STATEMENTS OF STAGEWISE STRATEGIES CORP. AS OF JUNE 30, 2026 127.9 KB
- EX-99.3 AUDITED COMBINED FINANCIAL STATEMENTS OF TEG SPV LLC AS OF DECEMBER 31, 2025 AND 788.0 KB
- EX-99.4 UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS OF TEG SPV LLC AS OF JUNE 30, 677.8 KB
- EX-99.5 UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS OF TEG SPV LLC AS OF JUNE 30, 166.5 KB