Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F:
As previously disclosed in the Company’s report on Form 6-K furnished
to the U.S. Securities and Exchange Commission on June 11, 2026 (the “Initial Report”), on June 11, 2026, the Purchaser,
the Seller, Mirai and the Company entered into Amendment No. 1 to Share Purchase Agreement (the “Amendment”). Pursuant
to the Amendment, the third installment of the purchase price under the Purchase Agreement will be satisfied by the issuance by the Company
to the Seller or his nominee of 730,000 newly issued Class A ordinary shares of the Company at a deemed issuance price of US$0.575 per
share, representing an aggregate deemed value of US$419,750, subject to the terms and conditions set forth in the Purchase Agreement,
as amended by the Amendment.
This report on Form 6-K/A amends the Initial Report to (i) include
the historical financial statements of Mirai and the unaudited pro forma condensed combined financial information of the Company giving
effect to the Acquisition, and (ii) disclose the unregistered issuance of 730,000 Class A ordinary shares of the Company as the third
installment of the purchase price under the Purchase Agreement, as amended by the Amendment.
The unaudited pro forma condensed combined financial information included
in this report has been presented for informational purposes only to illustrate the estimated effects of the Acquisition and is not necessarily
indicative of the results of operations or financial condition that would have been achieved had the Acquisition been completed as of
the dates indicated, nor is it indicative of the Company’s future results of operations or financial condition.
Except as described above, all other information in the Initial Report
remains unchanged.
The 730,000 Class A ordinary shares of the Company issuable to the
Seller or his nominee as the third installment of the purchase price under the Purchase Agreement, as amended by the Amendment, have not
been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities
laws. The Company expects to issue such shares in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities
Act and/or Regulation S promulgated under the Securities Act, based in part upon the representations and warranties of the Seller and/or
his nominee, including, as applicable, that the recipient is not a “U.S. person” and is acquiring the shares in an offshore
transaction in compliance with Regulation S. The shares may not be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act.
(a) Financial Statements of Business Acquired.
The historical audited financial statements of Mirai as of and for
the years ended September 30, 2025 and 2024 are attached hereto as Exhibit 99.1 and incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial
information of the Company as of and for the year ended December 31, 2025, giving effect to the Acquisition, is attached hereto as Exhibit
99.2 and incorporated herein by reference.
(d) Exhibits.
This report of foreign private issuer on Form 6-K is hereby incorporated
by reference into (i) the registration statement on Form F-3 of the Company (File Number 333-294010), as amended,
and (ii) the registration statement on Form S-8 of the Company (File Number 333-278269), as amended, and into the
prospectus outstanding under the foregoing registration statements, to the extent not superseded by documents or reports subsequently
filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Exhibit 99.1
MIRAI CO., LTD.
INDEX TO THE FINANCIAL STATEMENTS
| CONTENTS | |
PAGE(S) |
| Report of Independent Registered Public Accounting Firm (PCAOB ID: 7080) | |
F-2 |
| BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND 2024 | |
F-3 |
| STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024 | |
F-4 |
| STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY/(DEFICIT) FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024 | |
F-5 |
| STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024 | |
F-6 |
| NOTES TO THE FINANCIAL STATEMENTS | |
F-7 |
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board
of directors of
Mirai Co., Ltd.
Opinion on the Financial Statements
We
have audited the accompanying consolidated balance sheet of Mirai Co., Ltd. and its subsidiaries (collectively, the “Company”)
as of September 30, 2024 and 2025, the related consolidated statement of operations and comprehensive income, changes in shareholders’
equity, and cash flows for each of the years in the two-year period ended September 30, 2025, and the related notes (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the Company as of September 30, 2024 and 2025, and the consolidated results
of its operations and its consolidated cash flows for each of the years in the two-year period ended September 30, 2025, in conformity
with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Basis for Opinion
These consolidated financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
financial statements based on our audit. 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 audit 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 consolidated 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 audit, 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
audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion.
/s/ Tang Qian & Associates, PLLC
We
have served as the Company’s auditor since 2026
Flower Mound, Texas
June
26, 2026
MIRAI CO., LTD.
BALANCE SHEETS
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| ASSETS | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
| 19,012 | | |
| 87,293 | |
| Accounts receivable, net | |
| 8,579,478 | | |
| 21,905,537 | |
| Prepayments | |
| 195,616 | | |
| 99,073 | |
| Other receivables | |
| 1,315 | | |
| — | |
| Total current assets | |
| 8,795,421 | | |
| 22,091,903 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Intangible assets, net | |
| 33,513 | | |
| — | |
| Deferred tax assets | |
| 19,403 | | |
| 49,542 | |
| Total non-current assets | |
| 52,916 | | |
| 49,542 | |
| Total assets | |
| 8,848,337 | | |
| 22,141,445 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
| 8,776,972 | | |
| 22,283,465 | |
| Accrued expenses and other current liabilities | |
| 107,192 | | |
| 340 | |
| Current tax liabilities | |
| 1,921 | | |
| 3,576 | |
| Total current liabilities | |
| 8,886,085 | | |
| 22,287,381 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| — | | |
| — | |
| | |
| | | |
| | |
| Shareholders’ equity | |
| | | |
| | |
| Share capital (Common stocks, 10,000 shares authorized, 60 shares issued and outstanding) | |
| 20,027 | | |
| 20,027 | |
| Accumulated other comprehensive loss | |
| (56,312 | ) | |
| (159,026 | ) |
| Accumulated deficits | |
| (1,463 | ) | |
| (6,937 | ) |
| Total shareholders’ deficit | |
| (37,748 | ) | |
| (145,936 | ) |
| Total liabilities and shareholders’ equity | |
| 8,848,337 | | |
| 22,141,445 | |
The accompanying notes are an integral part of
the financial statements.
MIRAI CO., LTD.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Revenues | |
| 33,261,072 | | |
| 38,067,870 | |
| Cost of revenues | |
| (33,190,775 | ) | |
| (37,999,313 | ) |
| | |
| | | |
| | |
| Gross profit | |
| 70,297 | | |
| 68,557 | |
| | |
| | | |
| | |
| General and administrative expenses | |
| (63,981 | ) | |
| (62,065 | ) |
| Reversal of allowance/(allowance) of credit losses | |
| 126,538 | | |
| (210,857 | ) |
| Income/(loss) from operations | |
| 132,854 | | |
| (204,365 | ) |
| | |
| | | |
| | |
| Interest income | |
| 97 | | |
| 4 | |
| Other income | |
| — | | |
| 3 | |
| Income/(loss) before income tax | |
| 132,951 | | |
| (204,358 | ) |
| Income tax (expenses)/credits | |
| (30,237 | ) | |
| 45,332 | |
| Net income/(loss) | |
| 102,714 | | |
| (159,026 | ) |
| | |
| | | |
| | |
| Other comprehensive income/(loss): | |
| | | |
| | |
| Net change in foreign currency translation adjustment | |
| 5,474 | | |
| (6,937 | ) |
| Total comprehensive income/(loss) | |
| 108,188 | | |
| (165,963 | ) |
| | |
| | | |
| | |
| Earnings/(losses) per share: | |
| | | |
| | |
| Basic and diluted earnings/(losses) per share | |
| 1,711.9 | | |
| (2,650.4 | ) |
| | |
| | | |
| | |
| Weighted average number of shares of common stock outstanding: | |
| | | |
| | |
| – Basic and diluted | |
| 60 | | |
| 60 | |
The accompanying notes are an integral part of
the financial statements.
MIRAI CO., LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY/(DEFICIT)
| | |
Common stocks | | |
Accumulated
other
comprehensive
income/(loss) | | |
Accumulated
deficits | | |
Total
shareholders’
deficit | |
| | |
Number | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
| Balance as of October 6, 2023 (date of inception) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Issuance of shares | |
| 60 | | |
| 20,027 | | |
| — | | |
| — | | |
| 20,027 | |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (159,026 | ) | |
| (159,026 | ) |
| Foreign currency translation adjustment, net of nil income taxes | |
| — | | |
| — | | |
| (6,937 | ) | |
| — | | |
| (6,937 | ) |
| Balance as of September 30, 2024 | |
| 60 | | |
| 20,027 | | |
| (6,937 | ) | |
| (159,026 | ) | |
| (145,936 | ) |
| Net income | |
| — | | |
| — | | |
| — | | |
| 102,714 | | |
| 102,714 | |
| Foreign currency translation adjustment, net of nil income taxes | |
| — | | |
| — | | |
| 5,474 | | |
| — | | |
| 5,474 | |
| Balance as of September 30, 2025 | |
| 60 | | |
| 20,027 | | |
| (1,463 | ) | |
| (56,312 | ) | |
| (37,748 | ) |
The accompanying notes are an integral part of
the financial statements.
MIRAI CO., LTD.
STATEMENTS OF CASH FLOWS
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Cash flows from operating activities | |
| | | |
| | |
| Net income/(loss) | |
| 102,714 | | |
| (159,026 | ) |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
| Deferred income tax | |
| 28,332 | | |
| (47,211 | ) |
| Amortization of intangible assets | |
| 1,146 | | |
| — | |
| (Reversal of allowance)/allowance of credit losses | |
| (126,538 | ) | |
| 210,857 | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable, net | |
| 12,653,803 | | |
| (21,085,680 | ) |
| Prepayments | |
| (98,914 | ) | |
| (94,411 | ) |
| Accounts payable | |
| (12,694,309 | ) | |
| 21,234,968 | |
| Accrued expenses and other current liabilities | |
| 106,016 | | |
| 324 | |
| Current tax liabilities | |
| (2,834 | ) | |
| 3,407 | |
| Net cash (used in)/provided by operating activities | |
| (30,584 | ) | |
| 63,228 | |
| | |
| | | |
| | |
| Cash flows from investing activities | |
| | | |
| | |
| Purchases of intangible assets | |
| (34,395 | ) | |
| — | |
| Net cash used in investing activities | |
| (34,395 | ) | |
| — | |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Issuance of shares | |
| — | | |
| 20,027 | |
| Net cash provided by financing activities | |
| — | | |
| 20,027 | |
| | |
| | | |
| | |
| Net
(decrease)/increase in cash and cash equivalents | |
| (64,979 | ) | |
| 83,255 | |
| | |
| | | |
| | |
| Cash and cash equivalents, beginning of the year | |
| 87,293 | | |
| — | |
| | |
| | | |
| | |
| Effect of movements in exchange rate on cash, cash equivalents and restricted cash | |
| (3,302 | ) | |
| 4,038 | |
| | |
| | | |
| | |
| Cash and cash equivalents, end of the year | |
| 19,012 | | |
| 87,293 | |
| | |
| | | |
| | |
| Supplemental disclosure of cash flows information | |
| | | |
| | |
| Cash paid during the year for income tax | |
| 1,894 | | |
| — | |
The accompanying notes are an integral part of
the financial statements.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
1. SUMMARY
OF BUSINESS
Mirai Co., Ltd. (“Mirai”)
is a limited liability company incorporated in Japan on October 6, 2023. The principal activity of Mirai is the supply of consumer
electronics and cosmeceutical products to corporate distributors.
2. SIGNIFICANT
ACCOUNTING POLICIES
(a) Basis
of presentation
The accompanying financial statements
are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”)
and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
(b) Segments
ASC 280, Segment Reporting, establishes
standards for reporting information about operating segments on a basis consistent with Mirai’s internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for detailing Mirai’s
business segments. Based on the criteria established by ASC 280, Mirai’s chief operating decision maker (“CODM”)
has been identified as the Director, who reviews results when making decisions about allocating resources and assessing performance of
Mirai. As a whole and hence, Mirai operates in one reportable segment and solely within Japan. Mirai does not distinguish between markets
or segments for the purpose of internal reporting. Accordingly, no segment or geographic information has been presented.
(c) Use
of estimates
The preparation of these financial
statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is
revised and in any future periods affected. Areas requiring a significant degree of estimation include the allowance for credit losses.
(d) Financial
instruments
Financial instruments of Mirai primarily
consist of cash held in banks, accounts receivable, net, other receivables, accounts payable, accrued expenses and other current liabilities.
The carrying values of Mirai’s financial instruments approximate their fair values, principally because of the short-term maturity
of these instruments or their terms.
Mirai has no derivative financial instruments.
(e) Cash
and cash equivalents
Cash and cash equivalents consist of
cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months
or less when purchased.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(f) Revenue
recognition
Mirai applies ASC Topic 606, Revenue
from Contracts with Customers (“ASC 606”), for all periods presented in the financial statements. To determine the appropriate
amount of revenue to be recognized in accordance with ASC 606, Mirai follows a five-step model as follows:
1 — Identification of the contract
with a customer
2 — Identification of the performance
obligation in the contract
3 — Determination of the transaction
price
4 — Allocation of the transaction
price to the performance obligation in the contract
5 — Recognition of revenue when,
or as, a performance obligation is satisfied
The transaction price is the amount
of consideration to which Mirai expects to be entitled in exchange for transferring promised goods to a customer. The transaction price
is generally fixed. None of Mirai’s contracts contain a significant financing component. Revenue is recognized net of any taxes
collected from customers, which are subsequently remitted to government entities.
Mirai generate revenues primarily through
sales of consumer electronics and cosmeceutical products to external customers. Sales of products are for cash or otherwise agreed-upon
credit terms. The payment terms vary by location and customer. The revenue generating activities have a single performance obligation
and are recognized at the point in time when control transfers and obligation has been fulfilled. Revenue is measured as the amount of
consideration Mirai expects to receive in exchange for products. The sales terms do not allow for a right of return except for matters
related to any defects on Mirai’s part.
Mirai recognized revenue from the sale
of products at the point in time when the goods were delivered and title to the goods passed to the customer, provided that there were
no uncertainties regarding customer acceptance; persuasive evidence of an arrangement existed; the sales price was fixed or determinable;
and collectability was deemed probable.
Principal vs. Agent Considerations
In accordance with the guidance under
ASC 606, Mirai has assessed whether it acts as a principal or an agent in transactions involving customers and suppliers. Mirai has concluded
that it acts as a principal.
For sales of products, Mirai obtains
control of the products before they are transferred to end users (customers), and it has the ability to direct the suppliers to supply
the products as well as logistics services. Mirai is contractually responsible for fulfilling the performance obligations to the customers
under separate agreements. As such, Mirai controls the specified goods before they are transferred to the customer.
(g) Accounts
receivable
Accounts receivable are stated at the
amount Mirai expects to collect. Mirai maintains allowances for credit losses for estimated losses. In accordance with ASC 326 Financial
Instruments — Credit Losses, Mirai estimates the allowance for expected credit losses based on expected future uncollectible
accounts receivable using forecasts of future economic conditions, in addition to information about past events and current conditions.
Management considers the following
factors when determining the collectability of specific accounts: historical experience, creditworthiness of the clients, aging of the
receivables, and other specific circumstances related to the accounts. Allowance for credit losses is made and recorded into administrative
expenses based on the aging of accounts receivable and on any specifically identified receivables that may become uncollectible. Accounts
receivable which are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted
and the potential for recovery is considered remote. Mirai recognized allowance for credit losses of US$210,857 during the year ended
September 30, 2024 and a reversal of allowance for credit losses of US$126,538 during the year ended September 30, 2025.
There was no write-off during the years ended September 30, 2024 and 2025.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(h) Intangible
assets
Intangible assets that are acquired
by Mirai and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses. These
assets include computer software. Amortization for intangible assets with finite useful lives is calculated based on the cost of intangible
assets less their estimated residual values using the straight-line method over their estimated useful lives, from the date that they
are available for use and is recognized in profit or loss. Amortization is calculated on a straight-line basis over the estimated useful
lives of 5 years. Finite-lived intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that
the carrying amount of intangible asset may not be recoverable. Impairment loss is recognized if the carrying amount of intangible asset
exceeds undiscounted future cash flows, measured as the excess of carrying amount over fair value.
An intangible asset is derecognized
on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible
asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or
loss when the asset is derecognized.
As of September 30, 2025 and 2024,
Mirai assessed and found that there was no impairment on intangible assets.
(i) Earning
per share
Mirai computes earnings per share (“EPS”)
according with ASC 260, Earnings per Share. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is computed by dividing
net earnings attributable to common stockholders by the weighted-average number of common stocks outstanding during the period. Diluted
EPS further takes into account of the potential dilution that could occur if securities or other contracts to issue common stocks were
exercised and converted into common stocks. As of September 30, 2025 and 2024, Mirai had no dilutive potential shares.
(j) Related
parties
Parties are considered to be related
if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party
in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant
influence of the same party, such as a family member or relative, shareholder, or a related corporation.
(k) Foreign
currency translation
The reporting currency of Mirai is
the United States dollars (“USD” or “US$”). Mirai’s operations are conducted in Japan which use Japanese
Yen (“JPY”) as functional currency.
Monetary assets and liabilities denominated
in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange
at the balance sheet date. Transactions in currencies other than the functional currency are converted into the functional currency at
the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the statements of
operations and comprehensive income/(loss).
In translating the financial statements
of Mirai in functional currency into the reporting currency, assets and liabilities are translated from the functional currency to the
reporting currency at the exchange rate at the balance sheet date. Equity amounts are translated at historical exchange rates; revenues,
expenses, and other gains and losses are translated using the average rate for the period. Translation adjustments are reported as cumulative
translation adjustments and are shown as a separate component of other comprehensive income/(loss) in the statements of operations and
comprehensive income/(loss).
The following exchange rates, representing
the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board, were used to translate the amounts
from the functional currency JPY into the reporting currency US$ for the respective periods:
| | |
September 30, 2025 | |
September 30, 2024 |
| Year end exchange rate | |
US$1.00 to JPY147.97 | |
US$1.00 to JPY143.25 |
| Year average exchange rate | |
US$1.00 to JPY149.15 | |
US$1.00 to JPY150.32 |
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(l) Income
taxes
Income taxes are provided for in accordance
with the laws and regulations applicable to Mirai as enacted by the relevant tax authorities. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases (“temporary differences”). Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred
tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred
tax is charged or credited in the statements of operations and comprehensive income/(loss), except when it is related to items credited
or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities
of a change in tax rate is recognized in income in the period that includes the enactment date. The impact of an uncertain income tax
position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit of the related
tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. As of
September 30, 2025 and 2024, Mirai had no uncertain income tax position. For the years ended September 30, 2025 and 2024, Mirai
did not incur any interest and penalties related to potential underpaid income tax expenses. Changes in recognition or measurement are
reflected in the period in which the change in judgment occurs. Penalties and interests incurred related to underpayment of income tax
are classified as income tax expense in the period incurred.
(m) Share capital
Common stocks are classified as equity.
Proceeds from the issuance of common stocks are recorded in share capital at par value, with any excess over par value recorded in additional
paid-in capital. Incremental costs directly attributable to the issuance of new shares are deducted from equity, net of any related income
tax benefit.
Dividends on common stocks are recognized
in equity in the period in which they are declared by the Board of Directors or approved by shareholders, as applicable.
(n)
Fair value measurement
Mirai defines fair value as the price
that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date.
When determining the fair value measurements
for assets and liabilities required or permitted to be recorded at fair value, Mirai considers the principal or most advantageous market
in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Mirai follows the provisions of ASC 820,
Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1 applies to assets or liabilities
for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities
for which there are inputs, other than quoted prices in level, that are observable for the asset or liability such as quoted prices for
similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume
or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived
principally from, or corroborated by, observable market data.
Level 3 applies to assets or liabilities
for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the
asset or liability.
The carrying value of financial instruments
included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT
ACCOUNTING POLICIES (cont.)
(o) Commitments and contingencies
In the normal course of business, Mirai
is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters,
including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency
is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. As of September 30,
2025 and 2024, Mirai had no such potential material loss contingency.
(p) Recently
issued accounting pronouncements
Accounting pronouncements adopted
by Mirai
In November 2023, the FASB issued
ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements
by requiring disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported
measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified
as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance
and deciding how to allocate resources. Mirai adopted this standard for the year beginning October 1, 2023 and the adoption did not have a material impact on the financial statements.
In December 2023, the FASB issued
ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s
effective tax rate reconciliation as well as additional information on income taxes paid. For public business entities (PBEs), the ASU
is effective for annual periods beginning after December 15, 2024. For all other entities (i.e. non-PBEs), the ASU is effective for annual
periods beginning after December 15, 2025. Early adoption is permitted. Mirai adopted this standard for the year beginning October 1,
2023 and the adoption did not have a material impact on the financial statements.
Accounting pronouncements not yet
adopted by Mirai
In November 2024, the FASB issued
ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific
expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement
captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The
ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after
December 15, 2027. Adoption of this ASU can either be applied prospectively to financial statements issued for reporting periods
after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. Early adoption
is also permitted. This ASU will likely result in the required additional disclosures being included in the financial statements, once
adopted.
In July 2025, the FASB issued
ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.
The ASU provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset
when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted
for under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2025, and for interim periods
within those annual reporting periods, with early adoption permitted. The amendments in ASU 2025-05 should be applied prospectively.
Mirai is reviewing the impact of these
accounting pronouncements but does not currently expect the adoption of these to have a material impact on its financial statements.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
3. GOING
CONCERN
Mirai has evaluated whether there are
certain conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern
within one year after the date that the financial statements were available to be issued.
As of September 30, 2025, Mirai’s
current liabilities exceeded its current assets by US$90,664 and it attained negative equity of US$37,748. These conditions indicate uncertainties
that cast significant doubt upon Mirai’s ability to continue as a going concern.
Mirai has funded its operations and
capital needs primarily through the net proceeds received from operations. Management has reviewed Mirai’s financial position, cash
flows and trading performance for the period subsequent to the year end date to the date of these financial statements. During this post
year end date period, Mirai generated operating profits and received cash inflows from its operations. As a result of the profit generation
and positive cash inflows, Mirai’s net current liabilities and negative equity were alleviated.
Management has assessed that the underlying
operating performance and cash position are sustainable for at least twelve months from the date of approval of these financial statements.
On such basis, management concludes that although substantial doubt initially existed, such substantial doubt has been alleviated by management’s
plans and subsequent operating performance.
4. REVENUES
Revenues represent the invoiced sales
of products to customers. Mirai has one operating business segment, which is the supply of consumer electronics and cosmeceutical products
business.
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Revenues | |
| | | |
| | |
| Sales of goods, recognized at a point in time | |
| 33,261,072 | | |
| 38,067,870 | |
All revenue is derived in Japan.
A concentration analysis of the revenues
is as follows:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| Customer A | |
| 37.0 | % | |
| 86.7 | % |
| Customer B | |
| 25.1 | % | |
| — | |
| Customer C | |
| 17.9 | % | |
| — | |
| Customer D | |
| 14.6 | % | |
| * | % |
*Less than 10%
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
5. INTANGIBLE
ASSETS, NET
Intangible assets, net, consist of
the following:
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Computer software, finite-lived | |
| 34,669 | | |
| — | |
| Less: accumulated amortization | |
| (1,156 | ) | |
| — | |
| Intangible assets, net | |
| 33,513 | | |
| — | |
Future amortization expenses of finite-lived
intangible assets are as follows:
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Year ended September 30, 2026 | |
| 6,934 | | |
| — | |
| Year ended September 30, 2027 | |
| 6,934 | | |
| — | |
| Year ended September 30, 2028 | |
| 6,934 | | |
| — | |
| Year ended September 30, 2029 | |
| 6,934 | | |
| — | |
| Year ended September 30, 2030 | |
| 5,777 | | |
| — | |
| Total future amortization expenses | |
| 33,513 | | |
| — | |
6. ACCOUNTS
RECEIVABLE, NET
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Accounts receivable | |
| 8,666,139 | | |
| 22,126,805 | |
| Less: allowance for credit losses | |
| (86,661 | ) | |
| (221,268 | ) |
| Accounts receivable, net | |
| 8,579,478 | | |
| 21,905,537 | |
Mirai normally allows credit terms
to customers of 90 days. Mirai seeks to maintain strict control over its accounts receivable. Overdue accounts receivable is reviewed
regularly by the Director.
Activities related to allowance for
credit losses are presented below.
| | |
Year Ended September 30,
2025 | | |
Year Ended September 30,
2024 | |
| | |
US$ | | |
US$ | |
| At beginning of year | |
| 221,268 | | |
| — | |
| (Reversal of allowance)/ allowance for the year | |
| (126,538 | ) | |
| 210,857 | |
| Foreign exchange differences | |
| (8,069 | ) | |
| 10,411 | |
| At end of year | |
| 86,661 | | |
| 221,268 | |
A concentration analysis of accounts
receivable is as follows:
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| Customer A | |
| 11.5 | % | |
| 79.9 | % |
| Customer B | |
| 86.3 | % | |
| — | |
| Customer D | |
| — | | |
| 10.0 | % |
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
7. CASH
AND CASH EQUIVALENTS
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Cash held in banks | |
| 11,440 | | |
| 72,985 | |
| Cash held on hand | |
| 7,572 | | |
| 14,308 | |
| | |
| 19,012 | | |
| 87,293 | |
Cash and cash equivalents were maintained
in Japan.
Cash held in banks earns interest at
floating rates based on daily bank deposit rates.
8. PREPAYMENTS
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Prepayments for purchases of goods | |
| 195,616 | | |
| 99,073 | |
9. ACCOUNTS
PAYABLE
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Accounts payable | |
| 8,776,972 | | |
| 22,283,465 | |
Mirai normally obtains credit terms
ranging from 30 to 90 days from suppliers.
A concentration analysis of accounts
payable is as follows:
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| Supplier A | |
| 68.8 | % | |
| 99.4 | % |
| Supplier B | |
| 14.6 | % | |
| — | |
| Supplier C | |
| 11.2 | % | |
| — | |
A concentration analysis of the suppliers based on the purchases made during the years is as follows:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| Supplier A | |
| — | | |
| 98.8 | % |
| Supplier B | |
| 23.1 | % | |
| — | |
| Supplier C | |
| 48.1 | % | |
| — | |
| Supplier D | |
| 10.7 | % | |
| * | % |
*Less than 10%
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
10. SHARE
CAPITAL
Balance sheets as of September 30,
2025 and 2024:
| Number of shares | |
| | |
| – issued and fully paid | |
| 60 | |
| Value (US$) | |
| 20,027 | |
11. EARNINGS/(LOSSES)
PER SHARE
The following table sets forth the
computation of basic and diluted earnings/(losses) per share for the years ended September 30, 2025 and 2024:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| Earnings/(losses) per share (US$) | |
| | | |
| | |
| – basic and diluted | |
| 1,711.9 | | |
| (2,650.4 | ) |
| | |
| | | |
| | |
| Weighted average number of shares in issue for the year | |
| | | |
| | |
| – basic and diluted | |
| 60 | | |
| 60 | |
Earnings/(losses) per share is calculated
by dividing the net income attributable to owners of Mirai by the weighted average number of shares in issue throughout the financial
periods. Mirai used weighted average of 60 shares for the purpose of calculating earnings per share on the assumption that the issuance
of share of Mirai had been effective throughout the year ended September 30, 2025 and 2024.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
12. INCOME
TAX EXPENSES/(CREDITS)
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Current income tax expense | |
| 1,905 | | |
| 1,879 | |
| Deferred income tax expense/(credit) | |
| 28,332 | | |
| (47,211 | ) |
| Total income tax expenses/(credits) | |
| 30,237 | | |
| (45,332 | ) |
Mirai is subject to Japan national
and local corporate taxes. The applicable statutory effective tax rate is 30.6% according to the Japan tax laws.
Income/(loss) before income tax is
attributable to the following geographic location:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Japan | |
| 132,951 | | |
| (204,358 | ) |
| | |
| | | |
| | |
A reconciliation of the difference
between the expected income tax expenses/(credits) computed at Japan statutory effective tax rate of 30.6% and Mirai’s reported
income tax expenses/(credits) is set out below:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Income/(loss) before income tax | |
| 132,951 | | |
| (204,358 | ) |
| Computed with Japan statutory effective tax rate of 30.6% | |
| 40,683 | | |
| (62,534 | ) |
| Preferential tax relief adjustment | |
| (12,231 | ) | |
| 18,801 | |
| Others | |
| 1,785 | | |
| (1,599 | ) |
| Income tax expenses/(credits) | |
| 30,237 | | |
| (45,332 | ) |
The significant components of the deferred
tax account balances are as follows:
| | |
As of
September 30,
2025 | | |
As of
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Deferred tax assets | |
| | | |
| | |
| Allowance of credit losses | |
| 19,403 | | |
| 49,542 | |
Mirai considers positive and negative
evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers,
among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory
carry forward periods, its experience with tax attributes expiring unused and tax planning alternatives. No valuation allowances have
been established for deferred tax assets based on a more-likely-than-not threshold.
Mirai had no material unutilized net
operating loss nor other unrecognized temporary differences as at September 30, 2025 and September 30, 2024.
As of September 30, 2025 and September 30,
2024, Mirai had no open tax investigation from the tax authority.
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
13. SEGMENT
INFORMATION
Reportable Segments
Mirai operates as a single reportable
segment, which is consistent with how the CODM, the Director, allocates resources and assesses performance. All the revenues are derived
in Japan. Long-lived assets consist primarily of intangible assets are located in Japan. Mirai’s operations are centralized and
integrated. Accordingly, management has determined that Mirai has one reportable segment under ASC Topic 280, Segment Reporting.
Measure of Segment Profit or Loss
The CODM reviews financial information
using Operating Income as the primary measure of segment performance. Operating Income is defined as revenues less cost of revenues, general
and administrative expenses, excluding interest income, other income and income taxes.
Significant Segment Expense Categories
Provided to CODM
The CODM regularly receives and reviews
the following expense categories, which are included in the segment’s measure of profit or loss.
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Revenues | |
| 33,261,072 | | |
| 38,067,870 | |
| | |
| | | |
| | |
| Cost of revenues | |
| (33,190,775 | ) | |
| (37,999,313 | ) |
| | |
| | | |
| | |
| Reversal of allowance/(allowance) of credit losses | |
| 126,538 | | |
| (210,857 | ) |
| | |
| | | |
| | |
| General and administrative expenses | |
| | | |
| | |
| – Amortization | |
| (1,146 | ) | |
| — | |
| – Entertainment | |
| — | | |
| (21,641 | ) |
| – Professional fee | |
| (47,267 | ) | |
| (23,948 | ) |
| – Staff costs | |
| (14,616 | ) | |
| (6,985 | ) |
| – Others | |
| (952 | ) | |
| (9,491 | ) |
| | |
| | | |
| | |
| Operating income/(loss) | |
| 132,854 | | |
| (204,365 | ) |
Reconciliation of segment operating
income/(loss) to net income/(loss) is set out below:
| | |
Year Ended
September 30,
2025 | | |
Year Ended
September 30,
2024 | |
| | |
US$ | | |
US$ | |
| Total segment operating income/(loss) | |
| 132,854 | | |
| (204,365 | ) |
| Interest income | |
| 97 | | |
| 4 | |
| Other income | |
| — | | |
| 3 | |
| Income tax (expenses)/credits | |
| (30,237 | ) | |
| 45,332 | |
| Net income/(loss) | |
| 102,714 | | |
| (159,026 | ) |
MIRAI CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
14. RELATED
PARTY BALANCES AND TRANSACTIONS
Nature of relationships with related
parties
| Name |
|
Relationship with the related parties |
| Leyong Lin |
|
Principal shareholder and sole director |
Transactions and balances with related
parties
During the years ended September 30, 2025
and 2024, Mirai had no transactions and balances with related parties.
15. COMMITMENTS
AND CONTINGENCIES
At the end of each reporting period,
Mirai had no significant contingent liabilities, capital and other commitments.
16. RISKS
AND UNCERTAINTIES
Credit risk
Credit risk is the potential financial
loss to Mirai resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to Mirai,
as and when they fall due. As Mirai does not hold any collateral, the maximum exposure to credit risk is the carrying amounts of accounts
receivable, other receivables and cash and cash equivalents presented on the balance sheets. Mirai has no other financial assets which
carry significant exposure to credit risk.
Interest rate risk
Fluctuations in market interest rates
may negatively affect our financial condition and results of operations. Mirai had interest-bearing deposits at banks as of September 30,
2025 and 2024. However, the related interest income was insignificant so the risks due to changes in interest rates are not material.
Mirai has not used any derivative financial instruments to manage its interest risk exposure.
Liquidity risk
Liquidity risk is the risk that Mirai
will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or
another financial asset. Mirai’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to reputation.
Typically, Mirai ensures that it has
sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations;
this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
17.
SUBSEQUENT EVENTS
These financial statements were approved
by the Director and were available for issuance on June 26, 2026 and Mirai has evaluated
subsequent events through to the date of these financial statements. No material adjusting subsequent events have arisen.
There are no material non-adjusting
subsequent events except for that on May 6, 2026, Leyong Lin, the principal shareholder of Mirai, entered into agreements with Mansions
Catering and Hotel LTD, a United Kingdom company and a wholly-owned subsidiary of MDJM LTD, a company listed in the United States, for
the sale of 75% issued and outstanding shares of Mirai at a total consideration of US$999,750. The transaction is subject to conditions
precedent to completion. No adjustments have been made to the financial statements in relation to this transaction.
Exhibit 99.2
MDJM LTD
THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION
AS OF, AND FOR THE YEAR ENDED DECEMBER 31, 2025
The following unaudited pro forma condensed combined
financial statements and accompanying notes reflect the pro forma effects of the following transactions (the “Transaction”):
On May 6, 2026, Mansions Catering and
Hotel LTD, a United Kingdom company and a wholly-owned subsidiary of MDJM LTD (the “Company”), entered into a Share
Purchase Agreement (the “Purchase Agreement”) with Leyong Lin (林楽勇), the holder of 100% of the
issued and outstanding shares of common stock of Mirai Co., Ltd. (“Mirai”), pursuant to which Mansions Catering and
Hotel LTD agreed to purchase from Leyong Lin 75% of the issued and outstanding shares of Mirai (the “Shares”), a
corporation incorporated under the laws of Japan, subject to the terms and conditions set forth in the Purchase Agreement. The
aggregate purchase price for the Shares was US$1,000,000, subject to adjustment, reduction, set-off or credit as expressly set forth
in the Purchase Agreement. The consideration is to be fulfilled in three installments. As of the date of this report, Mansions
Catering and Hotel LTD has paid cash in a total of US$580,000 as the first and second installments of the consideration. The third
installment of US$420,000 (“Third Installment”) is payable after the closing of the acquisition, subject to the
satisfaction of certain post-closing payment conditions.
On
June 11, 2026, Mansions Catering and Hotel LTD, Leyong Lin (林楽勇), Mirai and the Company entered into an amendment
to the Purchase Agreement, and pursuant to which the Third Installment shall be satisfied by the issuance of 730,000 new Class
A ordinary shares of the Company at a deemed issuance price of US$0.575 per share.
The unaudited pro forma condensed combined financial
statements are presented for illustrative purposes only and are not necessarily indicative of the financial position or results of operations
that would have actually been reported had the acquisition described above occurred on the beginning of the earliest period presented
for statement of operations purposes and as of the year end date for balance sheet purposes, nor is it necessarily indicative of the future
financial position or results of operations. The unaudited pro forma condensed combined financial statements include adjustments, which
are based upon preliminary estimates, to reflect the allocation of the purchase price to the acquired assets and assumed liabilities of
Mirai. The final allocation of the purchase price will be based upon actual net tangible and intangible assets acquired as well as liabilities
assumed. The preliminary purchase price allocation for Mirai is subject to revision as more detailed analysis is completed and additional
information on the fair values of Mirai’ assets and liabilities becomes available. Any change in the fair value of the net assets
of Mirai will change the amount of the purchase price allocable to goodwill. Final purchase accounting adjustments may differ materially
from the pro forma adjustments presented here.
The unaudited pro forma condensed combined balance
sheet assumes that the Transaction was completed on the fiscal year end date. The unaudited pro forma condensed combined statement of
operations for the fiscal year ended assumes the Transaction was completed at the beginning of the earliest period presented and reflect
the pro forma operating results of Mirai for its fiscal year ended September 30, 2025 and the pro forma operating results of the Company
and its subsidiaries (together, “MDJM”) for its fiscal year ended December 31, 2025, derived from MDJM’s audited financial
statements for such period.
The Company prepares its financial statements
in accordance with U.S. Generally Accepted Accounting Principles. The unaudited pro forma condensed combined financial statements were
prepared in accordance with the rules and regulations of the SEC and should not be considered indicative of the financial position or
results of operations that would have occurred if the Transaction had been completed on the dates indicated, nor are they indicative of
the future financial position or results of operations of the MDJM and Mirai following completion of the Transaction. The historical financial
information of Mirai has been adjusted in the unaudited pro forma condensed combined financial statements to give effect to pro forma
events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statement of operations,
expected to have a continuing impact on the combined results.
The unaudited pro forma condensed combined financial
information should be read in conjunction with the accompanying notes thereto. In addition, the unaudited pro forma condensed combined
financial information was based on, and should be read in conjunction with:
| - | The separate historical consolidated financial statements of MDJM as of and for the fiscal year ended
December 31, 2025 and the related notes included in MDJM’s Annual Report on Form 20-F for the fiscal year ended December 31, 2025,
filed with the SEC on April 1, 2026; and |
| - | The separate audited historical financial statements of Mirai as of and for the year ended September
30, 2025. |
MDJM LTD AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEET (Unaudited)
| | |
Historical | |
| |
Pro forma | |
| | |
MDJM | | |
Mirai | |
| |
| | |
| |
| | |
| | |
| |
| |
| | |
| |
| | |
Audited
balances as at
December 31,
2025 | | |
Audited
balances as at
September 30,
2025 | |
| |
Adjustments | | |
Combined | |
| | |
US$ | | |
US$ | |
| |
US$ | | |
US$ | |
| ASSETS: | |
| | | |
| | |
| |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| |
| | | |
| | |
| Cash, cash equivalents, and restricted cash | |
| 700,479 | | |
| 19,012 | |
(Note 2) | |
| (580,000 | ) | |
| 109,491 | |
| | |
| | | |
| | |
(Note 3) | |
| (30,000 | ) | |
| | |
| Accounts receivable, net | |
| — | | |
| 8,579,478 | |
| |
| | | |
| 8,579,478 | |
| Prepayments | |
| 122,013 | | |
| 195,616 | |
| |
| | | |
| 317,629 | |
| Other receivables | |
| 14,805 | | |
| 1,315 | |
| |
| | | |
| 16,120 | |
| Total current assets | |
| 837,297 | | |
| 8,795,421 | |
| |
| | | |
| 9,022,718 | |
| | |
| | | |
| | |
| |
| | | |
| | |
| Non-current assets: | |
| | | |
| | |
| |
| | | |
| | |
| Goodwill | |
| — | | |
| — | |
(Note 4) | |
| 1,028,061 | | |
| 1,028,061 | |
| Property and equipment, net | |
| 3,768,594 | | |
| — | |
| |
| | | |
| 3,768,594 | |
| Intangible assets, net | |
| 20,532 | | |
| 33,513 | |
| |
| | | |
| 54,045 | |
| VAT credit | |
| 9,441 | | |
| — | |
| |
| | | |
| 9,441 | |
| Deferred tax assets | |
| — | | |
| 19,403 | |
| |
| | | |
| 19,403 | |
| Total non-current assets | |
| 3,798,567 | | |
| 52,916 | |
| |
| | | |
| 4,879,544 | |
| Total assets | |
| 4,635,864 | | |
| 8,848,337 | |
| |
| | | |
| 13,902,262 | |
| | |
| | | |
| | |
| |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| |
| | | |
| | |
| Accounts payable and accrued liabilities | |
| 41,799 | | |
| 8,884,164 | |
(Note 3) | |
| 170,000 | | |
| 9,095,963 | |
| Deferred income | |
| 4,126 | | |
| — | |
| |
| | | |
| 4,126 | |
| Series A warrants liabilities | |
| 333,657 | | |
| — | |
| |
| | | |
| 333,657 | |
| Current tax liabilities | |
| — | | |
| 1,921 | |
| |
| | | |
| 1,921 | |
| Total current liabilities and total liabilities | |
| 379,582 | | |
| 8,886,085 | |
| |
| | | |
| 9,435,667 | |
| | |
| | | |
| | |
| |
| | | |
| | |
| Equity | |
| | | |
| | |
| |
| | | |
| | |
Shareholders’ equity/(deficit) attributable to owners of the
Company | |
| 4,256,282 | | |
| (37,748 | ) |
(Notes 2) | |
| 419,750 | | |
| 4,476,032 | |
| | |
| | | |
| | |
(Notes 3) | |
| (200,000 | ) | |
| | |
| | |
| | | |
| | |
(Notes 4) | |
| 37,748 | | |
| | |
| Non-controlling interest | |
| — | | |
| — | |
(Notes 4) | |
| (9,437 | ) | |
| (9,437 | ) |
| Shareholders’ equity/(deficit) | |
| 4,256,282 | | |
| (37,748 | ) |
| |
| | | |
| 4,466,595 | |
| Total liabilities and shareholders’ equity | |
| 4,635,864 | | |
| 8,848,337 | |
| |
| | | |
| 13,902,262 | |
The accompanying notes are an integral part of
these unaudited pro forma condensed combined financial statements.
MDJM LTD AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (Unaudited)
| | |
Historical | |
| |
Pro forma | |
| | |
MDJM | | |
Mirai | |
| |
| | |
| |
| | |
| | |
| |
| |
| | |
| |
| | |
Audited
balances for
the year
ended
December 31,
2025 | | |
Audited
balances for
the year
ended
September 30,
2025 | |
| |
Adjustments | | |
Combined | |
| | |
US$ | | |
US$ | |
| |
US$ | | |
US$ | |
| Revenues | |
| 89,664 | | |
| 33,261,072 | |
| |
| | | |
| 33,350,736 | |
| Cost of revenues | |
| — | | |
| (33,190,775 | ) |
| |
| | | |
| (33,190,775 | ) |
| Gross profit | |
| 89,664 | | |
| 70,297 | |
| |
| | | |
| 159,961 | |
| General and administrative expenses | |
| (1,260,002 | ) | |
| (63,981 | ) |
(Note 3) | |
| (200,000 | ) | |
| (1,525,716 | ) |
| | |
| | | |
| | |
(Note 5) | |
| (1,733 | ) | |
| | |
| Reversal of allowance of credit losses | |
| — | | |
| 126,538 | |
| |
| | | |
| 126,538 | |
| (Loss)/income from operations | |
| (1,170,338 | ) | |
| 132,854 | |
| |
| | | |
| (1,239,217 | ) |
| Interest income | |
| 25,805 | | |
| 97 | |
| |
| | | |
| 25,902 | |
| Other income and gains, net | |
| 1,103,212 | | |
| — | |
| |
| | | |
| 1,103,212 | |
| (Loss)/income before income tax expenses | |
| (41,321 | ) | |
| 132,951 | |
| |
| | | |
| (110,103 | ) |
| Income tax expenses | |
| — | | |
| (30,237 | ) |
| |
| | | |
| (30,237 | ) |
| Net (loss)/income | |
| (41,321 | ) | |
| 102,714 | |
| |
| | | |
| (140,340 | ) |
| Net income attributable to
non-controlling interest | |
| — | | |
| — | |
(Note 6) | |
| (25,245 | ) | |
| (25,245 | ) |
| Net (loss)income attributable to controlling interests | |
| (41,321 | ) | |
| 102,714 | |
| |
| | | |
| (115,095 | ) |
| | |
| | | |
| | |
| |
| | | |
| | |
| Losses per share: | |
| | | |
| | |
| |
| | | |
| | |
| Basic and diluted losses per share | |
| (1.36 | ) | |
| | |
| |
| | | |
| (0.15 | ) |
| | |
| | | |
| | |
| |
| | | |
| | |
| Weighted average shares outstanding: | |
| | | |
| | |
| |
| | | |
| | |
| Basic and diluted | |
| 30,374 | | |
| | |
(Note 2) | |
| 730,000 | | |
| 760,374 | |
The accompanying notes are an integral part of
these unaudited pro forma condensed combined financial statements.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
Note 1 — Basis of Presentation
The unaudited pro forma condensed combined
financial information and accompanying notes were prepared in accordance with Article 11 of Regulation S-X, after
giving effect to the Transaction and related financing transactions and other pro forma adjustments.
The Transaction is accounted for under the acquisition
method of accounting with MDJM as the accounting acquirer pursuant to ASC 805 and, accordingly, the assets and liabilities of Mirai presented
in these pro forma condensed combined financial statements have been adjusted to their estimated fair values based upon conditions
as of the date of the agreement and as if the Transaction had been effective at beginning of each period presented for unaudited pro forma
condensed combined statement of operations. The unaudited pro forma condensed combined financial information is presented for illustrative
purposes only and does not indicate the financial position or results of operations of the combined companies that would have been realized
had the Transaction been completed at the beginning of each period presented. The fair values are estimates as of the date of this filing
and actual amounts are still in the process of being finalized. Fair values are subject to refinement for up to one year after the closing
date as additional information regarding the closing date fair values become available.
The unaudited pro forma condensed combined financial
information does not reflect the impact of any potential restructuring or integration activities that have yet to be determined, nor the
impact of possible cost or growth synergies expected to be achieved by the combined companies, as no assurance can be made that such cost
or growth synergies will be achieved.
The unaudited pro forma condensed combined financial
information should be read in conjunction with the accompanying notes thereto.
Note 2 — Purchase Price
Under the terms and subject to the conditions
set forth in the Purchase Agreement, the aggregate purchase price for the Shares was US$1,000,000, subject to adjustment, reduction, set-off
or credit as expressly set forth in the Purchase Agreement. The consideration is to be fulfilled in three installments. As of the date
of this report, Mansions Catering and Hotel LTD has paid a total of US$580,000 as the first and second installments of the consideration.
Pursuant
to the amendment to the Purchase Agreement, the Third Instalment shall be satisfied by the issuance of 730,000 new Class A ordinary
shares of the Company at a deemed issuance price of US$0.575 per share.
Note 3 —Transaction Costs
MDJM is liable for an advisory fee of US$200,000
in relation to the Transaction. As of the date of this report, MDJM has paid a fee of US$30,000.
Note 4 — Preliminary Allocation
of Purchase Price
Under the acquisition method of accounting, the
total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of Mirai based on their estimated
fair value as of the closing of the Transaction. The excess of the purchase price over the fair value of the net assets or liabilities
acquired, net of deferred taxes, is allocated to goodwill. Estimated fair value adjustments included in the unaudited pro forma condensed
combined financial statements are based upon available information and certain assumptions considered reasonable may be revised as additional
information becomes available.
The following are the pro forma adjustment
estimates management expects to make to record the acquisition and adjust Mirai’s assets and liabilities to their estimated fair
values as of September 30, 2025.
| USD |
| Purchase price allocation: |
|
|
|
|
| |
|
|
|
|
| Purchase price |
|
|
|
|
| Cash consideration |
|
|
580,000 |
|
| Equity consideration |
|
|
419,750 |
|
| |
|
|
999,750 |
|
| |
|
|
|
|
| Historical book value of Mirai’s assets and liabilities as of September 30, 2025 |
|
|
(37,748 |
) |
| Non-controlling interest (proportionate share of net liabilities at 25%) |
|
|
(9,437 |
) |
| |
|
|
(28,311 |
) |
| |
|
|
|
|
| Goodwill |
|
|
1,028,061 |
|
Note 5 — Estimated Financial
Results of Mirai for the Stub Period from October 1, 2025 to December 31, 2025 (the “Stub Period”)
Mirai’s financial information is derived
from unaudited management accounts for the year ended September 30, 2025, being the latest complete financial information available. Mirai
does not prepare monthly or quarterly management accounts, trial balances or interim financial statements as the director of Mirai considers
the preparation of such financial information would involve additional time and cost that outweigh the benefit to Mirai as a private company.
For the purpose of preparing the unaudited pro
forma condensed combined statement of operations for the year ended December 31, 2025, management has estimated Mirai’s operating
results for the Stub Period based on the following:
| - |
The operating activities of Mirai are consistent year-on-year with seasonal fluctuation. The operating results of Mirai for the Stub Period are assumed to be consistent with those for the period from October 1, 2024 to December 31, 2024; and |
| - | Amortization expense on intangible assets newly acquired in 2025 for the Stub Period amounted to US$1,733. |
All pro forma stub-period adjustments are estimates
and actual results may differ materially. Estimation adjustments are limited to the unaudited pro forma condensed combined statement of
operations only. No adjustments have been made to Mirai’s balance sheet as of September 30, 2025.
Note 6 — Net Income of
Mirai Attributable to Non-controlling Interest
Minority shareholders hold 25% equity interest
of Mirai. Pro forma adjustment for net income of Mirai attributable to non-controlling interest is calculated as follows:
| USD |
| Net income for the year ended September 30, 2025 | |
| 102,714 | |
| Amortization expense for the Stub period | |
| (1,733 | ) |
| | |
| 100,981 | |
| | |
| | |
| Non-controlling interest (proportionate share at 25%) | |
| 25,245 | |
