Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on April 9, 2025 (the "Form 10-K") and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis should also be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in several places in this report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guaranteed of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this Quarterly Report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this Quarterly Report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

Company Overview

Greenpro Capital Corp. (the "Company" or "Greenpro") was incorporated in the State of Nevada on July 19, 2013. We provide cross-border business solutions and accounting outsourcing services to small and medium-sized businesses located in Asia, with an initial focus on Hong Kong, China and Malaysia. Greenpro provides a range of services as a package solution (the "Package Solution") to our clients, and we believe that our clients can reduce their business costs and improve their revenues.

In addition to our business solution services, we also operate a venture capital business through Greenpro Venture Capital Limited, an Anguilla corporation. One of our venture capital business segments focuses on (1) establishing a business incubator for start-up and high-growth companies to support such companies during critical growth periods, which will include education and support services, and (2) searching for investment opportunities in selected start-up and high-growth companies, which may generate significant returns to the Company. Our venture capital business focuses on companies located in Southeast Asia and East Asia, including Hong Kong, China, Malaysia, Thailand, and Singapore. Another venture capital business segment focuses on rental activities of commercial properties and the sale of investment properties.

One of our Labuan subsidiaries, Green-X Corp. ("Green-X"), was approved and compliant with all the requirements by Labuan Financial Services Authority (Lembaga Perkhidmatan Kewangan Labuan) in 2022 to establish a platform under Part IX of the Labuan Financial Services and Securities Act 2010 (LFSSA), pursuant to Section 134 of the LFSSA.

Green-X is a platform operator licensed under the LFSSA whereby security token issuers ("Issuers") offer their security tokens for subscription and trading by investors ("Investors") through the Green-X digital asset exchange ("Green-X DAX") platform. ISRA International Consulting Sdn. Bhd. ("ISRA Consulting" or "Shariah Adviser of the platform") is responsible for advising on and ensuring end-to-end Shariah compliance for the Green-X DAX platform's operations.

ISRA Consulting issued a Shariah pronouncement for the Green-X DAX platform (the "Pronouncement") on June 22, 2023. The Pronouncement was valid for one (1) renewable year from the signing date. Following the expiration of the Pronouncement, ISRA Consulting conducted a Shariah review exercise in preparation for its renewal. The Shariah review followed a specific methodology and serves as the basis for the renewal decision. Pursuant to the Shariah review, the Green-X DAX platform's operations and related documents complied with the principles of Shariah. The Pronouncement was renewed on September 20, 2024.

Results of Operations

During the three and nine months ended September 30, 2025, and 2024, we operated in three regions: Hong Kong, China and Malaysia. We derived revenues from the provision of business services, digital platform services and trading of digital assets, and leasing or trading of our commercial properties, respectively.

Comparison of the three months ended September 30, 2025, and 2024

Total revenue

Total revenue was $393,228 and $539,699 for the three months ended September 30, 2025, and 2024, respectively. The decreased amount of $146,471 was primarily due to a decrease in service business revenue. We expect revenue from our service business to steadily improve in the following months.

Service business revenue

Revenue from the provision of business services was $377,423 and $521,765 for the three months ended September 30, 2025, and 2024, respectively. It was derived principally from the provision of business consulting and advisory services, as well as company secretarial, accounting, and financial analysis services. We experienced a decrease in service business revenue as fewer non-listing advisory services were rendered during the three months ended September 30, 2025, as compared to the same period in 2024.

Digital revenue

There was no revenue generated from the digital platform and trading for the three months ended September 30, 2025, and 2024, respectively.

Real estate business

Rental revenue

Revenue from rentals was $15,805 and $17,934 for the three months ended September 30, 2025, and 2024, respectively. It was derived from the leasing properties in Malaysia and Hong Kong. We expect our rental income to be stable.

Sale of properties

There was no revenue generated from the sale of real estate properties for the three months ended September 30, 2025, and 2024, respectively.

Total operating costs and expenses

Total operating costs and expenses were $913,777 and $1,012,972 for the three months ended September 30, 2025, and 2024, respectively. They consist of cost-of-service revenue, cost of digital revenue, cost of rental revenue and general and administrative ("G&A") expenses. The Company incurred G&A expenses of $784,610 and $868,333 for the three months ended September 30, 2025, and 2024, respectively.

Loss from operations for the three months ended September 30, 2025, and 2024 was $520,549 and $473,273, respectively.

Cost of service business revenue

Cost of revenue on the provision of services was $125,135 and $138,404 for the three months ended September 30, 2025, and 2024, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to costs related to the services rendered.

The decrease in cost-of-service business revenue was mainly due to a decrease in other professional fees directly attributable to the provision of services for the three months ended September 30, 2025.

Cost of digital revenue

There was no cost of revenue incurred for the provision of digital platform services and trading of digital assets for the three months ended September 30, 2025, and 2024, respectively.

Cost of rental revenue

Cost of rental revenue was $4,032 and $6,235 for the three months ended September 30, 2025, and 2024, respectively. It includes the costs associated with governmental charges, repairs and maintenance, property management fees and insurance, depreciation, and other related administrative costs. Utility expenses are borne and paid directly by individual tenants. A decrease in the cost of rental revenue was mainly due to 40% of our Hong Kong subsidiary's real estate properties being distributed to its non-controlling interest in April 2024. As a result, fewer property units were available for leasing and lower costs were incurred.

Cost of real estate properties sold

During the three months ended September 30, 2025, and 2024, no real estate property was sold, and hence no cost was incurred.

General and administrative expenses

General and administrative ("G&A") expenses were $784,610 and $868,333 for the three months ended September 30, 2025, and 2024, respectively. For the three months ended September 30, 2025, G&A expenses primarily consisted of staff costs of $350,679, directors' salaries and compensation of $166,650, advertising and marketing expenses of $30,330, consulting fees of $43,322, computer and IT expenses of $4,495, legal service fees of $19,832, other professional fees of $38,891 and operating lease costs of $28,348. For the three months ended September 30, 2024, G&A expenses primarily consisted of staff costs of $382,873, directors' salaries and compensation of $167,032, advertising and marketing expenses of $75,133, consulting fees of $4,166, computer and IT expenses of $49,949, legal service fees of $33,760, other professional fees of $59,704 and operating lease costs of $28,598. The decreased G&A expense of $83,723 was mainly derived from the decrease in staff costs of $32,194, advertising and marketing expenses of $44,803, and computer and IT expenses of $45,454, offset by the increase in consulting fees of $39,156 during the same period in 2025. We expect our G&A expenses to slightly increase as we are developing our digital platform business through our Labuan subsidiary, Green-X Corp., and the digital banking businesses through Global Business Hub Limited, another Labuan subsidiary, which was acquired in 2024.

Other income

Net other income was $14,149 and $142,953 for the three months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025, net other income mainly consisted of related party other income of $2,674, interest income of $2,408 and fair value gain on digital assets of $1,426. For the three months ended September 30, 2024, net other income mainly consisted of related party other income of $9,699, gain on disposal of investment of $127,617 and interest income of $3,979.

Net loss

Net loss was $513,226 and $330,320 for the three months ended September 30, 2025, and 2024, respectively. The increase in net loss was mainly due to a decrease in service business revenue for the three months ended September 30, 2025.

Comparison of the nine months ended September 30, 2025, and 2024

Total revenue

Total revenue was $1,173,075 and $1,559,272 for the nine months ended September 30, 2025, and 2024, respectively. The decrease of $386,197 was primarily due to a decrease in service business revenue. We expect revenue from our service business to recover slightly as we are exploring new markets.

Service business revenue

Revenue from the provision of business services was $1,083,533 and $1,498,187 for the nine months ended September 30, 2025, and 2024, respectively. It was derived principally from the provision of business consulting and advisory services, as well as company secretarial, accounting, and financial analysis services. We experienced a decrease in service business revenue as fewer non-listing advisory services were rendered during the same period in 2025.

Digital revenue

Revenue from the digital platform and trading was $44,177 and $0 for the nine months ended September 30, 2025, and 2024, respectively. It was derived from the trading of digital assets of $43,425 and the sale of our digital assets, GX Token, of $752 during the nine months ended September 30, 2025.

Real estate business

Rental revenue

Revenue from rentals was $45,365 and $61,085 for the nine months ended September 30, 2025, and 2024, respectively. It was derived from the leasing properties in Malaysia and Hong Kong. We expect our rental income to be stable.

Sale of properties

There was no revenue generated from the sale of real estate properties for the nine months ended September 30, 2025, and 2024, respectively.

Total operating costs and expenses

Total operating costs and expenses were $2,984,218 and $3,107,878 for the nine months ended September 30, 2025, and 2024, respectively. They consist of cost-of-service revenue, cost of digital revenue, cost of rental revenue and general and administrative ("G&A") expenses. The Company incurred $2,677,605 and $2,839,641 of G&A expenses for the nine months ended September 30, 2025, and 2024, respectively.

Loss from operations for the nine months ended September 30, 2025, and 2024 was $1,811,143 and $1,548,606, respectively. An increase in the loss from operations was mainly due to a decrease in service business revenue of $414,654, offset by a decrease in G&A of $162,036 for the nine months ended September 30, 2025.

Cost of service business revenue

Cost of revenue from the provision of services was $295,411 and $249,112 for the nine months ended September 30, 2025, and 2024, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees, directly attributable to costs related to the services rendered.

The increase in the cost-of-service business revenue was mainly due to an increase in other professional fees directly attributable to the provision of services for the nine months ended September 30, 2025.

Cost of digital revenue

Cost of revenue for the provision of digital platform services and trading of digital assets was $1 and $0 for the nine months ended September 30, 2025, and 2024, respectively. It primarily consists of the cost of technical advisory and IT support to blockchain-based services, directly attributable to the cost of digital platforms and digital assets.

Cost of rental revenue

Cost of rental revenue was $11,201 and $19,125 for the nine months ended September 30, 2025, and 2024, respectively. It includes the costs associated with governmental charges, repairs and maintenance, property management fees and insurance, depreciation, and other related administrative costs. Utility expenses are borne and paid directly by individual tenants. A decrease in the cost of rental revenue was mainly due to 40% of our Hong Kong subsidiary's real estate properties being distributed to its non-controlling interest in April 2024. As a result, fewer property units were available for leasing and lower costs were incurred.

Cost of real estate properties sold

During the nine months ended September 30, 2025, and 2024, no real estate property was sold, and hence no cost was incurred.

General and administrative expenses

G&A expenses were $2,677,605 and $2,839,641 for the nine months ended September 30, 2025, and 2024, respectively. For the nine months ended September 30, 2025, G&A expenses consisted primarily of staff costs of $1,115,127, directors' salaries and compensation of $500,465, advertising and marketing expenses of $96,914, consulting fees of $144,387, computer and IT expenses of $112,522, legal service fees of $113,350, other professional fees of $137,461, provision for credit losses of $3,594 and operating lease costs of $84,868. For the nine months ended September 30, 2024, G&A expenses consisted primarily of staff costs of $1,133,284, directors' salaries and compensation of $503,611, advertising and marketing expenses of $194,054, consulting fees of $118,839, computer and IT expenses of $136,706, legal service fees of $119,176, other professional fees of $103,841, provision for credit losses of $90,243 and operating lease costs of $85,478. The decreased G&A expense of $162,036 was mainly derived from the decrease in advertising and marketing expenses of $97,140 and provision for credit losses of $86,649, offset by an increase in other professional fees of $33,620 during the same period in 2025. We expect our G&A expenses to slightly increase as we are developing our digital platform business through our Labuan subsidiary, Green-X Corp., and the digital banking businesses through Global Business Hub Limited, another Labuan subsidiary, which was acquired in 2024.

Other income

Net other income was $95,549 and $381,029 for the nine months ended September 30, 2025, and 2024, respectively. For the nine months ended September 30, 2025, net other income mainly consisted of related party other income of $31,697, gain on disposal of investment of $39,800 and interest income of $7,085. For the nine months ended September 30, 2024, net other income mainly consisted of related party other income of $35,565, gain on disposal of investments of $324,917 and interest income of $16,828.

Net loss

Net loss was $1,722,930 and $1,168,983 for the nine months ended September 30, 2025, and 2024, respectively. The increase in net loss was mainly due to a decrease in service business revenue and gains on disposal of investments.

Net loss attributable to non-controlling interest

The Company recorded net loss attributable to noncontrolling interest in the consolidated statements of operations for a non-controlling interest (the "NCI") of a consolidated subsidiary, Forward Win International Limited ("FWIL"), which is principally engaged in trading and leasing of properties in Hong Kong.

The Company had been a 60% shareholder of FWIL since its inception.

On April 15, 2024, the Company acquired the remaining 40% shares of FWIL from the NCI by the distribution of 40% of FWIL's real estate properties for consideration of its acquisition and settlement of a loan from the NCI (the "Acquisition").

After the Acquisition, FWIL becomes the wholly owned subsidiary of the Company, and hence no profit or loss was attributable to the NCI thereafter.

The Company recorded a net loss attributable to the NCI of $10,543 for the nine months ended September 30, 2024.

There were no seasonal aspects that had a material effect on the financial condition or the results of operations of the Company.

Other than as disclosed elsewhere in this Quarterly Report, we are not aware of any trends, uncertainties, demands, commitments or events for the nine months ended September 30, 2025 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

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 as of September 30, 2025.

Contractual Obligations

As of September 30, 2025, one of our subsidiaries has an operating lease agreement for one office space in Hong Kong with a non-cancellable term of two years from March 15, 2023, to March 14, 2025, and a cancellable term of one year from March 15, 2025, to March 14, 2026.

On September 30, 2025, the future minimum rental payments under this lease in the aggregate are approximately $44,490 and are due as follows: 2025: $24,483 and 2026: $20,007, respectively.

In June 2023, one of our subsidiaries in Malaysia purchased a motor vehicle, and the majority amount of the purchase, $18,957, was funded by Maybank Islamic under a finance lease agreement with a term of five years commencing from June 3, 2023, to June 2, 2028. As of September 30, 2025, the future minimum lease payments under this lease in the aggregate are approximately $13,049 and are due as follows: 2025: $1,224; 2026: $4,895; and 2027 and thereafter: $6,930.

Related Party Transactions

For the nine months ended September 30, 2025, and 2024, related party service revenue totaled $45,992 and $347,570, respectively.

For the nine months ended September 30, 2025, related party service revenue principally includes service revenue generated from SEATech Ventures Corp. ("SEATech") of $13,123 and Greenpro Trust Limited ("GTL") of $11,639, representing approximately 54% of the related party service revenue and 2% of the service revenue for the nine months ended September 30, 2025.

For the nine months ended September 30, 2024, related party service revenue principally includes service revenue generated from Celmonze Wellness Corporation ("Celmonze") of $149,030 and REBLOOD Biotech Corp. ("REBLOOD") of $63,632, representing approximately 61% of related party service revenue and 14% of service revenue for the nine months ended September 30, 2024, respectively.

For the nine months ended September 30, 2025, and 2024, cost of service revenue to related parties was $14,640 and $4,586, respectively.

For the nine months ended September 30, 2025, related party cost of service revenue includes cost of services paid to Falcon Management Limited ("FML") of $5,000, Falcon Consulting Limited ("FCL") of $2,140, and Loke Yu ("Jimmy") of $7,500, respectively. FML is wholly owned by our Chief Financial Officer, Loke, Che Chan Gilbert ("Mr. Loke"), FCL is wholly owned by Mr. Loke's spouse, and Jimmy is Mr. Loke's brother.

For the nine months ended September 30, 2024, related party cost of service revenue includes cost of revenue paid to FML of $2,555 and FCL of $2,031, respectively.

For the nine months ended September 30, 2025, and 2024, related party G&A expenses totaled $98,210 and $122,127, respectively.

For the nine months ended September 30, 2025, related party G&A expenses included consulting fees paid to Ms. Yap, Pei Ling ("Ms. Yap"), spouse of our Chief Executive Officer, Mr. Lee, Chong Kuang, of $10,380, Ms. Yap's wholly owned company, Bright Interlink Sdn. Bhd. ("BISB"), of $10,428 and FML of $13,455, and management fees paid to Greenpro Global Capital Village Sdn. Bhd. ("GGCVSB") of $63,947, a Malaysian company jointly owned by Mr. Lee and Mr. Loke.

For the nine months ended September 30, 2024, related party G&A expenses included consulting fees paid to Ms. Yap of $11,522, BISB of $10,426 and FCL of $40,293, and management fees paid to GGCVSB of $59,886.

For the nine months ended September 30, 2025, and 2024, related party other income was $31,697 and $35,565, respectively.

For the nine months ended September 30, 2025, related party other income includes other income generated from Acorn Finance Limited ("Acorn") of $8,073 and GTL of $23,624, respectively.

For the nine months ended September 30, 2024, related party other income includes other income generated from Acorn of $8,987, GTL of $26,524, and SEATech Ventures Corp. ("SEATech") of $54.

For the nine months ended September 30, 2025, and 2024, related party interest income was $4,212 and $3,707, respectively.

For the nine months ended September 30, 2025, related party interest income includes interest income generated from GTL of $849 and GTL's subsidiary, Greenpro Custodian Service Limited ("GCSL"), of $3,363, respectively.

For the nine months ended September 30, 2024, related party interest income includes interest income generated from GTL of $720 and GCSL of $2,987.

For the nine months ended September 30, 2025, and 2024, gain on disposal of related party investments was $39,800 and $324,917, respectively.

For the nine months ended September 30, 2025, gain on disposal of related party investment generated from the sale of common stock of Jocom Holdings Corp. ("Jocom") of $39,800.

For the nine months ended September 30, 2024, gain on disposal of related party investments includes the sale of common stock of Agape ATP Corporation ("Agape") of $307,597 and MU Global Holding Limited ("MUGH") of $17,320.

A reversal of impairment of related party investment represents the reversal of impairment of Jocom of $150 for the nine months ended September 30, 2025.

Net accounts receivable from related parties was $219 and $41 as of September 30, 2025, and December 31, 2024, respectively.

As of September 30, 2025, the net accounts receivable from related parties was due from Mr. Loke's wholly owned company, Falcon Certified Public Accountants Limited ("FCPA"), of $142 and GTL of $77.

As of December 31, 2024, the net accounts receivable from a related party was due from Mr. Loke of $41.

Amounts due from related parties were $996,468 and $954,184 as of September 30, 2025, and December 31, 2024, respectively. Amounts due to related parties were $118,460 and $57,497 as of September 30, 2025, and December 31, 2024, respectively.

As of September 30, 2025, amounts due from related parties mainly include amounts due from GGCVSB of $816,667, First Bullion Holdings Inc. ("FBHI") of $90,000 and GTL of $88,116, while the amounts due to related parties mainly include FCPA of $106,445.

As of December 31, 2024, amounts due from related parties mainly include amounts due from GGCVSB of $772,311, GTL of $90,207 and FBHI of $90,000, while the amounts due to related parties mainly include FCPA of $22,820 and Mr. Lee of $20,677, respectively.

Deferred costs of revenue to related parties were $6,250 and $18,750 as of September 30, 2025, and December 31, 2024, respectively.

As of September 30, 2025, deferred costs of revenue to related parties were $2,500 and $3,750 associated with FML and Jimmy, respectively.

As of December 31, 2024, deferred costs of revenue to related parties were $7,500 and $11,250 associated with FML and Jimmy, respectively.

As of September 30, 2025, and December 31, 2024, other investments in a related party were $12,073.

As of September 30, 2025, and December 31, 2024, related party investments mainly include an investment in GTL of $11,981.

Our related parties primarily represent those companies where we own a certain percentage of their shares, and it is determined that we have significant influence on those companies based on our common business relationships. Refer to Note 7 to the Condensed Consolidated Financial Statements for additional details regarding the related party transactions.

Critical Accounting Policies and Estimates

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets, including goodwill, valuation allowance on deferred income taxes, and the accrual of potential liabilities. Actual results may differ from these estimates.

Revenue recognition

The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

The Company's revenue consists of revenue from providing business consulting and corporate advisory services ("service revenue"), revenue from the provision of digital platforms and trading of digital assets ("digital revenue"), revenue from the rental of real estate properties, and the sale of real estate properties ("real estate revenue").

Impairment of long-lived assets

Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provisions of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying amount of the asset. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.

Goodwill

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized; rather, it is tested for impairment annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company's policy is to perform its annual impairment testing for its reporting units on December 31 of each fiscal year.

Derivative financial instruments

Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables, such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging, for derivative financial instruments that are accounted for as liabilities. The derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.

Recent accounting pronouncements

Refer to Note 1 in the accompanying financial statements.

Liquidity and Capital Resources

Our cash balance on September 30, 2025, was $775,388, as compared to $1,124,818 on December 31, 2024, a decrease of $349,430. We estimate we may have sufficient cash available to meet our anticipated working capital for the next twelve months upon improving its profitability and the continuing financial support from its major shareholders.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the nine months ended September 30, 2025, the Company incurred a net loss of $1,722,930 and net cash used in operations of $1,180,574, and as of September 30, 2025, the Company incurred an accumulated deficit of $38,987,309. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2024 financial statements, has expressed substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide additional cash to meet the Company's obligations as they become due.

Despite the amount of funds that the Company has raised in the past, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its shareholders, in the case of equity financing.

Operating activities

Net cash used in operating activities was $1,180,574 and $1,191,874 for the nine months ended September 30, 2025, and 2024, respectively. The net cash used in operating activities in 2025 primarily consisted of an increase in digital assets of $43,767 and a net loss of $1,722,930, offset by a decrease in net accounts receivable of $78,405, a decrease in prepaids and other current assets of $21,100 and an increase in deferred revenue of $470,873. For the nine months ended September 30, 2025, non-cash adjustments totaled $146,437, which was primarily comprised of non-cash expenses from depreciation and amortization of $179,349, offset by non-cash income from gain on disposal of investments of $39,800.

The net cash used in operating activities in 2024 primarily consisted of an increase in net accounts receivable of $25,282, a decrease in accounts payable and accrued liabilities of $148,330 and a net loss of $1,168,983, offset by a decrease in prepaids and other current assets of $190,523. For the nine months ended September 30, 2024, non-cash adjustments totaled $49,658. Noncash income, net, was comprised of non-cash income from gain on disposal of investments of $324,917, offset by non-cash expenses from provision for credit losses of $90,243 and depreciation and amortization of $185,016.

Investing activities

Net cash provided by investing activities was $38,651 and $333,265 for the nine months ended September 30, 2025, and 2024, respectively.

Cash provided by investing activities in 2025 was the proceeds from disposal of other investments of $39,950, offset by the purchase of property and equipment of $1,299.

Financing activities

Net cash provided by financing activities was $775,778 for the nine months ended September 30, 2025, while net cash used in financing activities was $183,533 for the nine months ended September 30, 2024.

Cash provided by financing activities in 2025 was the proceeds from the sale of Common Stock in private placements of $760,000 and the advance payments from related parties of $18,679, offset by the principal repayment of finance lease liabilities of $2,901.

Cybersecurity

Risk management and strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.

Oversee Third-Party Risk

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the system and organization controls (SOC) reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.

Risks from Cybersecurity Threats

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing during the period ended September 30, 2025. We will continue to monitor and assess our cybersecurity risk management program as well as invest in and seek to improve such systems and processes as appropriate. If we were to experience a material cybersecurity incident in the future, such an incident may have a material effect, including on our operations, business strategy, operating results, or financial condition.

Governance

Our board of directors is responsible for monitoring and assessing strategic risk exposure. Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the Audit Committee. Our executive management team informs our Audit Committee on cybersecurity risks on a regular basis, at least once per year.

The Audit Committee is primarily responsible for assisting our board of directors in fulfilling its ultimate oversight responsibilities relating to risk assessment and management, including relating to cybersecurity and other information technology risks. The Audit Committee oversees management's implementation of our cybersecurity risk management program, including processes and policies for determining risk tolerance, and reviews management's strategies for adequately mitigating and managing identified risks, including risks relating to cybersecurity threats.

Our cybersecurity coordinator is responsible for assessing and managing our material risks from cybersecurity threats, in close collaboration with our IT team and reports to our CEO. This ensures that senior management is kept abreast of the cybersecurity posture and potential risks faced by our group.