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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management's discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to "we," "us," "our," the "Company," "HAFG," and "our company" refer to the consolidated operations of Holistic Asset Finance Group Co., Ltd., a Nevada corporation, and its subsidiary. "Common stock" refers to the Company's common stock, par value $0.001 per share. "NT$" refers to New Taiwan dollars, the legal currency of Taiwan.

Note Regarding Forward-Looking Statements

This report contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

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the success or failure of management's efforts to implement the Company's business strategies;

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the ability of the Company to generate sufficient cash flows;

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the ability of the Company to compete with other companies in the industries where the Company operates;

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the effect of changing economic conditions impacting our operations; and

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the ability of the Company to meet the other risks as described in the Company's SEC filings.

In some cases, you can identify forward-looking statements by terms such as "may," "could," "will," "should," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "project" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. "Risk Factors" of our Form 10 filed on February 27, 2025. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Overview

Our Company, through our subsidiary Wombat Australia Holdings Pty Ltd, operates two business lines:

Digital Marketing and Video Production. We offer professional social media digital marketing and video production services, focusing on the Singapore, Australia, Hong Kong and Taiwan markets and gradually expanding into other Asian markets. We deliver tailored marketing solutions to help brands accelerate their market presence in these regions and boost brand exposure through social video production.

In addition to content creation and production, the Company offers comprehensive information promotion and digital campaign optimization services. This includes the development of targeted advertising content, media planning and placement, and the management of performance-driven marketing campaigns-primarily across platforms such as Facebook (Meta).

For the three months ended September 30, 2025 and 2024, our Digital Marketing and Video Production business generated revenues of $1,235,465 and $6,895, respectively, accounting for 100% and 100% of our total revenues. For the nine months ended September 30, 2025 and 2024, our Digital Marketing and Video Production business generated revenues of $1,689,128 and $81,416, respectively, accounting for 100% and 99.3% of our total revenues.

Wellness Products Sale. We sell Australian-branded nutrition, health, and wellness products in Taiwan. We provide consumers with a convenient shopping experience mainly through offline group-buying activities. For the three months ended September 30, 2025 and 2024, our Wellness Products Sale business generated revenues of $nil and $nil, respectively, accounting for nil and nil of our total revenues. For the nine months ended September 30, 2025 and 2024, our Wellness Products Sale business generated revenues of $nil and $546, respectively, accounting for nil and 0.7% of our total revenues.

Recent Developments

In 2025, the Company expanded its digital service offerings by launching a new advertising service offering to further enhance its capabilities in paid media and performance marketing. This new offering focuses on delivering integrated advertising solutions-including campaign strategy, media buying, real-time performance tracking, and data-driven optimization-across major digital platforms such as Facebook (Meta) and Google.

Building on the Company's existing strengths in content creation and social media marketing, this development enables the Company to offer end-to-end advertising services that drive measurable brand growth, customer acquisition, and return on ad spend for clients targeting key Asian markets including Singapore, Hong Kong, and Taiwan.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

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our ability to acquire new customers or retain existing customers;

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our ability to offer competitive pricing for our products and services;

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our ability to provide competitive products and services;

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industry demand and competition; and

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market conditions and our market position.

Results of Operations

Comparison of Three Months Ended September 30, 2025 and 2024

The following table sets forth key components of our results of operations during the three months ended September 30, 2025 and 2024, together with the corresponding period-over-period changes.

		Three Months Ended September 30, 2025				Three Months Ended September 30, 2024				% Change
Revenue		$	1,235,465			$	6,895				17818.3	%
Cost of Revenue			(1,177,906	)			(187	)			629796.3	%
Gross Profit			57,559				6,708				758.1	%
General and Administrative Expenses			(68,479	)			(60,773	)			12.7	%
Operating Loss			(10,920	)			(54,065	)			(79.8	)%
Total Other Expenses, net			552				444				24.3	%
(Loss)/Profit Before Income Taxes			(10,368	)			(53,621	)			(80.7	)%
Income Tax Expenses			(3,241	)			5,545				N/A
Net Loss			(13,609	)			(48,076	)			(71.7	)%
Foreign currency translation adjustment			1,545				(5	)			N/A
Total Comprehensive loss		$	(12,064	)		$	(48,081	)			(74.9	)%

Revenue

Revenue increased significantly by $1,228,570, or approximately 17818.3%, to $1,235,465 for the three months ended September 30, 2025, from $6,895 for the same period in 2024. The substantial increase was primarily attributable to the strong performance of the Company's advertising and digital marketing service lines. The continued expansion of the newly launched integrated advertising solutions and the addition of several new clients contributed to higher campaign volumes and greater overall sales. This growth reflects the Company's successful efforts to scale operations and capture rising demand across its target markets.

Cost of Revenue

Cost of revenue increased by $1,177,719 to $1,177,906 for the three months ended September 30, 2025, from $187 in the same period of 2024. This increase reflects higher direct cost associated with the growth in revenue. The primary components of the Company's cost of revenue include media placement fees, subcontracted production costs, and labor costs. The increase in direct costs was mainly attributable to a higher volume of advertising and production projects during the period, as well as greater reliance on third-party service providers to support these projects. Overall, the increase reflects the Company's business expansion and heightened project activity.

Gross Profit

Gross profit increased to $57,559 for the three months ended September 30, 2025, compared to $6,708 for the same period in 2024. Despite the substantial growth in revenue, gross profit margin declined due to a shift in revenue mix and higher direct costs associated with the expansion of the Company's advertising services. The advertising services business generally has a lower gross margin compared to the Company's original trading business, primarily because it entails higher third-party media placement and production costs. These costs account for a greater portion of total revenue in advertising services, resulting in a lower overall gross margin.

General and Administrative Expenses

General and administrative expenses increased by $7,706, or 12.7%, to $68,479 for the three months ended September 30, 2025, from $60,773 for the same period in 2024. The increase was mainly attributable to higher general operating expenses incurred to support the Company's expanded business activities and ongoing operational growth.

Net Loss

As a result of the factors described above, the Company recorded a net loss of $13,609 for the three months ended September 30, 2025, compared to a net loss of $48,076 for the same period in 2024. The reduction in net loss reflects improved operating efficiency and the scaling of core revenue streams, partially offset by increased direct costs and administrative expenses incurred to support the Company's rapid business growth.

Comparison of Nine Months Ended September 30, 2025 and 2024

		Nine Months Ended September 30, 2025				Nine Months Ended September 30, 2024				% Change
Revenue		$	1,689,128			$	81,962				1960.9	%
Cost of Revenue			(1,550,452	)			(6,653	)			23204.6	%
Gross Profit			138,676				75,309				84.1	%
General and Administrative Expenses			(155,001	)			(120,678	)			28.4	%
Operating Loss			(16,325	)			(45,369	)			(64.0	)%
Total Other Expenses, net			(16,765	)			410				N/A
Loss Before Income Taxes			(33,090	)			(44,959	)			(26.4	)%
Income Tax Expenses			(3,241	)			-				N/A
Net (Loss)/Profit			(36,331	)			(44,959	)			(19.2	)%
Foreign currency translation adjustment			(436	)			(81	)			438.3	%
Total Comprehensive Loss		$	(36,767	)		$	(45,040	)			(18.4	)%

Revenue

Revenue increased significantly by $1,607,166, or approximately 1960.9%, to $1,689,128 for the nine months ended September 30, 2025, from $81,962 for the same period in 2024. The sharp increase was primarily driven by the continued strong growth of the Company's newly launched advertising service offering. The expansion of integrated digital advertising solutions and the addition of new clients led to higher campaign volumes and greater service revenue, demonstrating sustained market demand and effective execution of the Company's growth strategy.

Cost of Revenue

Cost of revenue increased by $1,543,799 to $1,550,452 for the nine months ended September 30, 2025, from $6,653 in 2024. This increase reflects higher direct cost associated with the growth in revenue. The main components of the Company's cost of revenue include media placement fees, subcontracted production costs, and labor costs. The increase in direct costs was primarily driven by a higher volume of advertising and production projects during the period, along with greater utilization of third-party service providers to support these projects. Overall, the increase reflects the Company's business expansion and increased project activity.

Gross Profit

Gross profit increased to $138,676 for the nine months ended September 30, 2025, compared to $75,309 for the same period in 2024. Although revenue increased significantly, gross profit margin declined as a result of a shift in revenue mix toward lower-margin advertising services and increased direct costs related to the expansion of service offerings. The Company continues to invest in building out its delivery capacity to support long-term growth, which impacts short-term margins.

General and Administrative Expenses

General and administrative expenses increased by $34,323, or 28.4%, to $155,001 for the nine months ended September 30, 2025, from $120,678 for the same period in 2024. The increase was primarily driven by lease expenses, general operating cost, and professional service fees, reflecting the operational scale-up and broader business activities during the period.

Net Loss

As a result of the above factors, the Company recorded a net loss of $36,331 for the nine months ended September 30, 2025, compared to a net loss of $44,959 for the same period in 2024. The narrowing of the net loss reflects the Company's improved operating performance and increased revenue scale, partially offset by higher direct costs and administrative expenses associated with supporting its rapid growth.

Liquidity and Capital Resources

As of September 30, 2025, the Company had cash and cash equivalents of $10,464, compared to $17,409 as of December 31, 2024. The decrease in cash was primarily due to operating expenses incurred during the period, partially offset by funds received from related parties.

Our current assets totaled $43,668 as of September 30, 2025, representing an increase from $29,161 at December 31, 2024. This increase was mainly driven by the recognition of accounts receivable of $30,546, partially offset by a decrease in cash and changes in other receivables and deposits.

Current liabilities amounted to $305,109 as of September 30, 2025, compared to $257,753 as of December 31, 2024. The increase was primarily due to an increase in accounts payable and amounts due to related parties, partially offset by reductions in other payables and tax payable.

As a result, we had a net current liability position of $261,441 as of September 30, 2025, compared to $228,592 as of December 31, 2024.

In addition, the Company had an accumulated deficit of $71,074,346 as of September 30, 2025, compared to $71,038,015 as of December 31, 2024. The Company incurred a net loss of $36,331 and had net cash used in operating activities of $18,708 for the nine months ended September 30, 2025.

These conditions raised substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern will require the Company to obtain additional financing to fund its operations. In assessing the going concern, the board of directors has considered:

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Additional equity financing from major shareholders or financial support from the Company's related parties.

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Based on the business plans of the Company, the management is actively developing new business that has generated substantial revenue and cash inflows to the Company.

The board of directors believes the Company has adequate financial resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis of accounting continues to be used in the preparation of the condensed consolidated financial statements for the three and nine months ended September 30, 2025.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended
		September 30, 2025				September 30, 2024
Net cash used in operating activities		$	(18,708	)		$	(4,641	)
Net decrease in cash			(18,708	)			(4,641	)
Effect of exchange rates on cash			11,763				531
Cash at beginning of year			17,409				10,618
Cash at end of period		$	10,464			$	6,508

Off-Balance Sheet Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder's equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Critical Accounting Policies and Estimates

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities Exchange Commission ("SEC").

Principles of Consolidation

The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the condensed consolidated financial statements and are adjusted to reflect actual experience when necessary. Actual results could differ from these estimates.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued.

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The adoption of this guidance did not have a material impact on the Company's condensed consolidated financial statements.

In November 2023, the Financial Accounting Standards Board ("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 Chief Operating Decision Maker ("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. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2023. The Company adopted ASU 2023-07 as of January 1, 2024. The adoption of this guidance did not have a material impact on the Company's condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures" which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company's condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01, "Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01"), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company's condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02, "Codification Improvements - Amendments to Remove References to the Concept Statements" ("ASU 2024-02"). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company's condensed consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Group is currently evaluating the adoption of this guidance whether or not a material impact on the Group's unaudited condensed consolidated financial statements.

In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments-Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from contracts with customers. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Group's annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Group is currently evaluating the adoption of this guidance whether or not a material impact on the Group's unaudited condensed consolidated financial statements.

The Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Group's condensed consolidated balance sheets, statements of operations and comprehensive (loss)/income and statements of cash flows.