NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company are prepared in accordance with GAAP as codified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The accompanying consolidated financial statements include the results of operations of CMD subsequent to the acquisition date of December 16, 2024. See Note 5—Business Combinations for additional information.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests represent the portion of equity in consolidated subsidiaries not attributable to, or controllable by, the Company and are presented as a separate component of shareholders’ deficit in the consolidated balance sheets. Net income or loss attributable to noncontrolling interests is presented separately in the consolidated statements of operations.

Reverse Share Splits

On July 8, 2024, the Company effected a 1-for-13 reverse split of its outstanding common shares. On November 11, 2024, the Company effected a 1-for-15 reverse split of its outstanding common shares. All outstanding common shares and warrants were adjusted to reflect both the 1-for-13 and 1-for-15 reverse splits, with the respective exercise prices of the warrants proportionately increased. The outstanding convertible notes and preferred shares conversion prices were adjusted to reflect a proportional decrease in the number of common shares to be issued upon conversion.

All share and per share data throughout these consolidated financial statements have been retroactively adjusted to reflect the reverse share splits. As a result of the reverse common share splits, an amount equal to the decreased par value of common shares was reclassified from common shares to additional paid-in capital. The total number of authorized common shares did not change as a result of either reverse split.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include, but are not limited to, revenue recognition, allowance for estimated credit losses, reserves for excess and obsolete inventory, impairment evaluations of long-lived assets and goodwill, fair value measurements of warrant liabilities, fair value of assets acquired and liabilities assumed in business combinations, and assessments of contingent liabilities.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses on deposits in excess of FDIC limits. As of December 31, 2025 and 2024, the Company had $1,473,110 and $1,474,367, respectively, in excess of FDIC limits.

Segment Reporting

The Company reports segment information in accordance with ASC 280, “Segment Reporting.” Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is its Chief Executive Officer (“CEO”).

The Company’s operating segments are its individual operating subsidiaries, which reflects the manner in which the CODM evaluates financial performance, allocates resources, and makes operating decisions. Given the Company’s business model of acquiring, managing, and monetizing a portfolio of small and middle-market operating businesses, the CODM reviews the financial results of each subsidiary independently. The Company’s reportable segments are Kyle’s, Wolo, ICD and CMD. Corporate services represent holding company activities, including corporate overhead, intercompany eliminations, and other activities not allocated to the reportable segments.

Revenue Recognition and Cost of Revenues 

The Company records revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five-step approach: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as a performance obligation is satisfied.

Construction — Kyle’s, ICD, and CMD

Revenue in the construction operations of Kyle’s, ICD, and CMD is derived primarily from contracts with customers for finish carpentry and related services, including doors, frames, trim, hardware, millwork, cabinetry, and specialty construction accessories. The Company accounts for a contract when it has approval and commitment from both parties, the rights and payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

The transaction price is allocated to each distinct performance obligation within a contract and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s contracts consist of a single performance obligation, as the promised goods and services are highly interdependent and not separately identifiable from other promises within the contract and, therefore, are not distinct.

Revenue for each contract is generally recognized over time due to the continuous transfer of control to the customer as work is performed at the customer’s site and, therefore, the customer controls the asset as it is being installed. The Company generally measures progress toward completion using the cost-to-cost input method, as it best depicts the transfer of control of goods and services to the customer. Under this method, progress is measured based on the ratio of costs incurred to date to the total estimated costs at completion, with revenue recognized proportionally as costs are incurred. Incurred costs include all direct materials, labor, subcontractor expenses, and other indirect costs related to contract performance.

Estimating the total expected cost at completion requires significant judgment. The Company regularly reviews and updates cost estimates quarterly or more frequently if circumstances change. External factors such as weather conditions, supply chain disruptions, and customer delays may impact contract progress, potentially affecting the timing and amount of revenue recognition, cash flow, and overall contract profitability.

For certain customers, the Company applies the right-to-invoice practical expedient and recognizes revenue in the amount it is entitled to invoice when that amount corresponds directly with the value of the performance to date. An immaterial portion of sales, primarily retail sales, is accounted for on a point-in-time basis when the sale occurs. Sales taxes, when incurred, are recorded as a liability and excluded from revenue on a net basis.

Contracts can be subject to modification to account for changes in contract specifications and requirements. A contract modification exists when a change in scope or price creates new, or modifies existing, enforceable rights and obligations. Contract modifications relate to goods or services that are not distinct from the existing contract due to the significant integration of services provided, and are therefore accounted for as part of the existing contract. The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue on a cumulative catch-up basis.

The Company provides assurance-type warranties on certain installed products and services, which do not represent a separate performance obligation. Due to the nature of the Company’s projects, including contract owner inspections during construction and prior to acceptance, warranty-related costs have historically been immaterial.

Cost of revenues for the construction operations consists of direct materials, labor, subcontractor costs, and other costs directly attributable to contract performance.

Automotive Supplies

Revenue in the automotive supplies operations of Wolo is derived primarily from the sale of horn and safety warning lights for cars, trucks, industrial equipment, and emergency vehicles. The Company sells its automotive and supplies products to big-box national retail chains, through specialty and industrial distributors, as well as online and mail order retailers and original equipment manufacturers.

Revenue from the sale of automotive and supplies products is recognized at a point in time when control of the promised goods or services is transferred to the customer, generally at the time of shipment or delivery, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The consideration promised includes fixed and variable amounts. The fixed amount of consideration is the standalone selling price of the goods sold. Variable consideration, including cash discounts, rebates, warranties, and estimated returns are deducted from gross sales in determining net sales at the time revenues are recorded. The Company includes in the transaction price an amount of variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Any sales taxes collected from customers are remitted to governmental authorities and excluded from revenues.

The Company collects payments for internet and phone orders from the customer at the time the order is shipped. Customers placing orders with a purchase order through the EDI (Electronic Data Interchange) are allowed to purchase on credit and make payment after receipt of product on the agreed-upon terms.

Cost of revenues for the automotive supplies operations consists of product costs, inbound freight and import duties, inventory write-downs, and other costs incurred in bringing products to their saleable condition.

Contract Assets and Liabilities

Contract assets represent revenue recognized in excess of amounts billed to customers in the construction operations, and include retainage receivables and job-specific material purchases procured exclusively to fulfill specific customer contracts. Retainage consists of amounts withheld by the customer that are not invoiced until specific contractual milestones are met, typically upon contract completion. Job-specific materials, such as cabinetry, doors, and trim, are custom-selected for individual contracts, are not available for resale to other customers, and are installed or delivered as part of satisfying the underlying performance obligation. These costs are capitalized as contract fulfillment costs in accordance with ASC 340-40 “Other Assets and Deferred Costs—Contracts with Customers,” rather than classified as inventory, as they do not represent assets held for sale in the ordinary course of business.

Contract liabilities represent either advance payments received from customers prior to the satisfaction of performance obligations or amounts billed to customers in excess of revenue recognized.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consist of trade receivables arising from credit sales to customers in the normal course of business, including retainage receivables in the construction operations. Retainage receivables represent amounts withheld by customers pending satisfactory completion of each installation project.

Accounts receivable are recorded at the invoiced amount, net of an allowance for current expected credit losses. In accordance with ASC 326, “Financial Instruments—Credit Losses,” the Company estimates expected credit losses on accounts receivable using the aging schedule method, incorporating historical loss experience, the creditworthiness of customers, prevailing economic conditions, and reasonable and supportable forward-looking information. Accounts receivable balances are written off when they are determined to be uncollectible. As of December 31, 2025 and 2024, the allowance for current expected credit losses for accounts receivable amounted to $109,600 and $111,027, respectively.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash balances at financial institutions which, at times, may exceed FDIC limits. The Company has not experienced any significant losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company performs ongoing credit evaluations of its customers and does not require collateral. As of December 31, 2025, CMD accounted for approximately 91.4% and 83.8% of consolidated accounts receivable and revenues, respectively. The concentration of CMD’s customer base within a single geographic market and industry exposes the Company to risk if economic conditions in that market deteriorate.

For the year ended December 31, 2025, one customer accounted for approximately 17.8% of consolidated revenues. As of December 31, 2025, two customers accounted for approximately 20.1% and 14.4% of consolidated accounts receivable, respectively.

Inventories

Inventories consist of finished goods, raw materials, and inventory in transit, and are stated at the lower of cost or net realizable value. Cost is determined using the weighted-average cost method and includes freight, non-refundable taxes, duty, and other handling costs incurred in bringing inventories to their present location and condition. Work in process inventories are immaterial to the consolidated financial statements.

The Company periodically reviews its inventories and records a provision for estimated losses related to excess, damaged, slow-moving, or obsolete inventories. The provision is measured as the difference between the carrying cost of the inventories and their net realizable value based upon assumptions about product quality, future demand, selling prices, and market conditions. As of December 31, 2025 and 2024, the reserve for obsolescence amounted to $279,200 and $492,574, respectively.

Property and Equipment

Property and equipment are stated at historical cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives as follows:

Leases

The Company evaluates all contracts at inception or upon modification to determine whether the contract contains a lease in accordance with ASC 842, “Leases.” A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset exists when the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct its use. Contracts containing a lease are further evaluated for classification as operating or finance leases.

Operating Leases

At lease commencement, the Company recognizes right-of-use (“ROU”) assets and related lease liabilities on the consolidated balance sheets for leases with a term greater than twelve months. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the commencement date. If a lease contains renewal or termination options, those options are included in the lease term when the Company is reasonably certain they will be exercised. Because the Company’s leases generally do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on information available at the lease commencement date to determine the present value of lease payments. The IBR represents the rate the Company would incur to borrow on a collateralized basis over a similar term in an amount equal to the lease payments.

When calculating the present value of lease payments, the Company accounts for lease and non-lease components as a single lease component. Variable lease payments are expensed as incurred. The Company does not recognize ROU assets and lease liabilities for short-term leases with an initial lease term of 12 months or less.

Finance Leases

Leases that transfer substantially all of the risks and rewards of ownership of the underlying asset to the Company are accounted for as finance leases. At lease commencement, the Company recognizes a ROU asset and a corresponding lease liability measured at the present value of the unpaid lease payments. Lease cost for finance leases consists of amortization of the ROU asset and interest expense on the lease liability. The ROU asset is amortized on a straight-line basis and recognized within depreciation and amortization expense, while interest on the lease liability is recognized using the effective interest method and recorded as interest expense in the consolidated statements of operations. Finance lease ROU assets are amortized over the shorter of the lease term or the estimated useful life of the underlying asset, unless the Company is reasonably certain to exercise a purchase option, in which case the ROU asset is amortized over the estimated useful life of the underlying asset.

Discontinued Operations

The Company evaluates all disposal transactions to determine whether they qualify for reporting as discontinued operations in accordance with ASC 205-20, “Discontinued Operations.” A disposal is reported in discontinued operations if it represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, and meets the criteria for classification as held for sale, disposal by sale, or disposal other than by sale (for example, by abandonment or in a distribution to owners in a spin-off).

The results of operations of the discontinued components, including any gain or loss on disposal, are presented net of applicable income taxes as a separate component in the consolidated statements of operations for all prior periods presented. Assets and liabilities associated with discontinued operations are presented as separate line items on the consolidated balance sheets for prior periods.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Under the acquisition method, the purchase price is allocated to the tangible and intangible assets acquired, liabilities assumed, and any noncontrolling interest based on their estimated fair values at the acquisition date. The excess of the purchase price over the net fair values of assets acquired and liabilities assumed is recognized as goodwill. Fair values are determined using recognized valuation methodologies including the income, cost, and market approaches in accordance with ASC 820, “Fair Value Measurement,” and incorporate assumptions such as discount rates, royalty rates, and the amount and timing of future cash flows. Purchase price allocations are initially based on preliminary estimates and may be revised as additional information becomes available, up to one year from the acquisition date. Acquisition-related costs are expensed as incurred.

Intangible Assets

Acquired identifiable intangible assets are amortized over their estimated useful lives on a straight-line basis. Estimated useful lives are determined based on the period which the intangible assets are expected to contribute to future cash flows. The Company has no indefinite-lived intangible assets. Amortization is calculated using the straight-line method over the estimated useful lives as follows:

Long-Lived Assets 

The Company reviews the carrying value of long-lived assets, including property and equipment, ROU assets, and definite-lived intangible assets for impairment in accordance with ASC 360, “Property, Plant, and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events and circumstances may include significant decreases in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being used or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast of operating losses or negative cash flows, significant disposal activity, or a significant decline in revenue or adverse changes in the economic environment.

If such facts indicate a potential impairment, the Company assesses recoverability by comparing the carrying value of the asset group to the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the carrying value exceeds the undiscounted cash flows, the Company measures the impairment loss as the difference between the carrying amount and the estimated fair value of the asset group, determined using appropriate valuation methodologies, which would typically include discounted cash flows.

During the years ended December 31, 2025 and 2024, the Company recorded no impairment charges related to long-lived assets.

Goodwill

In accordance with ASC 350, “Intangibles—Goodwill and Other,” the Company tests goodwill for impairment annually on October 1, or more frequently when events or circumstances indicate an impairment may have occurred. When assessing goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative assessment considers factors including the current operating environment, industry and market conditions, and overall financial performance. If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs a quantitative assessment by comparing the estimated fair value of the reporting unit to its carrying amount.

The Company estimates the fair value of its reporting units using the present value of estimated future cash flows, which requires considerable management judgment regarding the impact of operating and macroeconomic changes. Significant assumptions include past performance, current and anticipated market conditions, forecasted growth rates, and estimated discount rates. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the difference.

During the years ended December 31, 2025 and 2024, the Company recorded goodwill impairment charges of $0 and $679,175, respectively.

Embedded Derivative Liabilities

The Company evaluates the embedded features of its financial instruments, including convertible notes payable, preferred shares, and warrants, in accordance with ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815 “Derivatives and Hedging.” Certain conversion options and redemption features are required to be bifurcated from their host instrument and accounted for as freestanding derivative financial instruments when certain criteria are met. The Company applies significant judgment to identify and evaluate complex terms and conditions for its financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statements of operations each period.

The Company maintains a sequencing policy whereby, in the event that reclassification of contracts from equity to liabilities is necessary under ASC 815 due to the Company’s inability to demonstrate sufficient authorized shares, shares are allocated on the basis of the earliest maturity date of potentially dilutive instruments, with the earliest maturity date receiving the first allocation. Issuances of securities to employees and directors, or to compensate grantees in a share-based payment arrangement, are not subject to the sequencing policy.

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants in accordance with ASC 480 and ASC 815-40, “Contracts in Entity’s Own Equity.” The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether they meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require net cash settlement in a circumstance outside of the Company’s control.

Warrants that meet all the criteria for equity classification are recorded as a component of additional paid-in capital at the time of issuance. Warrants that do not meet all the criteria for equity classification are recorded at fair value on the date of issuance, with changes in fair value recognized in the consolidated statements of operations each period.

Fair Value of Financial Instruments

The fair value of a financial instrument is the price the Company would receive to sell an asset or pay to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. In the absence of observable market data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.

In accordance with ASC 820, the Company classifies fair value measurements within the following three-level hierarchy based on the observability of inputs used:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data and reflect the Company’s own assumptions about the inputs market participants would use.

The Company holds certain assets and liabilities measured at fair value on a recurring and nonrecurring basis. See Note 13—Fair Value Measurements for additional information.

Commitments and Contingencies

The Company accounts for commitments and contingencies in accordance with ASC 450, “Contingencies.” Liabilities for loss contingencies are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of loss is determined to be probable and no amount within the range is a better estimate than another, the minimum amount of the range is recorded. If a loss is reasonably possible but not probable, the Company discloses the nature of the contingency and an estimate of the possible loss or range of loss if such estimate can be made. Contingencies include, but are not limited to, litigation, regulatory matters, contractual obligations, and other claims arising in the normal course of business.

Stock-Based Compensation

The Company measures stock-based awards granted to employees, nonemployee directors, and consultants at fair value and recognizes stock-based compensation expense in accordance with ASC 718, “Compensation—Stock Compensation.” For service-based awards, compensation expense is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of stock options is estimated using a Black-Scholes option pricing model. Restricted stock awards are valued at the closing price of the Company’s common shares on the date of grant. The Company recognizes forfeitures as they occur.

Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that all or a portion of the deferred tax assets will not be realized.

The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position will be sustained upon examination by the taxing authority, including resolution of any related appeals or litigation. The tax benefit recognized is measured as the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by adjusting the weighted-average number of common shares outstanding for the dilutive effect, if any, of common share equivalents. Common share equivalents whose effect would be antidilutive are excluded from the calculation of diluted earnings (loss) per share. For liability-classified instruments such as warrant liabilities, the two-class method is applied whereby the numerator is adjusted to remove the effect of fair value changes on such instruments when the related shares are included in the diluted share count. See Note 21—Earnings (Loss) Per Share for additional information.

Recently Adopted Accounting Pronouncements

In August 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

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,” which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. The amendment is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted. This amendment is to be applied on a prospective basis. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This guidance removes references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. Under the new standard, cost capitalization should only commence when an entity has committed to funding a software project and it is probable the project will be completed and the software will be used for its intended purpose. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its consolidated financial statements.