Note 14 – Risk and Uncertainties

Credit Risk

The Company’s principal financial assets are cash and cash equivalents, investment in convertible note and accounts and other receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. The Company has not experienced losses on their accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Management believes that the Company is not exposed to any significant credit risk with respect to its cash.

The credit risk of the investment in convertible note is the potential loss from the issuer’s default with the entire $20 million concentrated in a single private company and therefore the investment in convertible note creates concentration risk. Management evaluated ASC 326 and concluded that no allowance was recorded because: (i) the note is held at amortized cost and no allowance for expected credit losses is required under ASC 326 based on the issuer’s creditworthiness and financial condition as of the origination date, with no evidence of credit deterioration in the short period since issuance; (ii) no event of default has occurred or is considered probable; and (iii) the Company has the ability and intent to hold the note to maturity, and the fixed 10% interest rate provides a reasonable return commensurate with the risk assumed. Management monitors the issuer’s credit quality on an ongoing basis and believes any potential credit losses would be immaterial to the consolidated financial statements.

The Company mitigates its credit risk on receivables by actively managing and monitoring its receivables. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. Since all accounts receivable as of March 31, 2026 and December 31, 2025 are aged within one year and collected all receivables subsequent to year end, minimum credit risk was noted for accounts receivable.

Vendor concentration risk

As of March 31, 2026 and December 31, 2025, the Company owed 91% and 87% of accounts payable to a key supplier, respectively.

For the three months ended March 31, 2026 and 2025, one vendor accounted for 11% and 26% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the three months ended March 31, 2026 and 2025, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as its financial liabilities carry interest at fixed rates.

The Company is not materially exposed to interest rate risk on the investment in convertible note because the note is measured at amortized cost, not fair value. Changes in market interest rates do not affect the carrying amount or interest income recognized, provided no impairment occurs. Additionally, the fixed 10% rate is locked in until maturity, and the Company intends to hold the note to maturity.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of twelve months, including through operations and financial support from the Company’s stockholders and financial institutions. the Company is continuing to focus on improving operational efficiency and cost reductions and enhancing efficiency, as well as servicing of financial obligations: this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Management believes that the Company’s existing cash and cash equivalents, together with cash flows from operations, are sufficient to meet its liquidity needs for the next twelve months, and the Company does not have any going concern uncertainties.