SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted.
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented have been included. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.
These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The Company’s fiscal year-end date is December 31.
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, allowance for credit losses, valuation of inventory, estimated replacement rates to calculate warranty liabilities and warranty expenses.
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| Foreign Currency translation | Foreign Currency translation
The Company’s reporting currency is the U.S. dollar (“USD”). The functional currency of AMC Robotics Corporation and its wholly owned U.S. subsidiary is USD. The functional currency of the Company’s Vietnam subsidiary, AMCV Company Limited (“AMCV”), is the Vietnamese Dong (“VND”).
Transactions denominated in currencies other than the functional currency are translated at exchange rates prevailing on the transaction dates, with resulting gains and losses recorded in other income (expense). Assets and liabilities of foreign operations are translated into USD at period-end exchange rates, while revenues and expenses are translated at average exchange rates for the period. Translation adjustments are recorded in accumulated other comprehensive income (loss).
For the three months ended March 31, 2026, the Company used the following exchange rates for its Vietnam subsidiary:
As a result of applying the above translation methodology, the Company recorded a foreign currency translation loss of approximately $487 for the three months ended March 31, 2026, which is included in accumulated other comprehensive loss in the unaudited condensed consolidated balance sheets and in other comprehensive loss in the condensed consolidated statements of operations and comprehensive income (loss). This translation adjustment primarily relates to the Company’s investment in its Vietnam subsidiary, AMCV Company Limited, whose net assets are denominated in Vietnamese Dong. The adjustment arises from translating AMCV’s net assets at period-end exchange rates while equity balances are maintained at historical exchange rates in accordance with ASC 830.
Prior to the deconsolidation of Shanghai Xiaoyun Technology Limited and Kunshan Yishijue Technology Limited on December 1, 2025, these VIE entities used the Renminbi (“RMB”) as their functional currency. Assets and liabilities were translated at period-end exchange rates, while revenues and expenses were translated at average exchange rates during the period. For the three months ended March 31, 2025, the Company recognized a foreign currency exchange loss of approximately $110, which was included in other income (expense), net. The following table presents the RMB exchange rates used for translation purposes during the three months ended March 31, 2025:
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| Cash and Cash Equivalents | Cash and Cash Equivalents
Cash consists of cash on deposit with financial institutions that is unrestricted as to withdrawal or use. Cash equivalents include highly liquid investments with original maturities of three months or less at the time of purchase.
For purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents primarily consist of investments in money market funds.
As of March 31, 2026 and December 31, 2025, the Company had cash and cash equivalent balances of $6,632,619 and $7,004,601, respectively. Cash equivalents include investments in money market funds with original maturities of three months or less.
The Company maintains its cash balances with financial institutions in the United States. These balances may, at times, exceed federally insured limits of $250,000 per depositor per financial institution provided by the Federal Deposit Insurance Corporation (“FDIC”). A portion of these balances, including amounts held in money market accounts, were not insured by the FDIC. The Company has not experienced any losses on these accounts and management believes the Company is not exposed to significant credit risk on such balances.
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| Accounts receivable and Accounts receivable - related party | Accounts receivable and Accounts receivable - related party
Accounts receivable is stated at the amount the Company expects to collect from customers through e-commerce platforms. Accounts receivable - related party primarily represents amounts due from Kami Vision Incorporated (“Kami”) under revenue-sharing and service arrangements. Refer to Note 6 - - Related Party Balances and Transactions.
The Company evaluates expected credit losses on accounts receivable, including related party balances, using a loss-rate method in accordance with ASC 326, which considers historical loss experience, current conditions, and reasonable and supportable forecasts.
As of March 31, 2026 and December 31, 2025, no allowance for expected credit losses was recorded, as substantially all receivables are due from customers and related parties with ongoing business relationships and are subject to regular settlement, and historical credit losses have been insignificant. The Company writes off receivables when collection is no longer considered probable. To date, the Company has not experienced material credit losses on accounts receivable or accounts receivable - related party.
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| Other receivable - related party | Other receivable - related party
Other receivables - related party primarily consist of amounts due from Kami Vision Incorporated (“Kami”) for marketing-related activities and from Ants Technology (HK) Limited (“Ants”) for operational and settlement-related transactions. The balances presented in the condensed consolidated balance sheets are net of any allowance for expected credit losses. Refer to Note 6 - Related Party Balances and Transactions.
The Company evaluates expected credit losses on other receivables - related party in accordance with ASC 326 using a loss-rate method, as described in “Accounts Receivable and Accounts Receivable - Related Party.”
As of March 31, 2026 and December 31, 2025, no allowance for expected credit losses was recorded, as management determined that the risk of non-collection is not significant based on historical experience and ongoing settlement activity.
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| Inventories, net | Inventories, net
Inventories consist primarily of finished goods and include product costs and freight-in costs. Product costs are determined using the moving average cost method. Freight-in costs are capitalized as part of inventory and allocated to products based on average cost per unit.
Inventories are stated at the lower of cost or net realizable value (“NRV”). The Company evaluates inventories on a periodic basis and records write-downs when the carrying value exceeds estimated NRV due to factors such as obsolescence, changes in demand, or market conditions. NRV is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Any write-downs are recorded in cost of revenues in the period identified.
A significant portion of the Company’s inventories is purchased from related parties, including ZKCam Technology Limited. Refer to Note 6 - Related Party Balances and Transactions and Note 10 - Concentration Risk for additional information. The Company has obtained extended payment terms from these suppliers, which may exceed standard commercial terms.
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| Revenue | Revenue
The Company generated revenues of $1,184,616 and $1,792,525 for the three months ended March 31, 2026 and 2025, respectively.
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Company applies the five-step model to each of its revenue streams, as described below. Revenue is reported net of value added taxes.
Revenue Recognition
Product Revenue
The Company generates product revenue from both third-party customers and related parties, including ZKCam Technology Limited., Shanghai Xiaoyun Technology Co., Ltd. and Kunshan Technology Co., Ltd.
For product sales via e-commerce platforms, primarily Amazon, as well as direct sales to customers, contracts are established through customer orders. The Company has a single performance obligation to deliver products to customers. The transaction price is the fixed sales price, net of promotional discounts offered on the platforms. As there is a single performance obligation, the transaction price is fully allocated to product delivery.
Revenue is recognized at a point in time when control of the products transfers to the customer, which is generally upon shipment. E-commerce platforms facilitate shipping and collection; however, the Company retains control of the products prior to transfer.
For product sales to related parties, including Kami and ZKCam, the terms are generally consistent with those of third-party transactions. The Company recognized the revenue from product sales - related party at a point in time when control of the products is transferred to the related party customer, which is generally upon shipment or delivery, depending on the contractual terms.
Payments are typically received within 3 to 14 days after shipment for e-commerce sales or based on agreed terms for related party transactions. As payments are not generally received in advance, no deferred revenue is recorded.
Revenue Share – Related Party (Kami)
The revenue sharing arrangements with its related party, Kami, related to cloud-based services & AI service sharing and intelligent information services.
Cloud-based services & AI service sharing
The Company enters into a revenue sharing agreement with Kami, under which the Company refers customers to Kami’s cloud-based services, including video storage, image analysis and alert-based features. The Company’s performance obligation is to provide referral services, and it does not control the underlying services provided by Kami.
Revenue is recognized when an end user referred by the Company subscribes to Kami’s cloud services and makes a payment. Kami provides the Company with a monthly statement summarizing the revenue share generated from customers referred by the Company. The Company recognizes revenue in the period in which the underlying subscription revenue is earned by Kami and reported to the Company.
Under the original agreement, the Company was entitled to 30% of subscription revenues for new customers during the first year of subscription, 15% during the second year, and no revenue share thereafter. Effective July 1, 2025, the Company entered into an amended agreement with Kami, under which the Company is entitled to 30% of subscription revenues for new customers referred by the Company during the first three years of their recurring subscriptions. In accordance with ASC 606-10-25-12, this modification is not accounted for as a separate contract, as it does not increase the scope of the contract nor does the pricing reflect standalone selling prices for additional goods or services. Accordingly, the modification is accounted for prospectively and did not result in any adjustment to revenue previously recognized.
The transaction price for the revenue share is based on fixed contractual percentages of subscription revenues earned by Kami from referred customers and does not include variable consideration or non-cash consideration. The Company has concluded that it acts as an agent in this arrangement and therefore recognizes revenue on a net basis representing its share of the consideration received.
In January 2026, based on the existing cloud services, a new AI service module has been developed, which utilizes AI technology to achieve capabilities such as face recognition, motion capture, and fall detection provided to end users. Revenue generated from these services is included within “Revenue Sharing - related party” in the accompanying condensed consolidated statements of operations.
The sharing ratio of revenue AI service and is consistent , at 30%
Intelligent information services
Beginning in the fourth quarter of 2025, the Company generated revenue from arrangements with related parties associated with intelligent information services. These arrangements are linked to products previously sold by the Company, where the Company enables access to downstream data-related monetization channels developed and operated by its business partners.
The Company does not control the underlying services provided to end users and does not have an ongoing obligation to perform services after the initial enablement. Accordingly, the Company’s role is limited to facilitating access to these arrangements, and it participates in a share of revenues generated by its business partners.
Revenue is recognized when the underlying services are delivered by the business partners to end users and the related consideration is earned and becomes determinable. The Company recognizes revenue on a net basis, representing its share of the amounts received, consistent with its conclusion that it acts as an agent in these arrangements. Revenue generated from these services is included within “Revenue Sharing - related party” in the accompanying condensed consolidated statements of operations.
Product Return Policy
The Company has a product return policy that permits e-commerce platform customers in North America to return products within 30 days from the date of purchase. For items purchased during the holiday season from October to December, the return period is extended until the end of January in the following year. For customers in Europe, the return period for e-commerce platforms is 30 days from the date of purchase. Within these specified periods, the Company offers a full refund for returned products, provided the return criteria are met.
The Company recognizes revenues adjusted for returns based upon the e-commerce platform statements, which reflect the actual refunds for returns. The Company reviews the subsequent statements after the reporting date and adjusts revenue for returns related to sales in the reporting period accordingly. For returns occurring during the reporting period, adjustments are made in the month of the return. During the three months ended March 31, 2026 and 2025, the Company’s revenue was not significantly impacted by returns due to the short-term free return policy.
For revenue sharing derived from related party arrangements with Kami, including revenue sharing from cloud-based service and intelligent information service, there are no product return rights or refund obligations applicable to the Company. These revenues are based on subscription or service usage by end users of Kami’s platform and are recognized based on amounts reported by Kami. As such, no returns or refund estimates are recorded for these revenue streams.
Product Warranty
The Company provides standard product warranties to customers who purchase products through e-commerce platforms. For customers in North America, the Company offers a one-year warranty from the date of purchase covering replacement of malfunctioning products. For customers in Europe, the warranty period extends to two years from the date of purchase.
These warranties are assurance-type warranties as defined under ASC 606 and do not provide services beyond assuring that the product complies with agreed-upon specifications and continues to function as intended. Accordingly, the warranties are not accounted for as separate performance obligations.
The Company estimates the expected costs of fulfilling warranty obligations and records a warranty liability at the time of sale, with a corresponding expense recognized in the unaudited condensed consolidated statements of operations. The estimation of warranty costs is based on historical experience, including product failure rates and replacement costs, as well as current trends and expectations.
Gross versus Net Revenue Presentation
The Company evaluates whether it acts as a principal or agent in accordance with ASC 606.
For product sales via e-commerce platforms, the Company acts as a principal and recognizes revenue on a gross basis, as it controls the products prior to transfer to customers, bears inventory risk, sets pricing, and is responsible for fulfillment.
For revenue sharing arrangements with Kami, including both cloud-based service and intelligent information service, the Company acts as an agent, as it does not control the underlying services provided to end users and has no ongoing performance obligation after the initial enablement. Accordingly, revenue is recognized on a net basis, representing the Company’s share of the consideration generated from end users.
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| Cost of revenues | Cost of revenues
Cost of revenues includes cost of products, e-commerce platform fees, delivery and freight costs, and inventory impairment loss. The Company expenses cost of revenues in conjunction with sales as incurred. The Company incurred cost of revenues of $163,960 and $1,304,195 for the three months ended March 31, 2026 and 2025, respectively.
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| General and administrative expenses | General and administrative expenses
General and administrative expenses primarily consist of costs for consulting fee, payroll expenses, storage fees, and professional fees. The Company has expensed all general and administrative expenses costs as incurred. For the three months ended March 31, 2026 and 2025, the Company incurred general and administrative expenses of $854,786 and $817,412, respectively.
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| Sales and marketing expenses | Sales and marketing expenses
Sales and marketing expenses primarily consist of costs for the promotion of business brand and product marketing and warranty expenses. The Company expensed all sales and marketing costs as incurred. For the three months ended March 31, 2026 and 2025, the Company incurred sales and marketing expenses of $14,332 and $404,112, respectively.
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| Provision for credit losses | Provision for credit losses
The Company estimates expected credit losses on accounts receivable, other receivables, and related party receivables using a loss-rate method in accordance with ASC 326. This approach incorporates historical loss experience, current conditions, and reasonable and supportable forecasts.
For the three months ended March 31, 2026 and 2025, the Company did not record a provision for expected credit losses.
As of March 31, 2026 and December 31, 2025, there was no allowance for credit losses. Based on the Company’s historical experience, the nature of its counterparties, and ongoing collection activity, management concluded that expected credit losses are insignificant.
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| Comprehensive loss | Comprehensive loss
The Company applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss is defined to include all changes in equity of the Company during a period arising from transactions and other events and circumstances except those resulting from investments by shareholders and distributions to shareholders. For the periods presented, the Company’s comprehensive income (loss) includes net income (loss) and other comprehensive income (loss), which primarily consists of the foreign currency translation adjustments.
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| Income taxes | Income taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. The provision for income taxes is determined using the asset and liability approach, under which deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates expected to apply in the periods in which those differences are expected to reverse.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, management considers all available positive and negative evidence, including historical operating results, projections of future taxable income, and the expected timing of reversal of existing temporary differences. Based on this assessment, the Company has recorded a full valuation allowance against its deferred tax assets as of March 31, 2026 and December 31, 2025.
The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained upon examination. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. As of March 31, 2026 and December 31, 2025, the Company had no material uncertain tax positions. The Company’s tax returns remain subject to examination by taxing authorities for all years since inception.
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| Private Investment in Public Equity (“PIPE”) Financing and PIPE Warrants | Private Investment in Public Equity (“PIPE”) Financing and PIPE Warrants
In connection with the closing of the Business Combination on December 9, 2025 (the “Closing Date”), the Company entered into securities purchase agreements (the “PIPE Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the Company issued an aggregate of shares of common stock at a purchase price of $ per share, for gross proceeds of $8,000,000 (the “PIPE Financing”). The PIPE Financing was consummated concurrently with the Closing and was accounted for as an equity issuance in accordance with ASC 505, with proceeds recorded within common stock and additional paid-in capital (“APIC”).
In connection with the PIPE Financing, the Company issued warrants to purchase shares of its common stock (the “PIPE Warrants”). At the Closing Date, the PIPE Warrants represented the right to acquire an aggregate of 2,240,000 shares of common stock, with an exercise price of approximately $10.00 per share, subject to adjustment. The PIPE Warrants include provisions under which the exercise price and the number of shares issuable upon exercise are subject to adjustment based on a reference stock price, as defined in the warrant agreements, determined on the reset date of December 30, 2025. As a result of these provisions, the exercise price was adjusted and the total number of shares underlying the PIPE Warrants increased to 5,576,301 shares upon the reset event. The PIPE Warrants contain dividend participation rights that entitle holders to participate in dividends and other distributions declared on common stock on an as-exercised basis, subject to the beneficial ownership limitation. Accordingly, the PIPE Warrants are considered participating securities for purposes of computing earnings per share in accordance with ASC 260, Earnings Per Share.
The Company evaluated the PIPE Warrants for classification as either equity or liability instruments in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company determined that the PIPE Warrants failed the indexation guidance under ASC 815-40 due to provisions that introduce variability in the number of shares deliverable upon settlement and are not inputs solely based on the Company’s own stock. Accordingly, the PIPE Warrants were initially recorded at fair value upon issuance as a derivative liability.
Upon the occurrence of the reset event on December 30, 2025, the terms of the PIPE Warrants became fixed, including a fixed exercise price and a determinable number of shares issuable upon exercise. Accordingly, the PIPE Warrants met the criteria for equity classification under applicable accounting guidance and were reclassified from derivative liabilities to equity in the amount of $30,558,129. The reclassification was recorded at the fair value of the PIPE Warrants as of the reclassification date.
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| Earnings Per Share |
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by reflecting the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, unless the effect would be anti-dilutive.
The Company applies the two-class method in computing earnings per share, as its PIPE Warrants are considered participating securities. Under the two-class method, net income is allocated between common stockholders and participating securities based on their respective rights to participate in earnings. For the three months ended March 31, 2026, the Company reported net income of $145,601. Of this amount, approximately $116,785 was allocated to common stockholders and approximately $28,816 was allocated to participating securities. The weighted-average number of common shares outstanding was for the period.
Diluted earnings per share is equal to basic earnings per share for the period presented, as the Company’s participating securities are included in the allocation of earnings under the two-class method and there are no additional dilutive instruments.
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| Fair value measurements | Fair value measurements
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the input used in measuring fair value as follows:
The carrying values of cash, accounts receivable, advance to suppliers, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate fair value due to the short-term nature of these instruments. Pursuant to ASC 820 and ASC 825, the fair value of cash is determined based on Level 1 inputs. The Company does not have any “Level 2” or “Level 3” fair value assets or liabilities.
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| Segment reporting | Segment reporting
The Company applies ASC 280, Segment Reporting, which requires operating segments to be identified based on the internal reporting reviewed by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s chief executive officer serves as the CODM.
The Company operates its business through e-commerce platforms and manages its operations on a geographic basis. As of March 31, 2026, the Company has determined that it has two operating and reportable segments: (1) North America and (2) Europe.
Revenue is attributed to geographic regions based on the location of the end customer. Revenue generated from regions outside North America and Europe is not material.
The Company has also established a wholly owned subsidiary in Vietnam to support manufacturing and operational activities. As of March 31, 2026, this subsidiary has not generated revenue. The costs and operating expenses associated with the Vietnam entity are included within the Company’s consolidated operating results and are not evaluated separately by the Company’s chief operating decision maker (“CODM”). Accordingly, the Vietnam operations do not constitute a separate operating or reportable segment under ASC 280.
Prior to December 1, 2025, the Company’s operations included activities conducted through variable interest entities (“VIEs”) in China, which were presented as a separate segment. Following the termination of the VIE arrangements in December 2025, the Company no longer has operations in China, and accordingly, no China segment is presented for the three months ended March 31, 2026.
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| Revision of Previously Issued Consolidated Financial Statements | Revision of Previously Issued Consolidated Financial Statements
During the preparation of the Company’s unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, management identified certain immaterial errors primarily related to the accrual of certain general and administrative expenses in the Company’s previously issued consolidated financial statements for the year ended December 31, 2025.
The errors primarily related to professional service fees for services substantially performed prior to December 31, 2025 that were not accrued as of year-end. Management evaluated the errors in accordance with ASC 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.
Management concluded that the errors were not material, individually or in the aggregate, to the Company’s previously issued annual financial statements for the year ended December 31, 2025. Accordingly, amendment or reissuance of the previously issued annual financial statements was not required. However, management further concluded that correction of the errors entirely within the current reporting period would materially misstate the Company’s results of operations for the quarter ended March 31, 2026 and fiscal year 2026. Therefore, the Company revised the comparative prior-period balances included herein to correct such immaterial prior-period errors.
The impact of the revision to record the omitted professional fee accruals on the Company’s previously reported consolidated balance sheet as of December 31, 2025 was as follows:
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| Recently issued accounting pronouncements | Recently issued accounting pronouncements
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU 2023-06 modifies the disclosure or presentation requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
On November 4, 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities (PBEs). ASU 2024-03 adds ASC 220-40 to require a footnote disclosure about specific expenses by requiring PBEs to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (DD&A) recognized as part of oil- and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. The ASU does not change or remove existing expense disclosure requirements; however, it may affect where that information appears in the footnotes to the financial statements. ASU 2024-03 shall be effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends the guidance in ASC 326. The amendments simplify the measurement of expected credit losses for accounts receivable and contract assets by permitting entities to use a practical expedient based on historical loss rates, adjusted for current conditions and reasonable and supportable forecasts.
The amendments in this update are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2025-05 effective January 1, 2026. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and does not expect the adoption of this guidance to have a material impact.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. We do not discuss recent standards that are not anticipated to have an impact on or are unrelated to our consolidated financial condition, results of operations, cash flows or disclosures.
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| Emerging Growth Company | Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012, and it continues to qualify as such as of March 31, 2026. As an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, exemption from the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements to hold a nonbinding advisory vote on executive compensation and to obtain stockholder approval of any golden parachute payments not previously approved.
In addition, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with such standards. The Company has elected not to opt out of this extended transition period. As a result, when a standard is issued or revised with different application dates for public and private companies, the Company may adopt the new or revised standard at the time private companies adopt such standard. Accordingly, the Company’s financial statements may not be comparable to those of public companies that comply with new or revised accounting standards on earlier effective dates. |
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