v3.26.3
Going Concern
 6 Months Ended
Jun. 30, 2026
Going Concern [Abstract]  
GOING CONCERN

3. GOING CONCERN

 

As of June 30, 2026, the Company had cash of approximately $11,649 and has incurred recurring losses from operations since inception. The Company reported a net loss of approximately $0.9 million for the six months ended June 30, 2026 and had an accumulated deficit of approximately $40.0 million as of June 30, 2026. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these unaudited condensed consolidated interim financial statements are issued.

 

The Company faces several significant uncertainties that impact its liquidity position and ability to continue operations, including:

 

  ● Operating losses and liquidity constraints – The Company has not generated sufficient revenues to support its operations and has limited cash resources available to meet its obligations as they become due.

 

  ● Prepaid Forward Contract – The Company has recorded a prepaid balance related to a forward purchase agreement as a current asset. The realization of this balance is dependent upon the successful execution of the forward purchase arrangement and remains subject to significant uncertainty, including market conditions, counterparty performance, and the Company’s listing status. The arrangement is not expected to generate near-term cash inflows and may not be readily convertible to cash. Accordingly, this balance does not provide immediate liquidity to support the Company’s operations. The Company continues to classify the prepaid balance as a current asset based on management’s expectation that the balance will be realized within twelve months from June 30, 2026; however, the timing of realization remains subject to the uncertainties described above.

 

  ● Nasdaq delisting – Trading of the Company’s common stock on the Nasdaq Stock Market was suspended on April 21, 2025, and the Company’s securities were subsequently delisted on July 31, 2025. The Company’s securities are currently quoted in the over-the-counter market. The delisting significantly limits the Company’s ability to access public capital markets and creates uncertainty regarding its ability to obtain future financing.

 

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Dependence on principal shareholder support – The Company has historically relied on financial support from its principal shareholder and related parties to fund operations. During the six months ended June 30, 2026, the Company received additional related-party financing of approximately $0.5 million through promissory notes from the principal shareholder. Although management obtained a written financial support letter from the principal shareholder indicating a present intention to continue providing financial support to the Company for at least twelve months following the issuance date of these unaudited condensed consolidated interim financial statements, such support remains subject to the shareholder’s financial ability to provide funding. In addition, ongoing legal proceedings involving the principal shareholder create uncertainty regarding the availability of future financial support. Security and stock pledge arrangements – On May 29, 2026, the Company and its subsidiary entered into a Security Agreement and Stock Pledge Agreement with related-party lenders Mr. Wellen Sham and Ms. Ling Houng Sham. Under these agreements, the Company granted a first-priority security interest over substantially all of its assets, including the prepayment of approximately $13.1 million under the Forward Purchase Agreement, and its subsidiary pledged 100% of the issued share capital of TP NEV. The arrangements secure the Company’s outstanding related-party obligations. In the event of an uncured default, the secured parties may exercise remedies against the collateral. Accordingly, these arrangements expose the Company to additional liquidity risk in the event of default. The security and pledge arrangements are supported by the related-party analysis, which documents that the security package covers substantially all property of the Company and that 100% of TP NEV was pledged as collateral for the related-party obligations.

 

Management has undertaken certain actions intended to improve liquidity and support ongoing operations, including seeking additional financing through equity or debt arrangements, obtaining continued support from related parties, implementing cost reduction initiatives, and pursuing strategic transactions and business opportunities. On May 29, 2026, the Company and Mr. Wellen Sham executed allonges extending the maturity dates of certain promissory notes payable to Mr. Sham. As of June 30, 2026, six of these notes, with aggregate principal amounts of $574,773, had amended maturity dates ranging from July 25, 2027 through April 28, 2028 and were classified as amounts due to related parties, non-current. The borrowing bears an interest rate of 8%. On April 9, 2026, the Company completed a portion of the amended Share Exchange Agreement with EPT, resulting in the Company acquiring approximately 31.68% of EPT. The investment is accounted for under the equity method. The Company continues to pursue the remaining share exchange arrangements involving EPT and is evaluating potential changes to EPT’s governance arrangements that may result in the Company obtaining control over EPT in a future reporting period.

 

As of June 30, 2026, the Company had not obtained control over EPT. The Company is entitled to nominate two of EPT’s seven directors. Through its board representation and 31.68% shareholding, it has the ability to exercise significant influence over EPT. Completion of the remaining share exchange arrangements and any future acquisition of control remain subject to applicable contractual, corporate and other requirements and uncertainties. There can be no assurance that the remaining share exchange arrangements will be completed, that the Company will obtain control over EPT, or that these initiatives will improve the Company’s liquidity position.

 

Boral Capital LLC commenced an action against the Company in the Supreme Court of the State of New York seeking the Company’s payable of $1,310,625 under a Satisfaction and Discharge Agreement, by way of a motion for summary judgment in lieu of complaint. The Company did not file an opposition, and the motion has been submitted to the court for decision. The amount of $1,310,625 was recorded in the account of “underwriter fee payable” upon the consummation of IPO. No additional amount has been accrued for interest or additional penalties relating to the action, which cannot presently be estimated.

 

 

Management evaluated these conditions and events, together with its plans, in accordance with ASC 205-40, Presentation of Financial Statements — Going Concern. While management believes its plans may provide additional liquidity and support operations, management concluded that such plans do not alleviate the substantial doubt regarding the Company’s ability to continue as a going concern within one year after the issuance date of these unaudited condensed consolidated interim financial statements. The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing, maintain financial support from its principal shareholder and related parties, successfully execute its strategic initiatives involving EPT and other business opportunities, and ultimately generate sufficient cash flows from operations. There can be no assurance that additional financing or continued related-party funding will be available when required or on acceptable terms, that the remaining EPT arrangements will be completed or result in the Company obtaining control over EPT, or that the Company’s strategic initiatives will generate sufficient liquidity.

 

Accordingly, the Company may not be able to realize its assets and discharge its liabilities in the ordinary course of business and may not be able to continue as a going concern within one year after the issuance date of these unaudited condensed consolidated interim financial statements.

 

The accompanying unaudited condensed consolidated interim financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may result from the outcome of these uncertainties.