Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions, yet the Company does not have any insurance which covers the cash balances. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

Revenue Recognition

The Company generates its main income source from the sales of merchandise, which includes the sales of various gym equipment and fitness products. It recognizes this merchandise revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from contracts with customers,” (Topic 606). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company’s main revenue stream is from sales of products. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or when control of the goods has effectively passed to customers. The Company offers refunds, repairs and replacements in accordance with the Australian Consumer Law. The Company also provides warranties up to 12 months for home grade and light commercial customers, and up to 10 years for Commercial customers. The Company recognized the estimated sales discount and returns against its revenues in the same period as the original sales transaction.

The Company evaluates shipping and handling activities performed outbound to customers. Pursuant to the practical expedient under ASC 606, the Company has elected to account for shipping and handling activities that occur after control of the related products has transferred to the customer as fulfillment activities rather than as a separate performance obligation. Amounts billed to customers for shipping and handling are included as a component of Revenue in the consolidated statements of operations and comprehensive loss. The Company records these amounts on a gross basis, as the Company maintains primary responsibility for fulfillment, sets the shipping prices charged to customers, and directs the delivery services. Costs incurred by the Company for shipping and handling which primarily includes carrier fees, freight, and handling supplies are classified within Cost of Goods Sold as incurred.

Stock-based Compensation

The Company records stock-based compensation in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718, “Accounting for Stock Compensation,” which establishes accounting standards for the transaction in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC 718, the Company recognizes an expense for the fair value of its stock awards at the time of the grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. During the fiscal years ended June 30, 2026 and 2025, the Company has issued 64 and nil shares for services, respectively, and the value of those shares were determined at the prevailing market prices at the time of issuing.

Fair Value Option (“FVO”) Election

The Company entered into convertible notes payable, measured at fair value on September 23, 2025, October 8, 2025, November 7, 2025, March 13, 2026 and May 27, 2026 (the “Convertible Notes at Fair Value”). As permitted under ASC 825, Financial Instruments (“ASC 825”), the Company elected the FVO to account for the Convertible Notes at Fair Value. In accordance with ASC 825, the Company recorded them at fair value. The FVO may be applied instrument by instrument, but it is irrevocable. Subsequent changes in fair value would be recorded as a separate line in the consolidated statements of operations and comprehensive loss. As a result of applying the FVO, direct costs and fees related to the Convertible Notes at Fair Value were expensed as incurred. The Company concluded it was appropriate to apply the FVO to Convertible Notes at Fair Value because they are liabilities that are not, in whole or in part, classified as a component of stockholders’ equity. In addition, the Convertible Notes at Fair Value met other applicable criteria for electing the FVO under ASC 825.

Convertible notes payable, at fair value

The following table shows the change in the fair value of the Convertible Notes measured at Fair Value:

	Convertible Note payable at fair value
Balance as of June 30, 2024	$	-
Issuance of convertible notes at fair value		-
		(2,661,956	)
		(28,003,094	)
		4,818,933
Gain on extinguishment of debt recorded as a capital transaction		-
Change in fair value of related party note and convertible notes at fair value		-
Balance as of June 30, 2025	$	-

Balance as of June 30, 2025	$	-
Issuance of convertible notes at fair value		63,945,000
Change in fair value of Convertible Notes at Fair Value		(2,661,956	)
Conversion into common stock		(28,003,094	)
Exchange of Series C Convertible Notes into Series D Convertible Notes		4,818,933
Balance as of June 30, 2026	$	38,098,883

GMEX ROBOTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company accounts for its convertible debt under the fair value option. At the issuance date of the Convertible Notes at Fair Value, the Company determined that the fair value approximated the principal amount.

The measurement of fair value of the Convertible Notes at Fair Value as of June 30, 2026 was estimated based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used a Monte Carlo Simulation Model, which incorporates estimates and assumptions concerning the Company’s prospects and market indications to estimate the value of the Convertible Notes at Fair Value. The Convertible Notes at Fair Value are classified as Level 3 as there were no quotable prices for identical assets or quoted prices for similar instruments. Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the Convertible Notes at Fair Values:

	Inception Date			Inception Date			Inception Date
	September 23, 2025			October 8, 2025			November 7, 2025
	Note			Note			Note
Underlying market price on valuation date	$	4,264		$	2,969		$	665
Effective contractual conversion rates	$	4,654		$	3,036		$	913
Contractual term to maturity		2 Years			2 Years			2 Years
Market volatility:
Volatility		174.05	%		173.15	%		172.75	%
Discount rate		16.79	%		16.84	%		16.81	%
Risk-free rate		3.53	%		3.58	%		3.55	%

	Inception Date			Inception Date			Year Ended
	March 13, 2026			May 27, 2026			June 30, 2026
	Note			Note			Note
Underlying market price on valuation date	$	74.34		$	15.75		$	3.47
Effective contractual conversion rates	$	115.66		$	20.08		$	20.08 - 4,654
Contractual term to maturity		2 Years			2 Years			1.23 - 1.91 Years
Market volatility:
Volatility		104.19	%		102.95	%		82.71 - 100.68	%
Discount rate		16.99	%		17.26	%		17.28 - 17.39	%
Risk-free rate		3.73	%		4.00	%		4.02 - 4.13	%

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment in funds

The Company accounts for its investment in funds in accordance with ASC Topic 825, Financial Instruments. The investments held by the Company during the year ended June 30, 2026, are treated as a trading fund with the realized or unrealized gains and losses reflected in Other income (expense) on the consolidated statements of operations and comprehensive loss. During the year ended June 30, 2026 and 2025, the Company recorded an unrealized loss on investments in fund of $39,910 and nil, respectively. Investment in funds are stated at fair value in accordance with ASC Topic 321, Investments- Equity Securities. Any changes in the fair value of the Company’s investment in funds are included in net income (loss) under the caption of Unrealized gain (loss) from investment in funds. The market value of the investment in funds is determined using prices as reflected on an established market, using Level 1 fair value inputs. Realized and unrealized gains and losses are determined on historical cost basis. The investments in funds totals $7,930,000 and nil as of June 30, 2026 and 2025, respectively.

Advertising and Promotion

The Company follows the policy of charging the costs of advertising, marketing, and public relations to expense as incurred. The Company has $546,196 and $416,596 in sales and marketing expenses for the years ended June 30, 2026 and 2025, respectively.

Inventory

Inventory consists of only finished goods and is stated at the lower of cost and net realizable value on a ‘first in first out’ basis. Cost comprises of direct materials and delivery costs, direct labor, import duties and other taxes, and an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

Stock in transit is stated at the lower of cost and net realizable value. Cost comprises purchase and delivery costs, net of rebates and discounts received or receivable.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The Company regularly reviews the valuation of inventory and establishes an inventory reserve allowance for slow-moving, obsolete, excess, or damaged inventory, as well as inventory with net realizable values below cost.

The Company records an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management’s judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part.

During the year ended June 30, 2026, the Company recorded allowance of inventory of $1,658,866 (2025:nil), which are included in cost of goods sold on the consolidated statements of operations and comprehensive loss.

Prepaid Expenses and Deposits

Prepaid expenses consist of advance payments for goods and services and are recognized as expense over the periods benefited.

Deposits primarily represent amounts advanced in connection with potential acquisition, investment, or strategic business transactions. Such deposits are recorded at cost and are reviewed periodically to assess recoverability. Upon completion of the related transaction, the deposit is applied against the purchase consideration or otherwise accounted for in accordance with the nature of the transaction. As of June 30, 2026, deposits related to potential acquisition and investment opportunities amounted to $2,060,000 (2025: nil). If the transaction is terminated or the deposit is determined to be unrecoverable, the amount is written off in the period such determination is made. At June 30, 2026 and 2025, the Company has considered $100,000 and nil allowance for deposit, respectively.

Prepaid expenses and deposits expected to be realized within one year are classified as current assets.

Impairment of Long-Lived Assets

Potential impairments of long lived assets are reviewed when events or changes in circumstances indicate a potential impairment may exist. In accordance with ASC Subtopic 360-10, “Property, Plant and Equipment – Overall”, impairment is recognized when estimated future undiscounted cash flows associated with an asset are less than the asset’s carrying value.

Net Income (Loss) Per Common Share

The Company computes income (loss) per common share in accordance with ASC Topic 260, Earnings Per Share, which requires dual presentation of basic and diluted earnings per share. Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding, plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. For the fiscal years ended June 30, 2026 and 2025, the calculation is also reflective of the effects of the 1-for-9 share consolidation which was effective on July 2, 2026 and September 28, 2026, respectively (Note 15). As of June 30, 2026 and 2025, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of loss per share as their effect would have been anti-dilutive.

Schedule of common stock equivalents

	2026		2025
	June 30,
	2026		2025
Convertible notes payable		1,871,146		–
Total common stock equivalents		1,871,146		-

Foreign Currencies

The Company determined that its functional currency is the Australian dollar since the Australian dollar is the currency of the environment in which the Company primarily generates and expends cash; however, the Company’s reporting currency is the U.S. dollar. Foreign currency transaction gains and losses represent gains and losses resulting from transactions entered into in a currency other than the functional currency of the Company. These transaction gains and losses, if any, are included in results of operations.

Convertible notes

The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removes certain settlement conditions that were required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation for convertible instruments. Accordingly, the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note to determine whether the conversion option qualifies for the equity classification scope exception under Subtopic 815-40. The Company selected the fair value option for its convertible notes payable. The notes are carried at fair value, with changes in fair value recognized in other income (expense), net, in the consolidated statements of operations. Accordingly, no beneficial conversion feature, debt discount, or issuance cost amortization is recognized subsequent to the election of the fair value option.

GMEX ROBOTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment Reporting

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer (the “CODM”), who makes resource allocation decisions and assesses performance based on financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues, gross profit and operating loss by the one identified reportable segments. The Company’s business includes only 1one segment, which is the trading of Gym Equipment.

Going Concern

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue trading, realise its assets and discharge its liabilities in the ordinary course of business for a period of at least 12 months from the date that these consolidated financial statements are approved.

The Directors note that:

●	The Group made a loss of $7,131,972 from its continuing operations for the year ended June 30, 2026;
●	The Group held cash and cash equivalents of $14,919,028 as of June 30, 2026;
●	The Group incurred a net cash outflow from operating activities of $8,544,595 for the year ended June 30, 2026;
●	A successful fund raising from convertible notes and issued new shares during the year ended June 30, 2026 which raised $63,945,000 and $8,042,737, respectively, before cost of capital.

In assessing the appropriateness of using the going concern assumption, the Directors have noted:

●	There are reasonable grounds to believe that the Company will be able to continue as a going concern as the Directors are satisfied that the Company will be able to either secure additional working capital as required through raising additional capital or reducing the Company’s discretionary spending;
●	Accordingly, the directors consider it appropriate to prepare the consolidated financial statements on a going concern basis.

Whilst the Directors remain confident in the Company’s ability to access further working capital through debt, equity or asset sales if required, there remains material uncertainty as to whether the Company will continue as a going concern.

Had the going concern basis not been used, adjustments would need to be made relating to the recoverability and classification of certain assets, and the classification and measurement of certain liabilities to reflect the fact that the Company may be required to realize its assets and settle its liabilities other than in the ordinary course of business, and at amounts different from those stated in the consolidated financial statements.