Financial Analysis

10. CONVERTIBLE NOTE On August 16, 2024, December 2, 2024 and February 14, 2025, the Company executed convertible promissory note purchase agreements (the Purchase Agreements) with a third-party investor under which VenHub would issue a series of notes (individually the Note and collectively, the Notes) as part of a private, unregistered offering. The Purchase Agreements provided for the following terms for Notes to be issued: Maturity date ending five years from execution of each Note (the Maturity Date) Interest is payable semiannually on February 15 and August 15, beginning February 15, 2025 (the Interest Payment Date) Interest accrues based on a 360-day year Interest is payable (i) in kind (PIK Interest) which is added to the principal amount of each Note and (ii) in cash (Cash Interest) on each Interest Payment Date Interest rates for the first year ending August 15, 2025, are 9% for PIK interest and 3% for Cash Interest Interest rates increase each of the following two years beginning August 16 to a maximum of 12% PIK Interest and 6% Cash Interest Unpaid interest and principal are due in cash at the Maturity Date On August 19, 2024, the Company executed two Notes with one investor each for a combined $1,000,000 in note principal. On December 3, 2024, the Company executed one Note with one investor for $200,000 in note principal. On December 4, 2024, the Company executed three Notes with three investors for a combined $1,483,000 in note principal. On December 6, 2024, th …

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The Company disaggregates revenue based on the nature of the goods or services, geographical region, and timing of revenue recognition, as presented below: Three Months Ended September 30, 2025 Revenue Category Timing of Recognition Revenue Store Sales Point in Time $ 250,000 Product Sales Point in Time $ 45,357 SaaS Revenue Over Time $ - Maintenance Revenue Over Time $ - Total $ 295,357 Nine Months Ended September 30, 2025 Revenue Category Timing of Recognition Revenue Store Sales Point in Time $ 750,000 Product Sales Point in Time $ 58,972 SaaS Revenue Over Time $ - Maintenance Revenue Over Time $ - Total $ 808,972

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8. SHARE BASED COMPENSATION The Company has issued stock to certain third-party contractors and directors of the Company in exchange for services provided. All stock issued to third parties vested immediately upon issuance. The Company issued a total of 3,770,250 and 5,505,697 shares of common stock, recognizing share-based compensation expense for these awards totaling $17,188,570 and $25,105,979 for the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, the Company issued 373,654 and 1,914,914 shares of common stock recognizing share-based compensation expense for these awards totaling $822,037 and $4,212,809 for the three and nine months ended September 30, 2024.

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7. LEASES Operating Leases For leases with a term of 12 months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities, and we recognize lease expense for such leases on a straight-line basis over the lease term. On August 7, 2023, the Company signed a lease for new office space in Pasadena, which has a fixed 3% increase annually expiring in April 2027. On April 10, 2025, the Company signed a lease for new office space in Las Vegas, which is a triple net lease expiring in April 2027 with two option renewal periods totaling up to four additional years that the Company is likely subsequently to exercise. The Company analyzed these leases and determined that these agreement meet the definition of a lease under ASU 842, Leases, as it provides management with the exclusive right to direct the use of and obtain substantially all of the economic benefits from the identified leased asset, which is the office space and showroom. Management also analyzed the terms of these arrangements and concluded they should be classified as an operating lease, as none of the criteria were met for finance lease classification. As there was only one identified asset, no allocation of the lease payments was deemed necessary. Management did not incur any initial direct costs associated with this lease. Per review of the lease agreements, there was no variable terms identified and there is no implicit rate s …

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Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 requires annual and interim disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), the disclosure and description of other segment items, the inclusion of all current annual disclosures about a reportable segment in interim periods, allows for disclosure of multiple measures of a reportable segments profit or loss, requires disclosure of the CODMs title and position, and requires a description of how the CODM uses reported measures in assessing the performance of reportable segments and in making decisions pertaining to allocation of resources. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has adopted this standard. See Note 13 for further information. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires the annual disclosure of specific categories in the rate reconciliation and additional information for the reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income o …

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5. RELATED PARTY TRANSACTIONS The Companys Chief Executive Officer and the Companys President, are married. The marital relationship between these two executive officers represents a related-party relationship under ASC 850-10-50-1. While both individuals serve in executive leadership positions, all compensation with each officer has been approved by the Companys Board of Directors, excluding the related parties, to ensure such arrangements are on terms deemed reasonable and consistent with arms-length practices. No additional related-party transactions between the Chief Executive Officer, the President, and the Company were identified beyond their normal compensation arrangements disclosed elsewhere in these consolidated financial statements. On July 10, 2025 the Chief Executive Officer loaned the Company $200,000. On July 21, 2025 the loan was repaid. As of September 30, 2025, the Chief Executive Officer had $703,333, the President $897,633 and the Chief Financial Officer $95,000, respectively, in accrued compensation that they have voluntarily deferred until future periods. Payments of $200,000 $60,000 and $44,000 were made to the Chief Executive Officer, President and Chief Financial Officer respectively for the three months ended September 30, 2025. For the nine months ended September 30, 2025 payments of $200,000, $255,000 and $80,000 were made to the Chief Executive Officer, President and Chief Financial Officer respectively. At December 31, 2024, the Chief Executive O …

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12. SEGMENT REPORTING The Company is managed at the consolidated level and therefore operates and reports as a single segment. The Companys Chief Executive Officer is its Chief Operating Decision Maker (CODM). The Companys CODM assesses significant segment expenses in comparison to forecasts and historical results to make decisions on capital allocation strategies. The measure of segment assets is reported on the balance sheets as total assets. All material long-lived assets are located in the United States. The following table illustrates significant segment expenses that are regularly provided to the CODM for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 General and administrative expenses 18,832,805 1,466,728 29,245,469 6,036,913 Payroll and compensation 317,500 317,500 952,500 952,500 Research and development 93,438 286,121 525,809 615,894 Total operating expenses 19,243,743 2,070,349 30,723,778 7,605,307 …

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Companys condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Companys annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Companys financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Companys audited financial statements and the notes thereto for the period ended December 31, 2024, included in the Companys 2024 Annual Report filed within the Form C. Going Concern As of September 30, 2025, the Company has sold three stores and assembled one Company owned store which was operational on June 6, 2025 Since its inception, the Company has experienced recurring losses and, as of September 30, 2025, reported a working capital deficit of $1,408,859 and negative cash flows from o …

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15. SUBSEQUENT EVENTS On October 3, 2025, the Company redomiciled from Delaware to Nevada. On October 13, 2025, the Company signed a lease agreement with Los Angeles County Metro Transportation Authority for a new Company owned store at Union Station. The Company is currently evaluating this lease under ASC 842. On October 17, 2025 the Company engaged an Employment of Record EOR. The EOR will be engaged in the business of providing employer of record services, including but not limited to human resources administration, payroll processing, tax withholding and remittance, employee benefits administration, and workers compensation coverage. On November 14, 2025, the Company converted all 100,000 outstanding Class A Preferred Stock at a rate of 379.35029 to 37,935,029 common shares issued to an entity controlled by our Chief Executive Officer. On the same date the Company also converted 671,072 Class B Preferred shares to common stock on a one to one basis issued to our crowdfunding investors. …

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