UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from ___________________________ to ___________________________

Commission file number 333-284322

Agroz Inc.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

No. 2, Lorong Teknologi 3/4A, Taman Sains Selangor, Kota Damansara,

47810 Petaling Jaya, Selangor, Malaysia

+60 18-218 2300

(Address of Principal Executive Offices)

Mr. Gerard Kim Meng Lim, Chief Executive Officer

No. 2, Lorong Teknologi 3/4A, Taman Sains Selangor, Kota Damansara,

47810 Petaling Jaya, Selangor, Malaysia

Tel: +60 18-218 2300

Email: ir@agroz.co

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Ordinary Shares

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The number of Agroz Inc.’s outstanding shares as of December 31, 2025 was 21,853,485 Ordinary Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

TABLE OF CONTENTS 

INTRODUCTION

In this annual report, except where the context otherwise requires and for purposes of this annual report only:

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F (including information incorporated by reference herein, the “Report”) is being filed by Agroz Inc., a Cayman Islands company. Unless otherwise indicated, “we,” “us,” “our,” the “Company,” “Agroz” and similar terminology refer to Agroz Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands.

This Report contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance.

Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify the forward-looking statements. The risk factors and cautionary language referred to or incorporated by reference in this Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements contained in this Report, or the documents to which we refer readers in this Report, to reflect any change in our expectations with respect to such statements or any change in events, conditions or circumstances upon which any statement is based.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

Not applicable.

Not applicable.

Risks Related to our Business and Industry  

We have a limited operating history.

We have a limited operating history from which to evaluate our business and it will continue to be difficult to make accurate predictions and forecasts on our growth and future prospects. There is no guarantee that our products or services will remain attractive to potential and current clients as our business continues to develop.

We operate in an industry that is still relatively new and subject to many uncertainties.

The vertical farming industry is still very new and subject to much uncertainty. New market participants may also emerge in this sector which we cannot anticipate. There is no guarantee that this sector will grow, or grow at a level that will benefit our business, or even if it grows, we cannot assure that our business will operate profitably in spite of favorable market conditions in this industry.

We may incur significant operating costs in the near future and cannot assure that we can recoup these potential costs to continue operating profitably or as a going concern.

High startup costs are one of the most significant concerns for market entrants in the CEA vertical farming industry. CEA vertical farming requires a significant initial investment of funds, including to pay for infrastructure like building facilities and climate control systems. Additionally, there are high electricity costs required to maintain the LED lighting system within vertical farms as well as labor costs. We cannot guarantee a return on our investment into the vertical farms we have developed thus far or that we will build and develop in the future. If we fail to do so, our financial performance may be adversely affected and there is a risk we cannot continue as a going concern.

We cannot assure that we can maintain a steady labor supply of personnel with sophisticated knowledge necessary to operate CEA vertical farms. If we fail to do so, our financial performance may be negatively impacted.

CEA vertical farms require a high level of technical expertise to establish, monitor, and sustain effectively. Our CEA technology minimizes the need for manual labor for crop production but requires sophisticated levels of knowledge to configure, supervise, and maintain them successfully. Furthermore, operating a profitable vertical farming operation necessitates not only advanced expertise in horticulture and engineering but also the presence of leadership abilities, prior management experience, financial literacy, effective communication skills, and keen powers of observation. We cannot assure that we can retain personnel with such technical expertise. If we fail to do so, our financial performance may be negatively impacted.

Failure to adequately manage our planned growth strategy may harm our business or increase our risk of failure.

For the foreseeable future, we intend to pursue a growth strategy for the expansion of our operations by further developing and improving our products and services. Our ability to rapidly expand our operations will depend upon many factors, including our ability to work in a regulated environment, establish and maintain strategic relationships with suppliers, and obtain adequate and necessary capital resources on acceptable terms. Any restrictions on our ability to expand may have a materially adverse effect on our business, results of operations, and financial condition. Accordingly, we may be unable to achieve our targets for sales growth, and our operations may not be successful or achieve anticipated operating results.

We may become subject to additional regulation of agricultural products.

Our business is subject to certain Malaysian laws and regulations, including the Food Act 1983 and the Federal Agricultural Marketing Authority Act 1965 (“FAMAA”), which govern the safety, hygiene, grading, packaging and labeling of agricultural products. Save and except for these laws and their corresponding regulations, in particular the Food Regulations 1985 and the Federal Agricultural Marketing Authority (Grading, Packaging and Labelling of Agricultural Produce) Regulations 2008, we do not believe that our products are subject to any further regulation in Malaysia or any state agency. However, changes in the industry, including growth, make it possible that additional regulations may be put into place and that such regulations could impact sales or otherwise negatively impact our revenues and business opportunities.

We could be adversely affected by a change in consumer preferences, perception and spending habits in the food industry, and failure to develop and expand our product offerings or gain market acceptance of our products may negatively impact our business.

The market in which we operate is subject to changes in consumer preference, perception and spending habits. Our performance will depend significantly on factors that may affect the level and pattern of consumer spending in Malaysia. Such factors include consumer preference, consumer income, consumer confidence in and perception of the safety and quality of our products and shifts in the perceived value for our products relative to alternatives.

Consumer Preferences. There is no guarantee that the variety of produce we offer will continue to sustain popularity, that consumers will prefer the varieties of produce we offer, or that we will be successful in capturing a sufficient market share. If we are able to expand our product offerings, our financial performance will similarly be impacted by changes in consumer preferences.

Safety and Quality Concerns. Media coverage regarding the safety or quality of, or diet or health issues relating to, our products or the processes involved in the growth of our produce, may damage consumer confidence in our products. Any widespread safety or quality issues involving fresh fruits or vegetables — even if not involving us — could adversely affect consumer confidence in and demand for such vegetables or other fresh produce.

Consumer Income. A general decline in the consumption of our products could occur at any time as a result of change in consumer spending habits, including an unwillingness to pay a premium or an inability to purchase our products due to financial hardship, expectations of inflation, or increased price sensitivity.

The success of our products will depend on a number of factors, including our ability to accurately anticipate changes in market demand and consumer preferences, our ability to differentiate the quality of our products from those of our competitors, and the effectiveness of marketing and advertising campaigns for our products. We may not be successful in identifying trends in consumer preferences and growing or developing products that respond to such trends in a timely manner. We or our partners also may not be able to effectively promote our products by marketing and advertising campaigns and gain market acceptance. If our products fail to gain market acceptance, are restricted by regulatory requirements, have quality problems, or are affected by consumer perceptions of safety and quality even arising from our competitors’ products, we may not be able to fully recover costs and expenses incurred in our operations, and our business, financial condition or results of operations could be materially and adversely affected.

We build, manage and develop CEA vertical farms, which may be subject to unexpected costs and delays due to reliance on third parties for construction, material delivery, supply-chains and fluctuating material prices.

We build, manage, and develop CEA vertical farms that are dependent on a number of key inputs and their related costs, including materials such as steel and glass and other supplies, as well as electricity and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact our business, financial condition and operating results. If our suppliers encounter unexpected costs, delays or other problems in providing us with supplies, materials, or utilities, our financial position and ability to execute on our growth strategy could be negatively affected. Any inability to secure required supplies and services or to do so on appropriate terms could have a materially adverse impact on our business, financial condition and operating results.

The price of production, sale and distribution of these supplies may fluctuate widely based on the impact of numerous factors beyond our control, including international, economic and political trends, transportation disruptions, expectations of inflation, global or regional consumptive patterns, speculative activities and increased production due to new production and distribution developments and improved production and distribution methods. Additionally, we import some of the equipment and materials used to build CEA vertical farms facilities. Any prolonged disruption of third-party delivery and shipping services for materials may negatively affect development schedules for the CEA vertical farms we operate and manage, and delay the rates at which we ship produce to consumers and the rates in which our distributors ship produce to consumers. Rising costs associated with these delivery services may also adversely impact our building schedule and crop season planning, and more generally our business, financial condition, results of operations and prospects.

We face strong competition in the agricultural technology and vertical farming industries and cannot assure that we can maintain a competitive position against other market participants.

There are many competitors in the agricultural technology and vertical farming industry. There can be no guarantees that in the future other market participants will not enter these sectors by developing products and services that are in direct competition with us. One particularly strong limitation of CEA vertical farming compared to traditional crop production methods is that CEA vertical farming currently permits production of a restricted range of crops. The production of staple crops such as wheat and rice is a roadblock for large scale vertical farming due to these crops’ specific growth requirements and current vertical farming technology limitations. As a result, competitors with mega-farms, efficient transport connections, established distribution networks, and advanced food preservation technologies have competed more effectively than vertical farms in this respect.

We anticipate the presence as well as entry of other companies in our market space. There is a risk that we may not be able to establish, or if established, to maintain a competitive advantage in our market space. Some competing companies may have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales and marketing resources. This may allow them to respond more quickly than us to market opportunities. It may also allow them to devote greater resources to the marketing, promotion and sale of their products and/or services. These competitors may also adopt more aggressive pricing policies and make more attractive offers to existing and potential customers, employees, strategic partners, distribution channels and advertisers. Increased competition is likely to result in price reductions, reduced gross margins and a potential loss of market share.

We may experience unexpected network interruptions, security breaches or malware attacks (computer virus attacks) and failures in our and our subsidiary’s information technology systems, which may negatively impact our financial performance.

Information technology systems substantially support our and our operating subsidiary’s operations. If these systems fail to perform, we could experience disruptions in operations, slower response time and diminished operating results. System interruptions, errors, or downtime can result from a variety of causes, including unexpected interruptions to the internet infrastructure, technological failures, changes to the systems, erroneous or corrupted data, changes in client usage patterns, linkages with third-party systems, and power, employee misconduct, unauthorized trading, malware attacks (including but not limited to computer viruses, worms, ransomware, and spyware), cyberattacks, terrorist attacks, natural disaster, power outage, capacity constraints, software flaws, and other similar events.

Any failure to maintain the performance, reliability, security, or availability of the network infrastructure may cause significant damage to our and our operating subsidiary’s ability to continue operating profitably.

Cyber-attacks and security vulnerabilities could result in serious harm to our reputation, business, and financial condition.

Threats to network and data security are constantly evolving and becoming increasingly diverse and sophisticated. Our products and services, as well as our servers and computer systems and those of third parties that we rely on, are subject to cybersecurity risks inherent to companies that process personal data. An increasing number of organizations have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks.

We were informed, in July of 2025, by the Representative, that it had suffered a cybersecurity incident and specifically a ransomware incident, which has resulted in unauthorized access to some of the Representative’s systems and data, and the exfiltration of certain data from the Representative’s systems as well. The Representative has informed us that based on information currently available to the Representative regarding the incident, the Representative believes confidential information regarding the Company that we had provided to the Representative was included in the data that was exfiltrated. The Representative has informed us that it is still investigating the extent of this incident, and has also informed us that it does not have any evidence that this data has been misused at this time.

While we believe that any material data regarding the Company that was exfiltrated is reflected in this Report is therefore publicly available, we could be subject to liability risks to the extent the data consists of sensitive information about our officers, directors, personnel, contractors, customers, suppliers or vendors. We believe that any such risk is manageable and can be absorbed.

In addition to the identified risk above, any additional future cyber incidents and resulting data breaches involving the Company’s confidential data could result in substantial liability, regulatory actions, financial penalties, significant out of pocket costs, damage to our data and ability to do business, and reputational harm.

We and third parties that we rely on may experience cybersecurity incidents due to human error, malfeasance, system errors or vulnerabilities, or other issues. Actual or perceived cybersecurity incidents relating to our data or confidential information could subject us to regulatory investigations and orders, litigation, indemnity obligations, damages, penalties, fines and other costs in connection with actual and alleged contractual breaches, violations of applicable laws and regulations and other liabilities. Any such incident could also materially damage our reputation and harm our business, results of operations and financial condition.

We may not successfully develop our products and services or improve existing ones.

Our future success depends on successfully competing in markets for our products and services and our ability to improve our existing product lines and services and to develop and offer them to meet consumer needs. We cannot provide any assurance that we will be successful in doing so. We also cannot assure that we can provide product and service innovations that satisfy consumer needs or achieve market acceptance, or that we will do so in a timely manner to meet market demands. If we fail to do so, our ability to maintain or grow our market share may be adversely affected, which could materially adversely affect our business, financial condition and results of operations. In addition, the development and introduction of new products and services lines may require substantial research and development expenditures, which we may be unable to recoup if our products and services do not generate adequate revenue.

Investors should be aware of our related party transactions.  

Agroz Inc. and Agroz Group, on a consolidated basis, have had and continue to have significant related party transactions, set forth in more detail in the “Related Party Transactions” section. Our material related party transactions notably involve transactions for which the value involved is sizeable in comparison to the amount of assets we own. Investors should carefully review and consider the existence of these related party transactions before making an investment into the Company. To the best of its knowledge, the Company does not believe its past related party transactions were entered into on more favorable terms than terms in non-related party transactions. However, investors should be aware that the Company cannot assure the absence of conflicts of interests or influence of related parties over such related party transactions, despite its pricing practices.

Disruptions to transportation channels that we use to distribute our products may adversely affect our margins and profitability.

We may experience disruptions to the transportation channels used to distribute our products, including increased congestion, a lack of transportation capacity, increased fuel expenses, import or export controls or delays, and labor disputes or shortages. Disruptions in our trucking capacity may result in reduced sales or increased costs, including the additional use of more expensive or less efficient alternatives to meet demand. Congestion can affect previously negotiated contracts with shipping companies, resulting in unexpected increases in shipping costs, reduction in our profitability or reduced sales.

We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business.

Our ability to compete effectively depends in part on our rights to copyright, service marks, trademarks, trade names and other intellectual property rights we own or license. If we are unable to protect our intellectual property, proprietary information and/or brand names, we could suffer a material adverse effect on our business, financial condition and results of operations.

In particular, we own copyrights to (i) the software components of the current and future developmental version of Agroz OS; (ii) the PLC, an essential component enabling automation and environmental condition control and management, which PLC is integrated within the current version of Agroz OS; (iii) the source code to Agroz Copilot for Farmers; (iv) the source code to the Agroz DTC online marketplace; and (v) the codified standard operating procedure for various vertical farms we operate and manage. Malaysia copyright law grants protection automatically for such copyrights upon their creation, subject to the relevant criteria under the Malaysia Copyright Act 1987 being achieved. However, we cannot predict whether or not disputes concerning these copyrights will arise, in which case our financial performance may be negatively impacted by the potential expenditure of monetary and human resources in defense against such disputes. Further, while we are not required to register our copyrights, registering them provides additional legal certainty if disputes arise.

Further, we currently have two (2) trademark applications for the “Freshness You Can See, Hear and Taste” tagline which have been submitted to MYIPO. As of the date of this Report, MYIPO has provisionally rejected these applications, on the grounds that these trademarks have not met the following requirements under the Trademarks Act 2019: (A) Section 23(1)(b) of the Trademarks Act 2019, which requires a mark with distinctive character; and (B) Section 23(1)(c) of the Trademarks Act 2019, which states that trademarks may not be registered which mark consists only of signs or indications that may serve in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or rendering of services or other characteristics of goods or services. We have requested a hearing date with MyIPO to appeal the provisional refusals of these trademark applications and are currently awaiting further notice. Unlike copyrights, under Malaysian intellectual property law, unregistered trademarks do not receive automatic legal protection upon their creation. The Company may still continue using the “Freshness You Can See, Hear and Taste” tagline even if these trademark applications are provisionally refused or permanently rejected. However, if legal ownership of any unregistered trademark is challenged, the Company will have to defend its trademark and prove that its trademark was first used by the Company under common law to prevail against the challenger. We cannot assure that we will be successful on the upcoming appeal of the provisional refusals for the aforementioned trademark applications. Additionally, we cannot predict whether or not disputes concerning our unregistered trademarks or registered trademarks will arise. We do not currently anticipate material impacts on our business if we have to cease use of the “Freshness You Can See, Hear and Taste” tagline; however, our financial performance may be negatively impacted by the potential expenditure of monetary resources in defense against disputes on our unregistered trademarks.

Litigation may be necessary to enforce our intellectual property rights and protect our proprietary information, or to defend against claims by third parties that our products or services infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial costs and diversion of our resources. A successful claim of trademark, patent or other intellectual property infringement against us, or any other successful challenge to the use of our intellectual property, could subject us to damages or prevent us from providing certain products or services, or using certain of our recognized brand names, which could have a material adverse effect on our business, financial condition and results of operations.

Our failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our Ordinary Shares. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

Section 404 of the Sarbanes-Oxley Act of 2002, (“Section 404”), requires that we maintain internal control over financial reporting that meets applicable standards. We may err in the design or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met. Because there are inherent limitations in all control systems, there can be no assurance that all control issues have been or will be detected. If we are unable, or are perceived as unable, to produce reliable financial reports due to internal control deficiencies, investors could lose confidence in our reported financial information and operating results, which could result in a negative market reaction and a decrease in our stock price.

We are required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. We will need to disclose any material weaknesses identified by our management in our internal control over financial reporting. As an “emerging growth company,” we will avail ourselves of the exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404. However, we may no longer avail ourselves of this exemption if and when we cease to be an “emerging growth company.” When our independent registered public accounting firm is required to undertake an assessment of our internal control over financial reporting, the cost of our compliance with Section 404 will correspondingly increase. Our compliance with applicable provisions of Section 404 will require that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements. Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the U.S. Securities and Exchange Commission, or SEC, or other regulatory authorities, which would require additional financial and management resources.

As of the date of this Report, management has identified certain material weaknesses in our internal controls pertaining to (i) our lack of effective information technology (“IT”) general controls (ITGC) (which are the basic set of controls for our IT systems, including applications, operating systems, databases, and IT infrastructure), (ii) our lack of sufficient financial reporting and accounting personnel with knowledge of IFRS and SEC reporting requirements, (iii) our inadequate segregation of duties on sale and customers’ data management, and (iv) the lack of formal internal control policies and internal independent supervision functions to establish formal risk assessment process and internal control framework.

Following the identification of the material weaknesses and control deficiencies, we plan to take remedial measures, including: 1) hiring experienced IT staff to formalize and strengthen our ITGC; 2) hiring additional finance and accounting staff with qualifications and work experiences in IFRS and SEC reporting requirements to formalize and strengthen key internal controls over financial reporting; 3) allocating sufficient resources to prepare and review financial statements and related disclosures in accordance with IFRS and SEC reporting requirements; and 4) establishing an internal control and governance function to implement internal controls and governance process and procedures within the Company either by hiring internally or outsourcing the function.

If we identify new material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting in the future, we may be late with the filing of our periodic reports, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. As a result of such failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business, and would have a material adverse effect on our business, financial condition and results of operations.

We may be unable to successfully implement our future business plans and objectives.

Our future business plans may be hindered by factors beyond our control, such as competition within the industry we operate; our ability to cope with high exposure to financial risk, operational risk, and market risk as our business expands; and our ability to provide, maintain, and improve the level of human and other resources in generating products and providing services. As such, we cannot assure you that our future business plans will materialize, that our objectives will be accomplished fully or partially, or that our business strategies will generate the intended benefits to us as initially contemplated. If we fail to implement our business development strategies successfully, our business performance could be materially and adversely affected.

We are exposed to potential disruptions and risks from unforeseen disasters or crises.

Our operations and business continuity depend on our ability to operate CEA vertical farms and systems without significant interruption. Unforeseen events such as natural disasters, pandemics, power outages, or other catastrophic events could potentially disrupt our operations, leading to business interruption, financial loss, and damage to our reputation. While we have in place business continuity plans, these plans might not be sufficient to mitigate all potential disruptions. Furthermore, in the context of a global pandemic, our operations may be severely impacted due to government-imposed restrictions, widespread illness among our employees, or disruptions in our supply chain. There is no guarantee that our contingency plans could fully prevent or remediate the effects of such unforeseen disasters or crises. Thus, our financial condition, results of operations, and business prospects may be adversely affected.

We depend on key management personnel and our operations may suffer if we are unable to retain or replace them.

We have a team of experienced and competent management which is responsible for directing and managing daily operations, monitoring and supervising compliance and risk management, overseeing financial condition and performance, allocating and budgeting human resources, and formulating business strategies. However, we cannot assure you that we can retain the services of our key management and find suitable replacements if any of them terminate their engagement with us, are unable or unwilling to continue their services, or in the event of death.

Other than our senior management, we also rely on our professional staff in different business operations to implement our business strategies, provide quality services to clients, manage our compliance and risks, identify and capture business opportunities, maintain relationship with clients, and procure new clients. Loss of our professional staff and failure to recruit replacements for such staff will materially and adversely affect our business operations.

We may be subject to the threat or possibility of litigation, arbitration, or other legal proceedings.

We and our directors and officers may from time to time become subject to or involved in various claims, controversies, lawsuits, and regulatory or legal proceedings. Claims, lawsuits, and litigations are subject to inherent uncertainties, and we are uncertain whether the foregoing claims would develop into a lawsuit. Lawsuits and litigations may cause us to incur defense costs, utilize a significant portion of our resources and divert management’s attention from our day-to-day operations, any of which could harm our business. Any settlements or judgments against us could have a material adverse impact on our financial condition, results of operations and cash flows. In addition, negative publicity regarding claims or judgment made against us may damage our reputation and may result in a material adverse impact on us.

As of the date of this Report, the Company is a party to a civil lawsuit through its operating subsidiary, Agroz Group Sdn. Bhd. (“Agroz Group”), when on February 5, 2026, V Capital Consulting Limited (“VCCL”) commenced a civil lawsuit against Agroz Group Sdn. Bhd. in High Court of Malaya at Shah Alam (Civil Suit No. BA-22NCVC-39-02/2026). VCCL was previously engaged by Agroz Group Sdn. Bhd. to provide advisory services in connection with the proposed initial public offering on the Nasdaq Stock Market. VCCL alleges that an outstanding consulting fee of $903,213.86 remains due and payable, and claims said amount together with contractual interest and legal costs. Agroz Group Sdn. Bhd. vehemently disputes VCCL’s claims in their entirety and has filed a formal Counterclaim against VCCL and its representative, Hoo Voon Him (“HVH”), claiming $1,250,000.00, together with interest and costs, for damages resulting from alleged misrepresentations and failure to deliver contractual obligations in connection with the fundraising exercise for the proposed Nasdaq listing. As of December 31, 2025, the Company has accrued the full contractual consulting fee liability of $1,000,000 within other payables, with a corresponding deduction from additional paid-in capital. Based on the advice of external litigation counsel, the Company has a reasonable prospect of successfully resisting VCCL’s claim and succeeding in its counterclaim. Consequently, management has determined that no additional provision for damages, interest, or legal costs is required under IAS 37 as of December 31, 2025. In accordance with IAS 37, the Company’s counterclaim of USD 1,250,000 has not been recognized as an asset on the balance sheet. The parties are currently complying with pre-trial directions, with the next case management session and a hearing on the Company’s application for security for costs scheduled for November 19, 2026.

Lawsuits may have a material adverse effect on our business, financial condition, or operations.    Actions brought against us may result in settlements, awards, injunctions, fines, penalties, and other results adverse to us. A substantial judgment, settlement, fine, or penalty could be material to our operating results or cash flows for a particular period, depending on our results for that period, or could cause us significant reputational harm, which could harm our business prospects.

Risks Related to The Shares

The trading price of the Shares may be volatile, which could result in substantial losses to you.

The trading prices of the Shares are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen due to broad market and industry factors, such as performance and fluctuation in the market prices or underperformance or deteriorating financial results of other listed companies. The securities of some of these companies have experienced significant volatility since their IPOs, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of other Malaysian companies’ securities after their IPOs may affect the attitudes of investors toward Malaysia-based, U.S.-listed companies, which consequently may affect the trading performance of the Shares, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure, or matters of other Malaysian companies may also negatively affect the attitudes of investors toward Malaysian companies in general, including us, regardless of whether we have conducted any inappropriate activities. Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are unrelated to our operating performance.

In addition to the above factors, the price and trading volume of the Shares may be highly volatile due to multiple factors, including the following:

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future.

We rely on dividends and other distributions on equity paid by our operating subsidiary to fund our cash and financing requirements, and any limitation on the ability of any current or future subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.

Agroz is a holding company, and we rely on dividends and other distributions on equity paid by our operating subsidiary for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and to service any debt we may incur. There was no transfer of assets between Agroz Group and Agroz in the fiscal year ended December 31, 2024, however a total of $3,776,991 were transferred between Agroz and Agroz Group during the year ended December 31, 2025, and we do not expect Agroz Group to pay us dividends in the foreseeable future. We do not expect to pay cash dividends in the foreseeable future. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

According to the Malaysian Companies Act 2016, a Malaysian company may only make dividends distributions out of profits of the company if the company is solvent. Such company is deemed solvent if the company is able to pay its debts as they fall due within twelve (12) months immediately after the distribution is made. Under the current practice of the Inland Revenue Board of Malaysia, no tax is payable in Malaysia in respect to dividends paid by us. Any limitation on the ability of our Malaysia subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

Any limitation on the ability of our subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

If we fail to meet applicable continued listing requirements, Nasdaq may delist the Shares from trading, in which case the liquidity and market price of the Shares could decline.

We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists the Shares, we and our shareholders could face significant material adverse consequences, including:

The U.S. National Securities Markets Improvement Act of 1996 prevents or pre-empts the states from regulating the sale of certain securities, which are referred to as “covered securities.” The Shares are listed on Nasdaq, so they are covered securities. Although the states are pre-empted from regulating the sale of our securities, this statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

On February 17, 2026, the Company received a deficiency letter (“Deficiency Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Capital Market (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company’s Ordinary Shares was below the minimum $1.00 per share requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). As of the date hereof, the Hearings Panel has made a delisting determination and the Company will appeal its delisting determination to a Hearings Panel.

On May 18, 2026, the Company received a notification letter (“Notice”) from the Listing Qualifications Department of Nasdaq indicating that, because the Company has not yet filed its Form 20-F for the year ended December 31, 2025, the Company no longer complies with Nasdaq Listing Rule 5250(c)(1). The Company anticipates regaining compliance prior to its scheduled hearing on September 29, 2026.

You may have a diminished return on your investment in the Company due to the Company’s issued and outstanding RCPS. Holders of Shares also have certain rights junior to those of the RCPS holders.

Our RCPS holders may, at their election, convert each RCPS into one (1) Ordinary Share on or before the second anniversary of the issuance date of the RCPS (the “Maturity Date”). No further consideration is payable for such conversion. If the RCPS holders elect conversion, your ownership stake in the Ordinary Shares will be diluted. If we determine to issue more RCPS in the future, your ownership stake in the Ordinary Shares will also be diluted upon the RCPS holders’ election to convert their RCPS.

RCPS holders may also at their election redeem their RCPS in whole or in part for the subscription amount of the RCPS at any time after the RCPS share issuance date, after which we must pay the redemption proceeds to the RCPS shareholder. Further, all RCPS which are outstanding as of the Maturity Date and have not been converted into Ordinary Shares will be fully redeemed by us at the subscription price of the RCPS. The funds which we use towards redemption payments will be diverted from funds we could have used for other corporate purposes. Therefore, you may experience a diminished return on your investment in the Company through your ownership of the Ordinary Shares.

Further, holders of RCPS are entitled to receive dividends out of any assets legally available prior to any dividends payable to the Ordinary Shares, at a rate of 10% per annum of the RCPS holders’ subscription amount for the RCPS. The funds allocated towards these interest payments will also divert from funds we could have used for other corporate purposes and dividend payments to holders of Ordinary Shares. Investors should be aware of the risk of diminished returns on their investment and certain junior rights to those of RCPS holders before purchasing Shares.

Because the amount, timing, and whether or not we distribute dividends at all is entirely at the discretion of the Board of Directors, you must rely on price appreciation of the Shares for return on your investment.

The Board of Directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law and our Memorandum and Articles of Association. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by the Board of Directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that under no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if the Board of Directors decides to declare and pay dividends, the timing, amount, and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow; our capital requirements and surplus; the amount of distributions, if any, received by us from our subsidiaries; and our financial condition, contractual restrictions, and other factors deemed relevant by the Board of Directors. Accordingly, the return on your investment in the Ordinary Shares will likely depend entirely upon any future price appreciation of the Ordinary Shares. We cannot assure you that the Shares will appreciate in value or even maintain the price at which you purchased the Ordinary Shares. You may not realize a return on your investment in the Ordinary Shares, and you may even lose your entire investment in the Ordinary Shares. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements of the Exchange Act. We will design our disclosure controls and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of a person, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and may not be detected.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our Ordinary Share price or trading volume to decline.

If a trading market for the Shares develops, the trading market will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a new public company, we may be slow to attract research coverage and the analysts who publish information about our Ordinary Shares will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our share price, our share price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our share price or trading volume to decline and result in the loss of all or a part of your investment in us.

Certain judgments obtained against us by our shareholders may not be enforceable.

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands. We conduct our operations outside the United States and substantially all of our assets are located outside the United States. In addition, substantially all of our directors and executive officers and the experts named in this Report reside outside the United States, and most of their assets are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against them in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Malaysia, or other relevant jurisdictions may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

Our counsel as to the laws of the Cayman Islands, Carey Olsen Cayman Limited, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us based on certain civil liability provisions of the federal securities laws of the United States or any state, and (ii) in original actions brought in the Cayman Islands, impose liabilities against us based on the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature.

There is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a foreign judgment, without any re-examination or re-litigation of matters adjudicated upon, provided such judgment: (a) is given by a foreign court of competent jurisdiction; (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; (c) is final; (d) is not in respect of taxes, a fine or a penalty; e) was not obtained by fraud; and (f) is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.

Subject to the above limitations, in appropriate circumstances, a Cayman Islands court may give effect in the Cayman Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions. 

There is uncertainty as to whether the courts of Malaysia would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in Malaysia against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Malaysia at common law by bringing an action in a Malaysia court on that judgment for the amount due thereunder and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty), and (2) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Malaysia if (a) it was obtained by fraud, (b) the proceedings in which the judgment was obtained were opposed to natural justice, (c) its enforcement or recognition would be contrary to the public policy of Malaysia, (d) the court of the United States was not jurisdictionally competent, or (e) the judgment was in conflict with a prior Malaysia judgment. Malaysia has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Malaysia, in original actions or in actions for enforcement, of judgments of U.S. courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any state or territory within the United States.

You may have more difficulties protecting your interests than you would as a shareholder of a U.S. corporation.

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by the provisions of our Memorandum and Articles of Association, and by the provisions of the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take action against the Board of Directors, actions by minority shareholders, and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands.

The rights of shareholders and the fiduciary duties of our directors and officers under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands-exempted companies like us have no general rights under Cayman Islands law to obtain copies of the register of members or inspect corporate records (other than the memorandum and articles of association and any special resolutions passed by such companies, and the register of mortgages and charges of such companies) of the company. Our directors have discretion under our Memorandum and Articles of Association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, or members of the Board of Directors than they would as public shareholders of a company incorporated in the United States.

Cayman Islands economic substance requirements may have an effect on our business and operations.

Pursuant to the International Tax Cooperation (Economic Substance) Act (as revised) of the Cayman Islands (“ES Act”), which became effective on January 1, 2019, a “relevant entity” conducting a “relevant activity” is required to satisfy the applicable economic substance test set out in the ES Act. A “relevant entity” includes, among other things, an exempted company incorporated in the Cayman Islands which is not a tax resident outside of the Cayman Islands. There are nine designated “relevant activities” under the ES Act, and for so long as our Company is a “relevant entity” carrying on a “relevant activity”, it is required to comply with all applicable requirements under the ES Act. If the only business activity that the Company carries on is to hold equity participation in other entities and only earns dividends and capital gains, then based on the current interpretation of the ES Act, the Company is a “pure equity holding company” and will therefore be subject to a reduced economic substance test which currently would require us to (i) comply with all applicable requirements under the Companies Act and (ii) have adequate human resources and adequate premises in the Cayman Islands for holding and managing equity participations in other entities. However, there can be no assurance that we will not be subject to more requirements under the ES Act. Uncertainties over the interpretation and implementation of the ES Act may have an adverse impact on our business and operations.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and, as such, we are exempt from certain provisions applicable to U.S. domestic public companies.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, should we intend to publish any of our semi-annual results in press releases, it will be distributed pursuant to the rules and regulations of Nasdaq Capital Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.

As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq rules that allow us to follow our home country law for certain governance matters. Certain corporate governance practices in our home country, the Cayman Islands, may differ significantly from corporate governance listing standards, except for general fiduciary duties and duties of care, Cayman Islands law has no corporate governance regime which prescribes specific corporate governance standards. Currently, we do not intend to rely on home country practices with respect to our corporate governance. However, if we choose to follow home country practices in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a foreign private issuer, and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Ordinary Shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors, and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As an SEC reporting and U.S. listed company that is not a foreign private issuer, we will incur significant additional legal, accounting, and other expenses that we will not incur as a foreign private issuer in order to maintain a listing on a U.S. securities exchange.

We are an emerging growth company within the meaning of the JOBS Act and may take advantage of certain reduced reporting requirements.

We are an emerging growth company, as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies, including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley for so long as we remain an emerging growth company. As a result, if we elect not to comply with such attestation requirements, our investors may not have access to certain information they may deem important when compared to public companies which are not emerging growth companies.

We incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

We incur significant legal, accounting, and other expenses as a public company. The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), as well as rules subsequently implemented by the SEC, impose various requirements on the corporate governance practices of public companies. We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this Offering, (b) in which we have total annual gross revenue of at least US$1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of the Shares that is held by non-affiliates exceeds US$700 million as of the end of any second fiscal quarter before that time; and (2) the date on which we have issued more than US$1 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay the adoption of new or revised accounting standards until such time as those standards apply to private companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time consuming and costly. After we are no longer an “emerging growth company,” or until five years following the completion of our IPO, whichever is earlier, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of Sarbanes-Oxley and the other rules and regulations of the SEC. For example, as a public company, we will be required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We will incur additional costs in obtaining director and officer liability insurance. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on the Board of Directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

ITEM 4. INFORMATION ON THE COMPANY

The Company

We are a vertically integrated agricultural technology (“AgTech”) company focused on designing, innovating, developing, building, operating and managing large, commercial scale, industrial grade indoor CEA vertical farms using CEA practices. Our mission is to improve food safety, food security, and sustainability for society by creating a reliable, accessible food supply through our AgTech products and services.

CEA vertical farming

CEA vertical farming is an innovative agricultural method involving crop cultivation through vertically stacked layers in a controlled indoor environment. CEA practices are defined by growing produce in spaces where environmental conditions can be controlled and manipulated to match the needs of specific plants. Typically, such farming techniques also utilize hydroponic or aeroponic systems for cultivation, in which plants are grown without soil and instead in water-based nutrient solutions and mists, respectively.

CEA vertical farming presents certain advantages over traditional produce sourcing methods. For one, this method enables efficient space utilization. When grown in vertically stacked layers instead of horizontal ones, more crops can be grown within the same amount of land. With CEA practices, undesirable environmental conditions, such as adverse weather, natural disasters, and pests, amongst others, can be prevented and the crop production process made more predictable. Other advantages include decreased water consumption, shorter plant growth cycles, reduced reliance on pesticides and herbicides, and reduced environmental impact. Operators also have more flexibility when deciding the location of CEA vertical farms, which can even include underground locations, thereby enabling hyper-localized production and cost savings.

We believe there is vast market potential for the AgTech and CEA vertical farming markets globally and in the Southeast Asian region. Starting with Malaysia, we aim to match the top-grade products we have available to the markets in which they are the most highly demanded.

CEA Vertical Farms We Operate and Manage

Currently, the CEA vertical farms we operate and manage include: (i) a 10,021 square foot indoor CEA vertical farm in Kota Damansara; (ii) a 5,239 square foot EduFarm at the AEON Mall Alpha Angle, a shopping center in Wangsa Maju, Kuala Lumpur, Malaysia (“AEON Alpha Angle”). The Malaysia Book of Records recognizes the EduFarm as the largest indoor vertical farm located inside a shopping mall in Malaysia. Additionally, in June of 2024, the Malaysian government, through the Ministry of Agriculture and Food Security, recognized the EduFarm for meeting its standards for Malaysian Good Agricultural Practices (“myGAP.PF”) in being pesticide free. MyGAP.PF is a certification scheme recognizing recognition farms which adopt agricultural practices with an environmentally friendly concept, safeguarding the welfare and safety of workers and do not use synthetic pesticides to produce quality, safe and edible products. This certification covers 20 types of vegetables, including green butterhead, red butterhead, green coral, red coral, wild rocket, green kale, and arugula, to name a few.

The above photographs were taken inside certain Agroz indoor CEA vertical farms.

Agroz EduFarm-in-City at AEON Mall Alpha Angle.

On the EduFarm tour, visitors can see the technology behind Agroz’s clean and pesticide-free vegetables.		In the EduFarm, families can learn about how clean and fresh vegetable farming is possible.

Our Business

We primarily derive our revenue from:

We offer a comprehensive set of farm solutions to our clients. We work with clients to set up CEA vertical farms, starting with the design phase, and continuing into the construction and implementation phrase. We build the structural framework for the vertical farms, install their interior components, and integrate the Agroz OS which is essential to the operation of the vertical farms we design and/or construct. After constructing the CEA vertical farms, we assist clients with operation and management as needed.

We design and/or construct indoor vertical farms for our clients according to their specific needs. This involves vertical farm layout planning, infrastructure design, framework erection, structural construction, equipment set-up and implementation of Agroz OS within the holistic controlled environment-system we devised, which is essential to the operation of the vertical farms we established. Agroz OS integrates both hardware and software solutions and aims at improving productivity, boosting yield and improving the quality of produce. Agroz OS is comprised of:

For a more complete description of the types of hardware and software solutions in Agroz OS, see “Products and Services” below.

Following the successful design and/or construction of CEA vertical farms, we also offer our clients operation and management services, overseeing the day-to-day farm operations, using all of the intellectual property we have developed, including Agroz OS and the standard operating procedure supporting CEA vertical farm operations, and performing regular maintenance on all the integrated systems.

Currently, the vertical farms we operate and manage include: (i) a 10,021 square foot indoor vertical farm in Kota Damansara and (ii) a 5,239 square foot educational vertical farm (“EduFarm”) at the AEON Mall Alpha Angle, a shopping center in Wangsa Maju, Kuala Lumpur, Malaysia (“AEON Alpha Angle”), which is recognized by the Malaysia Book of Records, a publication of record setting achievements, as the largest indoor vertical farm located inside a shopping mall in the country. Additionally, in June of 2024, the Malaysian government, through the Ministry of Agriculture and Food Security, recognized the EduFarm for meeting Malaysian Good Agricultural Practices (“myGAP.PF”) requirements in being pesticide free. MyGAP.PF is a certification scheme recognizing recognition farms which adopt agricultural practices with an environmentally friendly concept, safeguarding the welfare and safety of workers and do not use synthetic pesticides to produce quality, safe and edible products. This certification covers 20 types of vegetables, including green butterhead, red butterhead, green coral, red coral, wild rocket, green kale, and arugula, to name a few.

Through the EduFarm, we also supply fresh produce sold at AEON Alpha Angle and at certain supermarkets operated by AEON Co. (M) Berhad (“AEON”).

We sell CEA vertical farms to potential buyers once they are fully operational and optimized. Each CEA vertical farm includes Agroz OS. We aim to achieve high-yield crop production and resource management through the CEA vertical farms.

We generate revenue from the sale of fresh produce generated at the CEA vertical farms we operate and manage. To date, we have successfully grown 50 different crops and are currently selling 21 varieties on the market. Our key distribution avenue is the direct distribution of fresh produce to wholesale distributors and retailers, including to several large supermarket brand retailers in Malaysia, such as AEON and Village Grocer.

(v) Trading of fresh produce

We also generate revenue from trading activities by buying and selling fresh produce from local farms and other wholesalers. The buying of fresh produce from other local farms and suppliers is for the supply to our other business customers other than our large supermarket brand retailers.

Our Business Strategies

Below are our current strategies for our growth and development as a company.

Our Competitive Strengths

We believe the following strengths differentiate us from our competitors:

Our plant machine modules, used within the CEA vertical farms we operate.

Technical specifications for our plant machine modules.

Vertical integration

We believe a core feature that sets us apart from our competitors is our status as a fully vertically integrated agricultural technology provider of (i) services for the design and/or construction of vertical farms; (ii) services for the operation and management of vertical farms; and (iii) fresh produce. To our knowledge, no company in Malaysia or Southeast Asia currently holds this status.

Innovative and Advanced Agriculture Technology (AgTech) solutions

We have proprietary CEA software, which we believe gives us a competitive advantage over other market players. We own the underlying source code to all of the software components of Agroz OS, including (i) the source code to the software platform itself, (ii) the Agroz ERP and DTC online marketplace integrated within, and (iii) the PLC which is an essential component enabling automation and environmental condition control and management within the vertical farms we operate, also integrated within Agroz OS.

We are currently a Microsoft Independent Software Vendor (ISV) and a Microsoft AI Cloud partner. These relationships with Microsoft have allowed us to build, publish and develop our cloud-based Agroz OS software application on Microsoft Azure, Microsoft’s cloud computing platform, and gain access to various software and development tools owned by Microsoft. Previously, we were part of the Microsoft for Startups Founders Hub, an accelerator for startups in which we received access to different resources from Microsoft, including leading artificial intelligence models through Microsoft Azure, Github, Microsoft Teams and Microsoft 365. This accelerator also gave us access to a global network of Microsoft experts and mentors.

We have also used the latest generative artificial intelligence technologies made available through Microsoft Azure OpenAI Service to build and develop Agroz Copilot, which launched in October 2025.

Our CEA methods and technology solutions have allowed us to yield approximately three (3) tons of green produce every year for every 300 square feet of space, stacked 8 levels high, in the CEA vertical farms we operate and use only five percent (5%) of the water and nutrients required compared to conventional agricultural methods of production. We also precisely manage our water use and deploy tailored artificial lighting to maximize the growth potential of our vegetables, eliminating the need to irrigate vast expanses of land like traditional farms do.

Healthy, clean and fresh vegetables

We deliver healthy, clean, and freshest vegetables to our customers. We go beyond organic practices by growing clean and fresh vegetables in a safe and sustainable manner. The CEA vertical farms we operate utilize non-GMO seeds and organic nutrients that are free from harmful chemicals, pesticides, fungicide, insecticide and herbicide.

Strategic Partnership with AEON Co. (M) Berhad

We have a strategic partnership with AEON, a leading Malaysian retailer, which we believe can allow us to revolutionize the traditional grocery shopping experience and attract more high-consumption customers. AEON provides us with an open space within its mall, AEON Alpha Angle in Wangsa Maju, to build a commercial indoor CEA vertical farm. This farm known is what we call an “EduFarm,” which is open to the public for weekend tours, thereby offering educational and experiential learning. Currently, the EduFarm is Malaysia’s largest indoor CEA vertical farm located inside a shopping mall. The produce we generate at the EduFarm is sold to visitors of AEON Alpha Angle as well as to supermarkets operated by AEON, including AEON MaxValu Prime.

We have also introduced a unique concept called “Farm In Supermarket,” allowing shoppers to select and purchase vegetables of their choice from a showcase display of a CEA vertical farm located at AEON MaxValu Prime. We believe that our partnership with AEON has revolutionized traditional grocery shopping experience by offering customers the opportunity to harvest their own-selected vegetables.

Positive public image

United Nations

The United Nations Development Programme (UNDP), a United Nations (“UN”) agency, identifies us as an active CEA market player. On June 19, 2023, the UNDP, together with the government of Malaysia through the Ministry of Investment, Trade and Industry (“MITI”) and the Malaysian Investment Development Authority (MIDA), launched the Malaysia SDG Investor Map (the “Map”). The Map is an online market intelligence tool designed to help private investors find investment opportunities that are aligned to, and compliant with, the UN’s Sustainable Development Goals (“SDGs”). CEA was identified as an investment opportunity area within the Map, and we were identified therein as a company active in the CEA space.

We are strongly committed to supporting the UN’s SDGs. Our community-based indoor CEA vertical farms are at the forefront of supporting the UN’s SDGs. Currently, we actively contribute to ten (10) out of its 17 SDGs. By aligning our operations with these SDGs, we strive to make a positive impact on society and the environment, advancing sustainable development and creating a better future for all. We believe the UN Development Programme’s recognition of us as an active CEA market player makes us unique and establishes our robust market position against our competitors.

ESG Association of Malaysia

The ESG Association of Malaysia (ESG Malaysia), a centralized education platform enabling environmental, social, and governance (“ESG”) adoption and development in Malaysia and supporting the country’s sustainability journey, recognized Agroz Group as a member in December of 2022. This membership allows Agroz Group to be part of ESG Malaysia’s international development network, with access to various ESG-related tools and resources, which Agroz Group believes to enable it to contribute positively to the ESG field and benefit the future of Malaysia.

The Academy of Sciences

The Academy of Sciences, the highest scientific advisory body of Malaysia, made mention of Agroz Group in its Science Outlook Report for 2020. Agroz Group was described as an example of a successfully established indoor CEA vertical farming initiative in such report’s broader discussion of agricultural practices addressing food supply issues in Malaysia.⁷

Our Products and Services

Products

(i)  CEA vertical farms

We design and/or construct indoor CEA vertical farms for our clients according to their specific needs and in exchange for an agreed upon fee. Our design and/or construction services involve choosing and/or recommending the location for the vertical farm and overseeing and executing all aspects of the building of a vertical farm from raw material. Central to the design and/or construction of the indoor vertical farms is our installation and implementation of Agroz OS, the holistic system that enables operation of the vertical farms. This system incorporates both automated hardware and software solutions and is physically administered through our Agroz OS cloud software application, available through Microsoft Azure Cloud.

The automated hardware components of Agroz OS include:

b) Water management devices which filter and clean water using ultraviolet light to deter bacteria and viruses and reduce algae growth;

c) Irrigation and nutrient fertigation systems which control the precise mix of nutrients with water, specifically tailored to the type of cultivar being grown and their stage of growth;

d) Horticulture light-emitting diode (LED) lighting systems which are adjustable as to type of light spectrum, intensity and duration depending on the type of crop being grown and the stage of growth they are at;

e) Energy monitoring and management devices which monitor and optimize energy use within the CEA farm. These devices combine existing grids which connect electrical supplies to renewable green energy (“RE”) systems, including solar photovoltaics;

f) Monitoring systems which include Human Machine Interface devices (HMI), enabling continuous and real-time monitoring and setting configuration through touchscreen interfaces; and

g) Internet of Things (IoT) sensors connected to PLCs (or industrial computers), which collectively enable data collection and the control and automation of: (1) nutrient mixing, (2) irrigation, fertigation and nutrient provision to produce; (3) horticulture LED lighting; and (4) air conditioning and temperature settings within the vertical farm.

A snapshot of the Agroz HMI screen showing the continuous and real-time monitoring system.

Parameters can be set through the HMI to configure and control the systems through a touchscreen interface.

As of the date of this Report, we implemented in Agroz OS: (i) the above digitally automated hardware systems for Agroz OS (ii) software solutions enabling email and communication systems for farm organization, including Email, Microsoft 365, Microsoft Teams, and file sharing through Microsoft OneDrive; (iii) an AI agent system (as further described below); and (iv) Agroz ERP (as further described below). The software solutions enabling email and communication systems mentioned above and Agroz ERP are supported by Microsoft Azure and Microsoft Azure AI, which solutions are possible pursuant to being Microsoft ISV and Microsoft AI Cloud Partner under the Microsoft Publisher Agreement and Microsoft AI Cloud Partner Program Agreement filed herein as Exhibits 10.7 and 10.8, respectively.

Agroz ERP is a software system that tracks every aspect of the vertical farm’s business activities, including: (1) farm input materials (i.e., seeds, nutrients, growth media, packaging, consumables, carbon dioxide); (2) growth of produce at different stages; (3) farm personnel activity; (4) harvest inventory; (5) sales orders, invoices, and deliveries, and (6) accounting records. Agroz ERP is also accessible as a mobile application

The AI agent system integrated into Agroz OS is supported by Microsoft AI and capable of presenting complex agricultural decisions to farm managers and farm owners and autonomously executing such decisions after human approval is received. The AI system’s agents can undertake complex multi-step autonomous actions within vertical farms and result in vertical farms which can be independently and automatically operated. Investors should be aware that such AI agent system is distinct from the Agroz Copilot; by contrast, Agroz Copilot is a GenAI application separate from Agroz OS, which enables human farmers to input queries and instructions into an application to receive recommendations for assistance with daily tasks, not a system for autonomous functioning of vertical farms.

Agroz OS also includes, which aids users in financial reporting and bookkeeping, with such accounting software stored on cloud servers and financial information protected by encryption technology and firewall.

(ii) Fresh produce

We deliver healthy, clean, and fresh vegetables to our customers. We go beyond organic practices by growing clean and fresh vegetables in a safe and sustainable manner. The vertical farms we manage and operate utilize non-genetically modified organism (“non-GMO”) seeds and organic nutrients that are free from harmful chemicals, pesticides, fungicide, insecticide and herbicide.

As of December 31, 2025, we have successfully grown over 50 types of nutrient rich, pesticide free, fresh vegetables using our proprietary agricultural technology and are offering 21 varieties on the market (the latter which are indicated with bold text in the table below):

In 2024, we focused more on the superfood category, including baby spinach and microgreens.   We anticipate increasing our promotion of existing superfoods products such as kale, arugula and wild rocket. Not only are superfoods nutrient rich, they sell at higher prices and price margins. We expect to maintain our focus on this category in 2025 as part of our ongoing product strategy.

The average price which we sell our superfoods for is MYR 9.18, and our gross profit margin on superfoods is 25%. The average price which we sell our non-superfoods for is MYR 3.37, and our average gross profit margin on non-superfoods is 5%.

We believe that our promotion of superfood products will allow us to differentiate ourselves from producers who primarily offer leafy green produce.

(iii) Services

Equipped with our knowledge and expertise regarding vertical farm management, we offer different services to aid in our clients’ vertical farm initiatives. These services include: (i) assisting clients with their design and/or construction of indoor vertical farms, tailored to their specific needs; and, (ii) upon our clients’ election, managing and operating their vertical farms. The design and/or construction of vertical farms involves our choosing and/or recommending the location for the vertical farm and overseeing and executing all aspects of the building of the vertical farm from raw material.

The operation and management services we offer include overseeing of day-to-day CEA vertical farm operations, using all of the intellectual property we have developed, including Agroz OS and the standard operating procedure supporting farm operations. We also perform regular maintenance of our clients’ CEA vertical farm systems.

Market and Growth 

Global agricultural market

We believe there is great market potential for the global agricultural technology and vertical farming markets and anticipate much growth therein, based on various sources and market factors. According to Phoenix Research, a reputed market research firm, the global agricultural technology market was valued at USD 18.24 billion in 2024, and is projected to grow to USD 43.37 billion by 2029, representing a CAGR of 16.63%.⁸ Straits Research, another market researcher, estimated that the global indoor farming market size was valued at USD 45.97 billion in 2024, and is expected to reach USD 138.09 billion by 2033, with a CAGR of 13% over the forecast period. ⁹.

This market growth is reportedly driven by factors such as the increasing adoption of vertical farming, the expansion of indoor farming technology, and the growing demand for higher crop yields to meet the rising global food demand.¹⁰ As an alternative to conventional produce gathering methods, vertical farming can cater to the needs of this rising global demand. Statista reported that the global market size of vertical farming was valued at USD $5.6 billion in 2022¹¹ and according to J&A Capital Markets Report by Jahani & Associates, the market is projected to experience a compounded annual growth rate (CAGR) of 20.8%, reaching $21 billion by the year 2029.¹² The market size of vertical farming in the Asia Pacific region reached US$2.43 billion in 2023 and is projected to experience growth at a CAGR of 29.2% from 2024 to 2030.¹³

The Malaysian agricultural market

Within Malaysia, agricultural production is projected to grow at a CAGR of 0.6% from 2021 to 2026, reaching USD 24.9 billion by 2026, compared to USD 23.9 billion in 2021, according to ReportLinker.¹⁴ The same source cites a forecasted revenue for the Malaysian agricultural sector in 2027 as MYR 161 billion.¹⁵ In 2022, agriculture was the third-highest GDP contributor to the Malaysian economy, constituting approximately 8.93% of its GDP,¹⁶ according to Ethis, an investment platform with branches and representative offices in Malaysia and Indonesia, and the Sultanate of Oman.¹⁷ We believe we can cater to the needs of this growing demand with our high-quality products.

The Malaysian government has also been supportive of improved technology and innovation in the agricultural sector, which we believe will contribute further to the growth of the Malaysian vertical farming market.¹⁸ We believe this growth will allow us to establish a favorable position in the market, especially given our advantages over competitors. Among other things, the government has established an action plan that prioritizes the acceleration of controlled environment agriculture, particularly the production of vegetables through plant factories.¹⁹ This approach supports urban agriculture and the cultivation of high-value crop-based products. Furthermore, the government extends its support to programs and initiatives that aim to empower community agriculture.²⁰ These efforts provide assistance and resources to strengthen local agricultural communities, fostering their capacity to produce vegetables and contribute to the overall sustainability and development of the vegetable industry.

The revenue potential of vertical farming is also expected to lead to growth in this industry in the years to come. According to a report by Food and Fertilizer Technology Center, an international agricultural organization, the income statements of three premises (commercial-scale warehouse plant factory, medium-scale or shop-lot plant factory and small container plant factory) indicated that commercial vegetable production through plant factories can be financially viable and yield profits. This is supported by the positive net present value and internal rate of return cited for all three premises in the report.²¹

Competition

We believe a core feature that sets us apart from our competitors is our status as a fully vertically integrated agricultural technology provider of (i) services for the design and/or construction of vertical farms; (ii) services for the operation and management of CEA vertical farms; and (iii) fresh produce.

We believe that competitors identified below only compete with us at various parts of our business model but not all three. As to the segment of our business which involves designing and/or constructing indoor CEA vertical farms, we believe competitors such as Excel Group and CityFarm Technologies Sdn Bhd compete with us in this segment but not services for the operation and management of vertical farms or in the area of selling fresh produce. Excel Group specializes in greenhouse construction and consulting services, including vertical indoor greenhouses. CityFarm provides vertical farming services, hydroponic solutions, as well as urban farm design and consultation for farm design services.

As to the segment of our business which involves services for the operation and management of CEA vertical farms, we do not believe we currently have direct competitors.

As to the segment of our business which involves selling fresh produce, the Company believes its competitors are Boom Grow, Cultiveat, Agroto, and Monoluxury. We do not believe these companies are competitors as to designing and/or constructing indoor CEA vertical farms or for the operation and management of CEA vertical farms.

The agricultural technology industry in Malaysia is becoming increasingly competitive with time. Primarily, we face competition from vertical farming startups, established agricultural companies, companies who deploy traditional produce gathering techniques, and technology companies.

Startups. Startups compete against more established players in the AgriTech industry due to their adaptability and ability to bring and implement new ideas and innovative approaches to the vertical farming industry. They often leverage technology advancements to develop new cultivation methods, automation systems, or data analytics tools and quickly adjust to market demands. Startups which we consider competitors include Boom Grow, Farmy, and Cultiveat.

Established agricultural companies. Established agricultural companies have the advantage of brand recognition, which gives them a competitive edge in either entering the vertical farming sector or expanding their existing operations. Larger agricultural companies may also benefit from economies of scale due to their size and resources. They can invest in large-scale vertical farming operations, allowing them to reduce production costs, optimize resource utilization, and achieve economies of scale in purchasing inputs. This cost advantage can make their products more competitive in terms of pricing. Additionally, established agricultural companies have years of experience navigating the agricultural industry, understanding market dynamics, and building networks with key stakeholders. This knowledge and network can facilitate market entry, collaboration, and access to distribution channels, providing a competitive advantage over startups that are still establishing their industry connections. Companies which we consider competitors in this category include Agroto and Monoluxury.

Corporate History and Structure

Agroz is an exempted company with limited liability incorporated under the laws of the Cayman Islands on August 8, 2023. Agroz’s operating subsidiary is Agroz Group, a Malaysian private limited company incorporated on November 20, 2020. Agroz Group is the owner of the intellectual property supporting Agroz’s technology and the operator of Agroz’s indoor vertical farms. Agroz Group also distributes and sells Agroz’s farm produce.

INTELLECTUAL PROPERTY

As of the date of this Report, our operating subsidiary owns the following intellectual property:

Intellectual Property  

Trademarks

As of the date of this Report, we have the following registered trademarks:

No.

Trademark

Country of   registration

Trademark number

Owner

Class

Application Status

1

Malaysia

TM2023037737

Agroz Group

44**

Registered

2

Malaysia

TM2023037736

Agroz Group

31*

Registered

As of the date of this Report, we have the following trademark applications pending with the Intellectual Property Corporation of Malaysia (“MyIPO”): ***

Copyrights

As of the date of this Report, we own the following copyrights. None of the following copyrights are currently registered.*

FACILITIES

We do not currently own any real property.

During the fiscal years ended December 31, 2025 and 2024, we leased the following properties to support our business activities and operations:

Through Agroz Group, we lease property at No. 2, Lorong Teknologi 3/4A, Taman Sains Selangor, Kota Damansara, 47810 Petaling Jaya, Selangor, Malaysia (the “Damansara Vertical Farm”). The lessor of the Damansara Vertical Farm is Child’s Partner (M) Sdn. Bhd.

Through Agroz Group, we lease property at Lot L2-MZ1, Jalan R1, Seksyen 1, Bandar Baru, Wangsa Maju, 53300 Kuala Lumpur, Malaysia (the “Alpha Angle Property”). The lessor of the Alpha Angle Property is Aeon Co. (M) Bhd.

EMPLOYEES

As of December 31, 2025, Agroz Inc. had 3 employees, all of whom are based in Malaysia. The areas of activity for these employees are operations (1), finance (1), and IT (1).

As of December 31, 2025, Agroz Group had 26 employees. The areas of activity for these employees are operations (19), finance (3), IT (1), and business development (3).

LEGAL PROCEEDINGS

On February 5, 2026, VCCL commenced a civil lawsuit against Agroz Group Sdn. Bhd. in High Court of Malaya at Shah Alam (Civil Suit No. BA-22NCVC-39-02/2026). V Capital Consulting Limited (“VCCL”) was previously engaged by Agroz Group Sdn. Bhd. to provide advisory services in connection with the proposed initial public offering on the Nasdaq Stock Market. VCCL alleges that an outstanding consulting fee of $903,213.86 remains due and payable, and claims said amount together with contractual interest and legal costs. Agroz Group Sdn. Bhd. vehemently disputes VCCL’s claims in their entirety and has filed a formal Counterclaim against VCCL and its representative, Hoo Voon Him (“HVH”), claiming $1,250,000.00, together with interest and costs, for damages resulting from alleged misrepresentations and failure to deliver contractual obligations in connection with the fundraising exercise for the proposed Nasdaq listing. As of December 31, 2025, the Company has accrued the full contractual consulting fee liability of $1,000,000 within other payables, with a corresponding deduction from additional paid-in capital. Based on the advice of external litigation counsel, the Company has a reasonable prospect of successfully resisting VCCL’s claim and succeeding in its counterclaim. Consequently, management has determined that no additional provision for damages, interest, or legal costs is required under IAS 37 as of December 31, 2025. In accordance with IAS 37, the Company’s counterclaim of USD 1,250,000 has not been recognized as an asset on the balance sheet. The parties are currently complying with pre-trial directions, with the next case management session and a hearing on the Company’s application for security for costs scheduled for November 19, 2026.

We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceedings, regardless of the outcome, is likely to result in substantial costs and diversion of our resources, including our management’s time and attention.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this Report. This Report contains forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3 Key Information — D. Risk Factors” in this Report. We caution you that our businesses and financial performance are subject to substantial risks, changes and uncertainties. 

As used in Item 5 section, the term “the Group” refers to Agroz Inc. and Agroz Group., collectively. “Agroz Group” refers solely to Agroz Group Sdn. Bhd., a Malaysian private limited company, our operating subsidiary.

OVERVIEW

We are a vertically integrated agricultural technology company applying technology solutions, innovative business models, processes, and systems to design, build, manage, and operate indoor CEA vertical farms. We also operate CEA vertical farms which produce clean, pesticide free, fresh and nutritious rich vegetables directly to consumers and businesses. Our EduFarm at AEON Alpha Angle was also aimed to educate the public on how our vegetables are grown. Our CEA practices are a combination of various digital technologies, including IoT, data analytics, artificial learning, machine learning, automation, cloud and edge computing, and 5G communications. We use 5G communications primarily to enhance internet connectivity within our CEA practices, which is essential for real-time monitoring and control of our agricultural operations.

Our mission is to improve food safety, food security, and sustainability for society by creating a reliable, accessible food supply through our agricultural technology (“AgTech”) products and services. We believe we are revolutionizing and transforming agricultural production through our CEA technology and methods. We believe our technology enables us to grow more food in less space safely without the use of pesticides, herbicides and other dangerous chemicals, while reducing the need for storage and refrigeration. We aim to improve food security and deliver freshness by growing food locally, nearer to where it is consumed, which reduces transportation and therefore lowers the food miles generated and our carbon emissions impact, leading to more environmentally friendly outcomes for food production.

We believe there is vast market potential for the AgTech and CEA vertical farming markets globally and in the Southeast Asian region. Starting with Malaysia, we aim to match the top-grade products we have available to the markets in which they are the most highly demanded.

Principal activities

We primarily derive our revenue from:

Our goal is to create efficient, sustainable, and environmentally controlled vertical farms which maximize crop yield and crop quality and allow for precise management of temperature, humidity, light and nutrients.

We design and/or construct indoor CEA vertical farms for our clients according to their specific needs. This involves planning each CEA vertical farm’s layout, designing its infrastructure, building the farm’s structural framework, setting up equipment, and implementing the Agroz OS within the farm. The Agroz OS, at its most current stage of development, integrates certain hardware and software solutions detailed below. Through Agroz OS, we aim to improve productivity, boost yield, and improve the quality of produce generated within CEA vertical farms.

Agroz OS is currently comprised of digitally automated hardware systems capable of: (i) managing various environmental conditions within the CEA vertical farms and water quality and volume, (ii) providing irrigation and nutrient fertigation; (iii) providing light to crops; (iv) managing energy use; and (v) collecting data to enable management of temperature and lighting within the farms, as well as nutrient provision, irrigation and fertigation.

As of the date of this Form 6-K, we have implemented in Agroz OS the above digitally automated hardware systems. We have also integrated in Agroz OS software solutions enabling email and communication systems for farm organization. Agroz OS also includes Agroz ERP, a software system that tracks every aspect of the vertical farm’s business activities, including: (1) farm input materials (i.e., seeds, nutrients, growth media, packaging, consumables, carbon dioxide); (2) growth of produce at different stages; (3) farm personnel activity; (4) harvest inventory; (5) sales orders, invoices, and deliveries, and (6) accounting records. Agroz ERP is also accessible as a mobile application. These software solutions are supported by Microsoft Azure and Microsoft AI, which solutions are possible pursuant to being Microsoft ISV and Microsoft AI Cloud Partner under the Microsoft Publisher Agreement and Microsoft AI Cloud Partner Program Agreement filed herein as Exhibits 10.5 and 10.6, respectively.

We have integrated an AI agent system into Agroz OS, which system is supported by Microsoft AI and capable of presenting complex agricultural decisions to farm managers and farm owners and autonomously executing such decisions after human approval is received. The AI system’s agents can undertake complex multi-step autonomous actions within vertical farms and result in vertical farms which can be independently and automatically operated. Investors should be aware that such AI agent system is distinct from the Agroz Copilot; by contrast, Agroz Copilot is a GenAI application separate from Agroz OS, which enables human farmers to input queries and instructions into an application to receive recommendations for assistance with daily tasks, not a system for autonomous functioning of vertical farms.

Agroz OS additionally includes Intuit QuickBooks to aid in financial reporting and bookkeeping, with such accounting software stored on cloud servers and financial information protected by encryption technology and firewall.

Following the successful design and/or construction of CEA vertical farms, our clients may also receive, at their option, farm operation and management services. The services we offer in this respect include the overseeing of day-to-day CEA vertical farm operations and performing regular maintenance of our clients’ CEA vertical farm systems, using all of the intellectual property we have developed, including Agroz OS and the standard operating procedure supporting CEA vertical farm operations. We began generating revenue from the operation and management services for our clients’ CEA vertical farms in fiscal year 2024.

Currently, the CEA vertical farms we operate and manage include: (i) a 10,021 square foot indoor vertical farm in Kota Damansara and (ii) a 5,239 square foot educational vertical farm (“EduFarm”) at the AEON Mall Alpha Angle, a shopping center in Wangsa Maju, Kuala Lumpur, Malaysia (“AEON Alpha Angle”). The Malaysia Book of Records, a publication of record setting achievements, recognizes the vertical farm we operate and manage at AEON Alpha Angle as the largest indoor vertical farm located inside a shopping mall in Malaysia. Additionally, in June of 2024, the Malaysian government, through the Ministry of Agriculture and Food Security, recognized the EduFarm for meeting Malaysian Good Agricultural Practices (“myGAP.PF”) requirements in being pesticide free. MyGAP.PF is a certification scheme recognizing farms which adopt agricultural practices with an environmentally friendly concept, safeguarding the welfare and safety of workers and do not use synthetic pesticides to produce quality, safe and edible products. This certification covers 20 types of vegetables grown in the CEA vertical farms we manage and operate, including green butterhead, red butterhead, green coral, red coral, wild rocket, green kale, and arugula, to name a few.

Through the EduFarm, we also supply fresh produce sold at AEON Alpha Angle and at certain supermarkets operated by AEON Co. (M) Berhad (“AEON”). 

We sell CEA vertical farms to potential buyers separate from the services that comprise the first and second revenue streams identified in the “Principal activities” subsection above. Our completed CEA vertical farms are fully operational and optimized. Each CEA vertical farm includes Agroz OS. We aim to achieve high-yield crop production and resource management through the CEA vertical farms.

We also generate revenue from sales of fresh produce, which produce consist of (i) produce grown in the leased CEA vertical farms we operate and (ii) produce outsourced from our clients’ CEA vertical farms and other suppliers. To date, we have successfully grown 50 different crops and are currently offering 21 varieties of crops for sale. Our key distribution avenue is the direct distribution of fresh produce to Malaysian-based wholesale distributors, and large supermarket brand retailers, such as AEON, and recently we have expanded our distribution to Village Grocer.

RESULTS OF OPERATIONS 

Our financial statements contain translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. The conversion of Malaysian Ringgit into U.S. dollars in the financial statements is based on the exchange rates set forth in the statistical release of The Federal Reserve, the central bank of the United States. Unless otherwise noted, all translations from Malaysian Ringgit to U.S. dollars and from U.S. dollars to Malaysian Ringgit for the fiscal year ending on December 31, 2025 (the “2025 Fiscal Year”) were made at the noon buying rate of USD 1.00 = MYR 4.0560 on December 31, 2025, as published in the H.10 statistical release of the United States Federal Reserve Board).

Revenue

Revenue generated from our operations for the 2025 Fiscal Year and 2024 Fiscal Year was MYR 73,130,666 ($18,030,243) and MYR 40,860,882, respectively, representing an increase of MYR 32,269,784, or approximately 79.0%. Our revenue is primarily derived from offering CEA vertical farm solutions to clients and the sale of fresh produce cultivated from our CEA vertical farms. During the 2025 Fiscal Year, all revenue was generated from independent third parties, as revenue from related parties decreased from MYR 1,433,016 in the 2024 Fiscal Year to Nil in the 2025 Fiscal Year.

Revenue from offering farm solutions increased by MYR 3,573,376, or 17.2%, from MYR 20,834,674 in the 2024 Fiscal Year to MYR 24,408,050 ($6,017,764) in the 2025 Fiscal Year. In the 2024 Fiscal Year, farm solutions revenue comprised design services of MYR 17,434,500, construction services of MYR 3,400,000, and management fees of MYR 174. In the 2025 Fiscal Year, farm solutions revenue was derived entirely from construction services of MYR 24,408,050 ($6,017,764), representing an increase of MYR 21,008,050 from construction services in the 2024 Fiscal Year. Approximately 93.6% of construction service revenue (MYR 22,845,935, representing 31.2% of total revenue was derived from a recurring customer (Customer A, Note 17(c)), with the quotation provided in May 2025, the letter of award received in August 2025, and construction services completed in December 2025 with revenue recognized in the same fiscal year. This was a one-off project and future construction service revenue will depend on market opportunities, technical capabilities, and contract negotiations.

Revenue from the sale of fresh produce increased by MYR 28,696,408, or 143.3%, from MYR 20,026,208 in the 2024 Fiscal Year to MYR 48,722,616 ($12,012,479) in the 2025 Fiscal Year. This increase was due to the increased sales volume of vegetables to wholesale customers in the 2025 Fiscal Year. There was no material change in the baseline selling price of fresh produce compared to the 2024 Fiscal Year; however, we expanded the variety of fresh produce sold, including premium produce varieties that command higher unit selling prices. Fresh produce was sourced from third-party suppliers as well as related party contract farms (Agroz Vertical Farms Sdn. Bhd. and Agroz Ventures Sdn. Bhd., Note 21). The increase in 2025 Fiscal Year sales was driven by higher order volumes from both existing and newly acquired commercial customers. Per Note 17(c), sales of fresh produce in the 2025 Fiscal Year exhibited significant customer concentration, with Customer A contributing 27.6% of total revenue, Customer I contributing 22.5%, and Customer G contributing 12.9%. Customer A represented an aggregate of 58.8% of our total revenue across both construction services (31.2%) and fresh produce sales (27.6%) in the 2025 Fiscal Year. Future vegetable sales will depend on market demand, production yields, supply chain stability, and prevailing macroeconomic conditions.

Revenue generated from our operations for the 2024 Fiscal Year and 2023 Fiscal Year was MYR 40,860,882 and MYR 18,471,272 respectively. Our revenue is primarily derived from offering CEA vertical farm solutions to clients, especially for design service. Revenue generated for the 2024 Fiscal Year was MYR 40,860,882, representing an increase of 121.2% from revenue in the 2023 Fiscal Year. This increase in revenue was due to providing design services, which increased from MYR 8,412,500 to MYR 17,434,500. The entire amount of design service revenue was derived from a new customer, with the quotation requested in July 2024 and the letter of award received in September 2024. The design service was completed in December 2024, and the revenue was recognized in the same fiscal year. This was a one-off transaction and any future design service revenue will depend on the availability of opportunities, expertise, and successful negotiations. Vegetable sales for the 2024 Fiscal Year increased from MYR 2,058,772 to MYR 20,026,208, representing an increase of MYR 17,967,436. This increase was due to the increased sales of vegetables to wholesale customers in the 2024 Fiscal Year. In the 2024 Fiscal Year, 64.8% of vegetable sales were recorded in last quarter (Q4), with 58.4% of sales in Q4 of 2024 contributed by new customers. There was no change in the selling price of fresh produce compared to other fiscal quarters in 2024. However, we expanded the variety of fresh produce, including items that command higher prices. Vegetables were sourced from both third-party suppliers and related parties. The increase in Q4 2024 sales was driven by an increase in orders from existing and new customers. Future vegetable sales will depend on market demand, which is influenced by factors such as weather conditions, natural disasters, and broader economic trends.

Costs of revenue

Our costs of revenue include costs incurred directly from CEA vertical farm construction, employee wages and benefits, depreciation and amortization of software, farms and machinery, consulting fees and vegetable costs, as well as costs related to CEA vertical farm operations, such as seed and fertilizer expenses, utilities and packaging fees. Total costs of revenue increased by MYR 25,200,167, or 96.8%, from MYR 26,045,710 in the 2024 Fiscal Year to MYR 51,245,877 ($12,634,585) in the 2025 Fiscal Year. For the 2025 Fiscal Year, the total costs of revenue comprised primarily MYR 12,498,750 ($3,081,546) in construction costs and MYR 37,984,989 ($9,365,135) in vegetable costs, alongside depreciation and amortization of MYR 458,730 ($113,099), planting related costs of MYR 226,003 ($55,721), and wages and benefits of MYR 77,405 ($19,084).

Construction costs increased significantly from MYR 2,170,000 in the 2024 Fiscal Year to MYR 12,498,750 ($3,081,546) in the 2025 Fiscal Year to execute and deliver the large-scale construction service project for Customer A, which required extensive engagement of external contractors and engineering specialists. Gross profit margin for offering farm solutions decreased from 57.6% in the 2024 Fiscal Year (reflecting high-margin design services) to 48.8% in the 2025 Fiscal Year, as the 2025 revenue consisted entirely of construction services which carry relatively lower margins than design consultancy.

Vegetable costs increased by MYR 21,146,430, or 125.6%, from MYR 16,838,559 in the 2024 Fiscal Year to MYR 37,984,989 ($9,365,135) in the 2025 Fiscal Year, directly driven by higher procurement volumes of fresh produce to fulfill expanding commercial wholesale orders. Direct gross profit margin for fresh produce sales (calculated as fresh produce revenue less direct vegetable costs) improved from 15.9% (or 14.1% after allocating planting related costs, depreciation, and farm labor) in the 2024 Fiscal Year to 22.0% (or 20.5% comprehensively) in the 2025 Fiscal Year, primarily reflecting economies of scale in procurement and the introduction of higher-margin produce varieties.

Our overall gross profit increased by MYR 7,069,617, or 47.7%, from MYR 14,815,172 in the 2024 Fiscal Year to MYR 21,884,789 ($5,395,658) in the 2025 Fiscal Year. However, overall gross profit margin decreased from 36.3% in the 2024 Fiscal Year to 29.9% in the 2025 Fiscal Year. This margin reduction was primarily attributable to: (i) a strategic shift in revenue mix, where lower-margin fresh produce sales expanded from 49.0% of total revenue in the 2024 Fiscal Year to 66.6% in the 2025 Fiscal Year; and (ii) the decrease in farm solutions margin from 57.6% to 48.8% due to the transition from design services to construction execution.

Our costs of revenue increased from MYR 10,207,774 in the 2023 Fiscal Year to MYR 26,045,710 in the 2024 Fiscal Year. For the 2024 Fiscal Year, the total costs of revenue comprising MYR 6,667,000 in consulting fees and MYR 16,838,559 in vegetable costs. Higher consulting fees in the 2024 Fiscal Year to complete a design service project for a customer, which required the engagement of external experts. Despite the increase in consulting fees, the gross profit margin for farm solutions improved from 48.9% in 2023 Fiscal Year to 57.6% in 2024 Fiscal Year. Vegetable costs rose significantly, from MYR 934,681 in the 2023 Fiscal Year to MYR 16,838,559 in the 2024 Fiscal Year. The reason for this increase was due to additional purchases of fresh produce incurred in to fulfill orders from new and existing customers for the sales of fresh produce during the 2024 Fiscal Year. Although vegetable costs increased, the gross profit margin for sales of fresh produce improved from 10.8% in 2023 Fiscal Year to 14.1% in 2024 Fiscal Year. However, the total gross profit margin declined from 44.7% in 2023 Fiscal Year to 36.3% in 2024 Fiscal Year, which was primarily due to the increase in sales of fresh produce that had a dilutive effect of the overall gross profit margin. The proportion of revenue from fresh produce, which yields a lower margin compared to farm solutions, increased from 11.2% in 2023 Fiscal Year to 49.0% in 2024 Fiscal Year.

Selling and promotion expenses  

The following table sets forth a breakdown of our selling and promotion expenses for the fiscal years indicated:

The Group’s selling and promotion expenses are derived from marketing fees and entertainment. We incurred marketing and advertising expenses on popular media platforms, with the intention of boosting our media presence and brand awareness and generating more visitors (and potentially customers) to our website.

Selling and promotion expenses increased by MYR 1,700,847, or 815.3%, from MYR 208,618 in the 2024 Fiscal Year to MYR 1,909,465 ($470,775) in the 2025 Fiscal Year. Marketing fees for the 2025 Fiscal Year were MYR 1,909,465 ($470,775), compared to MYR 186,043 in the 2024 Fiscal Year, representing an increase of MYR 1,723,422. This substantial increase was consistent with our aggressive commercial expansion and branding campaigns to support the 143.3% growth in fresh produce sales, increase retail and wholesale brand equity, and expand market penetration across Malaysia.

Marketing fees for the 2024 Fiscal Year MYR 186,043 were significantly lower than marketing expenses for the 2023 Fiscal Year MYR 381,224, due to the Group’s one-off engagement of an agency to develop the Group’s marketing solutions in the 2023 Fiscal Year to build brand awareness but does not recur in 2024 Fiscal Year.

General and administrative expenses

The following table sets forth a breakdown of our administrative expenses for the fiscal years indicated:

Director fee

During the 2025 and 2024 Fiscal Years, Gerard Kim Meng Lim, the director of Agroz, who is also one of its shareholders, was entitled to an annual director’s fee of MYR 1,300,000 ($350,513) and MYR 1,000,000, respectively for his services to Agroz.

During the 2024 and 2023 Fiscal Years, Gerard Kim Meng Lim, the director of Agroz, who is also one of its shareholders, was entitled to an annual director’s fee of MYR 1,000,000 and MYR 120,000, respectively for his services to Agroz. During the 2023 Fiscal Year, Mr. Lim waived payment for this director’s fee and was accordingly treated as a contribution by a shareholder.

Professional fees

Our legal and professional fees decreased by MYR 996,762, or 33.7%, from MYR 2,955,710 in the 2024 Fiscal Year to MYR 1,958,948 ($482,975) in the 2025 Fiscal Year. This decrease was primarily due to the completion of the Company’s initial public offering in October 2025, with eligible share issuance expenses of MYR 5,791,292 capitalized against additional paid-in capital in shareholders’ equity rather than expensed through profit or loss.

Our legal and professional fees for the 2023 Fiscal Year totaled MYR 503,556, which increased to MYR 2,955,710 in the 2024 Fiscal Year. This increase is mainly attributed to audit fees and other professional fees in preparation for our prospective IPO incurred in the 2024 Fiscal Year.

Wages and benefits

Wages and benefits mainly included staff salaries, Employees Provident Fund, Social Security Organization, Employment Insurance System and allowances. Wages and benefits in general and administrative expenses increased by MYR 679,200, or 60.2%, from MYR 1,128,559 in the 2024 Fiscal Year to MYR 1,807,759 ($445,700) in the 2025 Fiscal Year, primarily due to expanding our administrative and operational headcount from 14 staff in 2024 to 26 staff in the 2025 Fiscal Year

Wages and benefits increased by MYR 812,797 from MYR 315,762 in the 2023 Fiscal Year to MYR 1,128,559 in the 2024 Fiscal Year due to our recruitment of new staff increase from 9 staffs to 14 staffs in the 2024 Fiscal Year.

Depreciation and amortization

Depreciation and amortization charges included in general and administrative expenses increased by MYR 75,680, or 13.0%, from MYR 583,049 in the 2024 Fiscal Year to MYR 658,729 ($162,409) in the 2025 Fiscal Year. These charges mainly comprise depreciation on property, plant and equipment (computer equipment, motor vehicles, renovation) and amortization of intangible assets (ERP software and websites), alongside depreciation of right-of-use office assets. The increase was primarily driven by the full-year amortization of capitalized software and depreciation of motor vehicles acquired and financed via bank borrowings during the year.

Depreciation and amortization charges for the 2024 Fiscal Year in general and administrative expenses amounted to MYR 583,049. These charges mainly include depreciation charges on Agroz Group’s fixed assets, such as furniture and fittings, fire system, computer and equipment, motor vehicles, computer software, websites and renovation. For the 2024 Fiscal Year, our depreciation and amortization charges were MYR 583,049, representing an increase of MYR 308,504 from the 2023 Fiscal Year. This significant increase was due to the Group’s newly leased office premises for operation.

Office expenses

Office expenses increased by MYR 269,472, or 98.1%, from MYR 274,610 in the 2024 Fiscal Year to MYR 544,082 ($134,142) in the 2025 Fiscal Year. This increase was mainly attributed to higher administrative expenses, utility costs, investor relations expenses, and operational overhead associated with supporting a larger corporate structure following our public listing.

Penalties

Penalties recognized within general and administrative expenses for the 2025 Fiscal Year totaled MYR 25,701 ($6,337) (2024: Nil), arising from penalties imposed by lessors for the late payments.

Other income

Total other income increased by MYR 45,915, or 26.5%, from MYR 173,293 in the 2024 Fiscal Year to MYR 219,208 ($54,045) in the 2025 Fiscal Year. This increase was primarily attributable to increase in sundry other income to MYR 301,987 ($74,454) and a reduction in net foreign exchange losses from MYR 121,774 in 2024 to MYR 82,786 ($20,411) in 2025, partially offset by a decrease in bank interest income to MYR 7 ($2).

Expected credit losses on trade receivables

The following table sets forth a breakdown of our expected credit losses (“ECL”) on trade receivables for the years indicated:

Loss allowances for trade receivables are always measured in an amount equal to lifetime ECLs. ECLs on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors and an assessment of both the current and forecast general economic conditions at the reporting date. ECL for trade receivables decreased by MYR 374,289, or 56.6%, from MYR 661,263 in the 2024 Fiscal Year to MYR 286,974 ($70,753) in the 2025 Fiscal Year. This net decrease was primarily driven by a reversal of allowances of MYR 412,828 ($101,782) on related party receivables following the full settlement of all related party trade receivables in the 2025 Fiscal Year. This reversal was partially offset by an increase in loss allowances on third-party industrial business customers of MYR 700,718 ($172,761) (compared to increase of MYR 286,939 in the 2024 Fiscal Year), reflecting the substantial growth in gross receivables from industrial customers and an increase in receivables aged over six months.

For the 2023 Fiscal Year, ECL for trade receivables amounted to MYR 66,915. ECL for trade receivables increased to MYR 661,263 ($147,950) in the 2024 Fiscal Year due to the increase in trade receivables’ credit risk.

Finance costs

The following table sets forth a breakdown of our financial expenses for the years indicated:

Our finance costs include bank charges and interest charges.

Finance costs decreased by MYR 573,704, or 34.3%, from MYR 1,673,335 in the 2024 Fiscal Year to MYR 1,099,631 ($271,111) in the 2025 Fiscal Year. This decrease was primarily attributable to a reduction in interest on RCPS of MYR 555,362, from MYR 1,384,065 in 2024 to MYR 828,703 ($204,314) in the 2025 Fiscal Year, resulting from the conversion of 180,000 AI RCPS into ordinary shares, redemption of 40,000 AI RCPS, and maturity of certain subscriptions. In addition, interest on the related party loan from HWG Cash decreased from MYR 27,260 in 2024 to MYR 22,717 ($5,601) in the 2025 Fiscal Year as the loan principal was fully repaid on October 30, 2025 (Notes 10(a) and 20). Lease interest decreased slightly to MYR 231,431 ($57,059), while interest on bank borrowings increased to MYR 9,424 ($2,323) following additional bank borrowings incurred in late 2025 Fiscal Year.

For the 2023 Fiscal Year, our finance costs amounted to MYR 505,826, mainly attributable to the interest paid to RCPS holders of MYR 360,407. Finance costs increased from MYR 505,826 for the 2023 Fiscal Year to MYR 1,673,335 for the 2024 Fiscal Year. This significant increase was due to an increase in shareholder subscriptions for RCPS.

Loss on redeemable convertible preference share redemption

For the 2023 Fiscal Year, 3,000,000 shares of Agroz Group RCPS (“AG RCPS”) were fully redeemed along with the related unpaid interests by issuing 336,366 shares of Agroz Inc. RCPS (“AI RCPS”) which had a fair value MYR 3,882,500. On December 1, 2023, the redemption date of the AG RCPS, the net book value of AG RCPS along with the related unpaid dividends was MYR 3,177,600. The loss arising from the redemption of the RCPS redemption amounted to MYR 704,900 was incurred from the difference between fair value of the AI RCPS and the net book value of AG RCPS in the 2023 Fiscal Year. No such loss was incurred in the 2024 or 2025 Fiscal Years.

Income tax expenses - Malaysia profits tax

For the 2025 Fiscal Year, 2024 Fiscal Year and the 2023 Fiscal Year, the tax rate is 24% for companies incorporated in Malaysia with paid-in capital of MYR 2.5 million or more. The Company is subject to income taxes on entities based on profit arising in or derived from the jurisdiction in which the Company and its subsidiaries are domiciled or operate in.

Total income tax expenses increased by MYR 2,574,133, or 90.8%, from MYR 2,833,617 in the 2024 Fiscal Year to MYR 5,407,750 ($1,333,272) in the 2025 Fiscal Year. For the 2025 Fiscal Year, Agroz Group incurred current income tax expenses of MYR 3,960,142 ($976,366) and under-provision of taxes in prior years of MYR 1,468,846 ($362,142), offset by deferred tax credit of MYR 21,238 ($5,236).

For the 2024 Fiscal Year and the 2023 Fiscal Year, the tax rate is 24% for companies incorporated in Malaysia with paid-in capital of MYR 2.5 million or more. The Company is subject to income taxes on entities based on profit arising in or derived from the jurisdiction in which the Company and its subsidiaries are domiciled or operate in.

For the 2024 Fiscal Year, Agroz Group incur current income tax expenses amounted to MYR 2,637,694 and under provision of tax MYR 225,946 in prior years. There is a recognition of deferred tax asset amounting to MYR 30,023 in 2024 Fiscal Year. For the 2023 Fiscal Year, Agroz Group’s income tax expenses amounted to MYR 1,355,882.  

LIQUIDITY AND CAPITAL RESOURCES 

The following table sets forth our current assets, non-current assets, current liabilities, non-current liabilities and equity as of the dates indicated:

Trade receivables

Aging analysis of gross trade receivables, based on tax invoice dates, as of December 31, 2024 and 2025 are as follows:

Our trade receivables encompass amounts owed to us for offering CEA vertical farm solutions and selling fresh produce. All of our trade receivables are expected to be recovered within one year. We invoice our clients on a milestone basis following our service agreement or upon completion of transactions. Our trade receivable balance increased by MYR 31,975,411, or 88.0%, from MYR 36,316,854 as of December 31, 2024 to MYR 68,292,265 ($16,837,344) as of December 31, 2025. This increase was mainly due to higher outstanding balances from third parties for offering farm solutions of MYR 23,039,775 ($5,680,418) and fresh vegetable sales of MYR 46,283,324 ($11,411,076), whereas related party trade receivables of MYR 1,132,841 at December 31, 2024 were fully collected and settled during the 2025 Fiscal Year.

Importantly, our trade receivables aging profile experienced significant elongation: receivables aged more than 6 months but within 1 year increased from MYR 2,470,419 (6.7% of gross receivables) as of December 31, 2024 to MYR 26,409,471 ($6,511,211), or 38.1% of total gross receivables, as of December 31, 2025. Furthermore, per Note 14(a)(i), the Group has extreme customer credit concentration, with 99.78% (2024: 95.92%) of total gross trade receivables due from our five largest customers as of December 31, 2025. As of December 31, 2025, more than 92% of outstanding trade receivables as of the 2024 Fiscal Year-end had been collected. As of September 28, 2026, approximately 74% of outstanding trade receivables as of December 31, 2025 had been collected.

In determining the recoverability of a trade receivable, we consider any changes in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. Cumulative ECL allowance increased from MYR 743,860 as of December 31, 2024 to MYR 1,030,834 ($254,150) as of December 31, 2025, reflecting higher provisioning on third-party industrial customers commensurate with extended receivable aging. Management continues to monitor credit quality and believes the recognized provision is adequate.

Prepayments, deposits and other receivables

Total prepayments, deposits and other receivables increased by MYR 4,555,213, or 63.0%, from MYR 7,232,572 as of December 31, 2024 to MYR 11,787,785 ($2,906,258) as of December 31, 2025. This increase was primarily driven by prepayments for e-commerce website design, Enterprise Resource Planning (ERP) system and Robotic AI Platform, which grew from MYR 6,923,814 to MYR 11,458,527 ($2,825,081). Specifically, advance payments to Braiven Co., Ltd., a related party, for the development of a comprehensive Robotics AI Platform increased from MYR 5,517,306 to MYR 9,566,537 ($2,358,614), while prepayments to third-party vendors for e-commerce website design, ERP system and Robotic AI increased from MYR 1,406,508 to MYR 1,891,990 ($466,467). Rental and utility deposits remained unchanged at MYR 277,843 ($68,501), and current other receivables increased slightly to MYR 51,415 ($12,676).

Trade and other payables

Note:

All trade and other payables classified as current are expected to be settled within one year or are repayable on demand. Our trade payables increased by MYR 6,204,025, or 44.0%, from MYR 14,089,238 as of December 31, 2024 to MYR 20,293,263 ($5,003,269) as of December 31, 2025. This increase was mainly due to outstanding balances owed to construction service contractors of MYR 13,801,580 ($3,402,756) and vegetable suppliers of MYR 6,354,456 ($1,566,680), which remained undue as of December 31, 2025. Payables to construction contractors and vegetable suppliers represented approximately 68.0% and 31.3% of total trade payables, respectively. In terms of aging, 87.9% of trade payables were aged within 3 months, while payables aged over 1 year increased from MYR 56,278 to MYR 1,382,836 ($340,936).

Other payables

Other payables and accruals consisted of accrued operating expenses and sundry payables. Other payables and accruals increased by MYR 4,397,018, or 239.9%, from MYR 1,832,975 as of December 31, 2024 to MYR 6,229,993 ($1,535,994) as of December 31, 2025. This substantial increase was primarily due to the accrual of the full contractual consulting fee liability of MYR 4,057,000 ($1,000,247) owed to V Capital Consulting Limited (“VCCL”) in connection with IPO advisory services, which is currently the subject of ongoing litigation as disclosed in Note 23(b) (with a corresponding deduction from additional paid-in capital). Wages payable decreased from MYR 200,235 in the 2024 Fiscal Year to MYR 21,529 ($5,308) in the 2025 Fiscal Year, mainly due to the advance payments made for salary and tax to Inland Revenue Board which resulting in an offsetting impact on the outstanding balance. Interest payable of RCPS decreased from MYR 1,072,266 in the 2024 Fiscal Year to MYR 530,365 ($130,761) in the 2025 Fiscal Year due to payment of RCPS interest in the 2025 Fiscal Year.

Going concern

Our primary source of liquidity has been operational sources of cash, financing from third-party investors, related parties and a bank loan. As of December 31, 2024, we had cash balance amounted to MYR 390,500. As of December 31, 2024, the Group recognized a liability of MYR 9,590,370 in respect of redeemable convertible preference shares, where the shareholders have the rights to request the Company to redeem all of the redeemable convertible preference shares upon maturity date. The aggregate redemption amount for all redeemable preference shares by December 31, 2024 is MYR 10,055,481.

For the 2025 Fiscal Year, we incurred negative operating cash flows of MYR 6,284,550 ($1,549,445). As of December 31, 2025, the Group had cash of MYR 1,478,091 ($364,421). In addition, as of December 31, 2025, we had current liabilities in respect of redeemable convertible preference shares of MYR 6,583,486 ($1,623,147), where holders possess mandatory redemption rights within one year upon maturity, amounts due to related parties of MYR 6,056,741 ($1,493,279), total bank borrowings of MYR 841,815 ($207,548) (of which MYR 95,008 ($23,424) is due within one year). Furthermore, as of December 31, 2025, we had significant remaining contractual capital commitments of MYR 11,995,191 ($2,957,394), primarily arising from executed purchase contracts for E-commerce website design, system integration, and software and AI platform development signed with technology vendors (including third-party suppliers and Braiven Co., Ltd., a related party).

In light of the foregoing circumstances, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year from the date that our consolidated financial statements for the 2025 Fiscal Year were issued. To meet the cash requirements for the next 12 months from the issuance date of the audit report, we plan to undertake a combination of below remediation plans:

There can be no assurance that we will be successful in achieving our strategic plan, that our future capital raises will be sufficient to support our ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If we are unable to raise sufficient financing or events or circumstances occur such that we do not meet our strategic plans, it would have a material adverse effect on our financial position results of operations cash flows and ability to achieve our intended business objectives. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

CASH FLOWS STATEMENTS

The following table sets forth a summary of our cash flows for the year indicated.

Operating activities

For the 2025 Fiscal Year, net cash used in operating activities was MYR 6,284,550 ($1,549,445), which primarily reflected our profit before taxation of MYR 11,990,753 ($2,956,301), adjusted for non-cash items including: (i) finance costs of MYR 1,092,275 ($269,297), (ii) aggregate depreciation and amortization of MYR 1,117,459 ($275,508) (comprising depreciation of property, plant and equipment of MYR 136,963 ($33,768), depreciation of right-of-use assets of MYR 509,448 ($125,604), and amortization of intangible assets of MYR 471,048 ($116,136), (iii) credit loss provision on trade receivables of MYR 286,974 ($70,753), and (iv) gain on RCPS modification of MYR 37,092 ($9,145); and further adjusted for working capital changes including: (v) an increase in trade receivables of MYR 32,262,385 ($7,954,237), (vi) an increase in trade payables of MYR 6,204,025 ($1,529,592), (vii) an increase in other payables of MYR 3,825,975 ($943,288), (viii) a decrease in prepayments, deposits and other receivables of MYR 1,718,490 ($423,691), (ix) an increase in amounts due from related parties of MYR 738,690 ($182,123), (x) an increase in amounts due to related parties of MYR 588,883 ($145,188), and (xi) income tax paid of MYR 71,217 ($17,558).

For the 2024 Fiscal Year, net cash generated from operating activities was MYR 941,271, which primarily reflected our net income of MYR 6,345,785, as adjusted for (i) design service provided to a new customer and yet to be collected which amounted to MYR 17,434,500, (ii) sales of fresh produce to two new customers and yet to be collected which amounted to MYR 11,687,976, (iii) increase in trade payables which amounted to MYR 11,791,451, and (iv) increase in finance cost which amounted to MYR 1,668,770.

For the 2023 Fiscal Year, net cash used in operating activities was MYR 3,409,287, which primarily reflected our net income of MYR 5,110,267, as adjusted for (i) CEA vertical farm design services provided and yet to be collected which amounted to MYR 8,412,500, (ii) sales of CEA vertical farms and yet to be collected which amounted to MYR 4,000,000, (iii) decrease in development costs which amounted to MYR 2,151,248, and (iv) increase in trade payables which amounted to MYR 1,779,550.

Investing activities

For the 2025 Fiscal Year, net cash used in investing activities was MYR 5,577,937 ($1,375,231), consisting of: (i) payments for purchases of property, plant and equipment of MYR 1,043,134 ($257,183), primarily for motor vehicles and computer hardware; and (ii) payments for purchases of intangible assets totaling MYR 4,534,803 ($1,118,048), comprising payments to a related party (Braiven Co., Ltd.) of MYR 4,049,321 ($998,353) and payments to a third party of MYR 485,482 ($119,695) for ERP development.

For the 2024 Fiscal Year, net cash used in investing activities was MYR 6,820,628, primarily consisting of purchase of intangible assets, including investments into the development of the AI software platform, the e-commerce website, and the Agroz ERP system, all of which are anticipated to be integrated into the Agroz OS at a later stage, amounting to MYR 6,723,078.

For the 2023 Fiscal Year, net cash used in investing activities was MYR 2,628,150, which primarily consisting of purchase of intangible assets, including investments into the development of the AI software platform, the e-commerce website, and the Agroz ERP system, all of which are anticipated to be integrated into the Agroz OS at a later stage, amounting to MYR 1,706,670.

Financing activities

For the 2025 Fiscal Year, net cash generated from financing activities was MYR 12,687,796 ($3,128,155), primarily consisting of: (i) gross proceeds from the issuance of ordinary shares upon IPO of MYR 12,478,247 ($3,076,491), (ii) advances received from related parties of MYR 3,443,291 ($848,938), and (iii) proceeds from secured bank borrowings of MYR 808,000 ($199,211); partially offset by: (iv) repayment of a shareholder’s loan of MYR 2,000,000 ($493,097), (v) total lease liability payments of MYR 629,137 ($155,113) (comprising principal payments of MYR 397,706 ($98,054) and interest payments of MYR 231,431 ($57,059)), (vi) cash interest paid on RCPS of MYR 978,267 ($241,190), (vii) cash redemption of AI RCPS of MYR 405,700 ($100,025), and (viii) total bank borrowings payments of MYR 28,638 ($7,060) (comprising principal payments of MYR 19,214 ($4,737) and interest payments of MYR 9,424 ($2,323).

For the 2024 Fiscal Year, net cash generated from financing activities was MYR 6,332,084, primarily consisting of proceeds from the issuance of AI RCPS totaling MYR 7,989,890 and payment of IPO related costs in the amount of MYR 621,400.

For the 2023 Fiscal Year, net cash generated from financing activities was MYR 6,072,688, primarily consisting of proceeds from the issuance of AI RCPS totaling MYR 3,609,483, proceeds from a related party’s loan in the amount of MYR 1,363,000, cash advances received from a related party in the amount of MYR 1,042,409, proceeds from the issuance of Agroz Group’s ordinary shares in the amount of MYR 820,000, advances received for AI RCPS totaling MYR 918,274 and payment of IPO related costs in the amount of MYR 1,147,842.

Capital expenditures

Our capital expenditure mainly arise from contracted purchase of property, plant and equipment and intangible assets. Our contractual capital expenditures commitment amounted to MYR 11,995,191 ($2,957,394) and MYR 13,313,961 in the 2025 and 2024 Fiscal Year. The capital expenditure mainly arising from certain purchase contracts of IT software such as E-commerce website design and Enterprise Resource Planning (ERP) system signed with suppliers and the developments of comprehensive Robotics AI Platform designed to facilitate the creation, deployment, and management of intelligent robotic systems. The majority of this contractual commitment is due within five years and upon the project progress.

Other than purchases of property, plant and equipment and intangible assets stated under investing activities, there were no other significant capital expenditures incurred in either the 2025 Fiscal Year or the 2024 Fiscal Year.

OFF-BALANCE SHEET ARRANGEMENTS

The Group currently has no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, and credit risk support or other benefits.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Credit risk

Assets that potentially subject the Group to a significant concentration of credit risk primarily consist of cash, trade and other receivables, prepayments and amounts due from related parties. Cash balances are held with reputable financial institutions in Malaysia with high credit ratings, which management considers to carry minimal credit risk. For trade receivables, the Group is exposed to extreme customer credit concentration: as of December 31, 2025, 99.78% (2024: 95.92%) of total gross trade receivables were due from the Group’s five largest debtors. Management evaluates debtor creditworthiness continuously using lifetime expected credit loss models under IFRS 9.

Cash holdings risk

The Group maintains the position that the cash held within its portfolio are exposed to minimal credit risk. This belief stems from the fact that these assets are managed by esteemed financial institutions located within the jurisdictions of operation of both Agroz Inc. and its subsidiaries. We believe that the rigorous standards and reputations of these institutions significantly mitigate potential risks associated with our cash holdings.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group does not account for any fixed rate financial instruments at fair value through profit or loss; therefore, fixed-rate borrowings do not expose the Group to fair value interest rate risk. Interest rates on the Group’s lease contracts and bank borrowings are fixed. The Group’s variable interest rate risk arises primarily from cash at bank. Per Note 14(b), if interest rates on bank deposits had been 50 basis points higher/lower with all other variables held constant, the Group’s profit for the 2025 Fiscal Year would increase/decrease by approximately MYR 7,390 ($1,822) (2024: MYR 1,953). Accordingly, the Group’s interest rate risk exposure was insignificant.

Foreign currency risk

Our exposure to foreign currency risk arose primarily through service income or expenses denominated in a currency other than the functional currency of the operations to which the currency relates. The currencies giving rise to this risk are primarily US$. As MYR converts to US$ the exchange rate becomes larger, but foreign exchange fluctuations remain stable, refer from these few years even the exchange rate will increase but its increase gradually at a stable rate.

CRITICAL ACCOUNTING ESTIMATES

Under International Financial Reporting Standards (“IFRS”), we are required to make estimates and assumptions in presentation and preparation of the financial statements for the 2024 Fiscal Year and 2025 Fiscal Year.

We prepared our consolidated financial statements in accordance with IFRS, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates.

We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our results of operations or financials condition.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) expected credit loss of trade receivables; (ii) operating leases and right of use asset; (iii) redeemable convertible preference shares and (iv) revenue recognition. See Note 3 — Significant Accounting Policies to our consolidated financial statements for a disclosure of these accounting policies. We believe that provision for expected credit losses on trade receivables involve the most significant judgements in the preparation of our consolidated financial statements.

(i) Provision for expected credit losses on trade receivables

The Group estimates the loss allowances for trade receivables by assessing the ECLs in accordance IFRS 9 Financial Instruments. This requires the use of estimates and judgements due to the inherent uncertainty in estimating the expected loss rate over the life of trade receivables.

For trade receivables related to third-party retail outlet customers, the Group measures loss allowances at an amount equal to lifetime ECLs, which is calculated using a provision matrix. Expected loss rates are based on actual loss experience over the past 2 years. These rates are adjusted to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.

For trade receivables related to third-party industrial business customers and related parties, the Group measures loss allowances at an amount equal to lifetime ECLs, which is calculated using a behavioral scoring system taking into consideration current and historical credit worthiness, aging analysis, operating history in the relevant industry, reputation in the market and paid-in capital scale. Customers with positive behavior in all scoring areas, would be assigned a low-risk grading. Customers with positive behavior in most of the scoring areas, would be assigned a fair-risk grading. Customers with lesser positive behavior in scoring areas, would be assigned a substantial grading. The Group keeps assessing the expected credit loss of trade receivables during their expected lives.

Additionally, the Group makes specific bad debt provisions based on any specific knowledge the Group has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Group to use substantial judgment in assessing its collectability. After the reporting date and up to the date of this report, there have been no significant changes in macroeconomic indicators or customer credit risk that would materially impact the assumptions used in the ECL model. Management continues to monitor forward-looking indicators, including industry-specific developments and credit performance, to assess whether adjustments are required in future reporting periods.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2.3 to our consolidated financial statements entitled ‘Basis of preparation’ for a discussion of recent accounting pronouncements. Effective January 1, 2025, the Group adopted Amendments to IAS 21 - Lack of Exchangeability, which had no material impact on the consolidated financial statements. Recently issued standards not yet effective include Amendments to IFRS 7 and IFRS 9 (effective January 1, 2026), IFRS 18 Presentation and Disclosure in Financial Statements (effective January 1, 2027), and IFRS 19 Subsidiaries without Public Accountability Disclosures (effective January 1, 2027). Management is currently evaluating the impact of these standards and anticipates that their initial adoption will not have a material effect on the Group’s consolidated financial position or results of operations.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES