Core AI Holdings, Inc 6-K, filed Aug 27, 2026
Core AI Holdings, Inc. (CHAI)
About this 6-K
Core AI Holdings, Inc filed this 6-K on August 27, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of: August 2026
Commission
File Number:
(Translation of registrant’s name into English)
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒ Form 20-F ☐ Form 40-F
Included with this Report of Foreign Private Issuer on Form 6-K (this “Report”) as Exhibit 99.1 and incorporated herein by reference are the financial results of Core AI Holdings, Inc., a British Columbia, Canada corporation (the “Company”), for the three and six months ended June 30, 2026. Also included with this Report as Exhibit 99.2 and incorporated herein by reference is the Company’s Management’s Discussion and Analysis for the three and six months ended June 30, 2026.
The information and documents furnished in this Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.
Forward Looking Statements
This Report and the exhibits furnished herewith contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Because these forward-looking statements and their implications are neither historical facts nor assurances of future performance and are based on the Company’s current expectations, they are subject to various risks and uncertainties and changes in circumstances that are difficult to predict and may be outside of the Company’s control, and actual results, performance or achievements of the Company could differ materially from those described in or implied by the statements in this Report. The forward-looking statements contained or implied in this Report are subject to other risks and uncertainties, including those discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2026, and in any subsequent filings with the SEC. Except as otherwise required by law, the Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Any references and links to websites and social media have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this Report. The Company is not responsible for the contents of third-party websites.
EXHIBIT INDEX
* Furnished not filed.
| 2 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 27, 2026 | CORE AI HOLDINGS, INC. | |
| By: | /s/ Aitan Zacharin | |
| Aitan Zacharin, Chief Executive Officer | ||
| 3 |
Exhibit 99.1
CORE AI HOLDINGS INC. AND ITS SUBSIDIARY
UNAUDITED CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepayments | ||||||||
| Other receivables, net | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Long-term investment | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Account and other payables | $ | $ | ||||||
| Taxes payable | ||||||||
| Due to related party | ||||||||
| Current operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Warrant and preferred share liability | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Share capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficits | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ||||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
CORE AI HOLDINGS INC. AND ITS SUBSIDIARY
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| USD | USD | USD | USD | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of providing services | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Allowance for credit loss | ( | ) | ( | ) | ( | ) | ||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign exchange (loss)gain | ( | ) | ( | ) | ||||||||||||
| Other income,net | ||||||||||||||||
| Total other income(expense), net | ( | ) | ||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expenses | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total comprehensive loss for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES* | ||||||||||||||||
| Weighted Average Shares Outstanding-Basic* | ||||||||||||||||
| Weighted Average Shares Outstanding-Diluted* | ||||||||||||||||
| Loss per share | ||||||||||||||||
| Ordinary share - Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Ordinary share - Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
CORE AI HOLDINGS INC. AND ITS SUBSIDIARY
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Number of Ordinary shares | Share capital | Accumulated deficit | Accumulated other comprehensive loss | Total shareholders’ Equity | ||||||||||||||||
| USD | USD | USD | USD | |||||||||||||||||
| Balance as of December 31, 2024* | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||
| Balance as of March 31, 2025(Unaudited) | ( | ) | ( | ) | ||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Translation Adjustment | - | |||||||||||||||||||
| Balance as of June 30, 2025(Unaudited) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2026(Unaudited) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Issuance of common stock in a private placement | ||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2026(Unaudited) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
CORE AI HOLDINGS INC. AND ITS SUBSIDIARY
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
| 2026 | 2025 | |||||||
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) | ( | ) | ( | ) | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right of use assets | ||||||||
| Allowance for credit loss | ( | ) | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepayments | ||||||||
| Other receivables | ||||||||
| Account and other payables | ( | ) | ||||||
| Tax payables | ( | ) | ||||||
| Due to related party | ||||||||
| Current operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Net cash provided by investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from private placement | ||||||||
| Net cash provided by financing activities | ||||||||
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | ||||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS, beginning of year | ||||||||
| CASH AND CASH EQUIVALENTS, end of year | ||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | ||||||||
| Cash paid for interest expense | ||||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Initial recognition of right-of-use assets and lease liabilities, net of disposal | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
CORE AI HOLDINGS, INC. AND ITS SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(UNAUDITED)
| 1. | Corporation information |
Core AI Holdings, Inc. (formerly Siyata Mobile Inc.) (the “Company” or the “Group”) was incorporated under the laws of British Columbia, Canada. On October 3, 2025, the Group completed a merger (the “Merger”) with Core Gaming, Inc. (“Core Gaming”), a developer of AI-driven gaming technologies. Upon completion of the Merger, Core Gaming became a wholly-owned subsidiary of the Group. Newbyera Technology Limited (“Newbyera”), a developer of cloud-based gaming platforms, is the sole operating subsidiary of Core Gaming. In connection with the Merger, the Group changed its name to Core AI Holdings, Inc
| 2. | Summary of Significant Accounting Policies |
1) Basis Presentation
(a) Business Combination
On
February 26, 2025, Core Gaming, Inc. (“Core Gaming”) entered into a Merger Agreement (the “Merger Agreement”)
with Siyata Mobile Inc.(“Siyata Mobile”) and Siyata Core Acquisition U.S., Inc., a wholly-owned subsidiary of Siyata Mobile
(“Merger Sub”) (the “Merger”). Upon completion of the Merger on October 3, 2025, (i) Core Gaming merged with
and into Merger Sub, with Core Gaming continuing as the surviving entity and a wholly owned subsidiary of Siyata Mobile, and (ii) in
exchange for the outstanding shares of Core Gaming’s common stock, Siyata Mobile issued common shares ( before
the
(b) Basis of Accounting
The
Merger is accounted for as a reverse acquisition and a business combination using the acquisition method of accounting in accordance
with ASC 805. While Core AI Holdings, Inc (formerly Siyata Mobile Inc) is the legal acquirer and Core Gaming was determined to be the
accounting acquirer based on an evaluation of the following facts and circumstances:(1) Relative voting rights, since the former shareholders
of Core Gaming own
The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes any contingent consideration arrangement and any pre-existing equity interest in the subsidiary measured at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The excess of (a) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the (b) fair value of the identifiable net assets acquired is recorded as goodwill. Refer to note 15 for additional information.
(c) Principal of Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on that control ceases.
The unaudited condensed interim consolidated financial statements include the accounts of Core AI Holdings, Inc. (formerly Siyata Mobile Inc.) and its wholly-owned subsidiaries, Core Gaming, Inc. and Newbyera Technology Limited (collectively, the “Company”). All intercompany transactions, balances and unrealized gains have been eliminated in consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
(d) Use of Estimates
The preparation of these unaudited consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of these unaudited consolidated interim financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Group to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Group bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, useful lives and collectability evaluation of accounts receivables. Actual results could differ from those estimates.
(e) Foreign Currency Translation
The Group’s functional currency is United States dollars. The Group translates the financial statements of the Group entities (none of which has the currency of a hyperinflationary economy) that have a different functional currency different from the presentation currency into United States dollars. Assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect at the consolidated balance sheet dates. Revenues and expenses are translated at the average exchange rates prevailing during the period. Unrealized gains or losses arising from currency translation are included in other comprehensive loss.
2) Related Party Transactions and Balances
The Company identifies related parties in accordance with ASC 850, Related Party Disclosures. Related parties include, among others, principal owners, management, members of their immediate families, and entities for which such parties can significantly influence management or operating policies. Related party transactions are recorded based on the terms of the underlying arrangements and are disclosed when material to the financial statements.
3) Going Concern
For
the three months ended June 30, 2026 and 2025, The Group had losses of $
As
of June 30, 2026, the Group had cash and cash equivalents of $
The Group may, however, need additional cash resources in the future if the Group experiences changes in business conditions or other developments, such the need to develop new games and features or enhance its existing games, improve its operating infrastructure, or acquire complementary businesses, personnel or technologies., or if the Group finds and wishes to pursue opportunities for investments, acquisitions, capital expenditures or similar actions. If the Group determines that its cash requirements exceed the amount of cash and cash equivalents it has on hand at the time, the Group may seek to issue additional equity or debt securities. The issuance and sale of additional equity would result in further dilution to its shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict its operations. The Group cannot assure you that financing will be available in amounts or on terms acceptable to the Group, if at all.
4) Revenue Recognition
The Group recognizes revenue in accordance with ASC606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those services. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the Group satisfies a performance obligation.
Revenue is measured at the fair value of the consideration received or receivable for the sales of services in the ordinary course of the Group’s activities.
The Group generates its revenue through publishing advertisements on various advertising platforms. The Group’s performance obligation is to provide customers with access to the advertising solutions. The transaction price is the product of either the number of completions of agreed upon actions or advertisements displayed and the contractually agreed upon price per advertising unit. Revenues are recognized at the point-in-time the advertisements are displayed in the game or the services has been completed as the customer simultaneously receives and consumes the benefits provided from these services. The revenue is estimated based on advertising data for each month and revised after confirmation of revenues with various advertising agencies.
When another party is involved in providing goods or services to a customer, the Group determines whether the nature of its promise is a performance obligation to provide the specified services itself (i.e., the Group is a principal) or to arrange for those services to be provided by the other party (i.e., the Group is an agent).
The Group is a principal if it controls the specified services before those services are transferred to a customer. The Group is an agent if its performance obligation is to arrange for the provision of the specified services by another party. In this case, the Group does not control the specified services provided by another party before those services are transferred to the customer. When the Group acts as an agent, it recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified services to be provided by the other party. This evaluation is performed separately for each performance obligation identified. For the six months ended June 30, 2026 and 2025, there was no revenue recognized on a net basis where the Group is acting as an agent.
5) Cash and Cash Equivalents
Cash consists of cash on hand and cash in banks. The Group considers highly liquid investments such as time deposits and certificates of deposit with original maturities of three months or less to be cash equivalents.
6) Accounts Receivable and Expected Credit Loss
Trade receivables represent amounts due from customers for services provided in the ordinary course of business. The majority of the Group’s trade receivables relate to advertising services. Trade receivables are generally due within 30 to 60 days from the invoice date and are classified as current assets.
Trade receivables are recorded at the invoiced amount, net of an allowance for credit losses. The Group accounts for expected credit losses on trade receivables in accordance with ASC Topic 326, Financial Instruments—Credit Losses (“ASC 326”).
The allowance for credit losses represents management’s estimate of expected credit losses over the contractual life of the receivables. In estimating expected credit losses, the Group considers historical credit loss experience, the aging of outstanding receivable balances, customer-specific financial conditions, current economic conditions, and reasonable and supportable forecasts of future economic conditions that may affect customers’ ability to pay.
The Group generally evaluates trade receivables that share similar risk characteristics on a collective basis and may evaluate certain receivables individually when specific information indicates that the credit risk of such receivables differs from that of the broader portfolio.
The Group utilized an aging-based provision matrix and other appropriate methodology to estimate expected credit losses. Historical loss rates are adjusted, as necessary, to reflect current conditions and reasonable and supportable forecasts.
Changes in the allowance for credit losses are recognized in earnings. Trade receivables are written off against the allowance when they are deemed uncollectible. Recoveries of amounts previously written off are recognized when received.
7) Account and Other Payables
Accounts Payable primarily consist of amounts due to advertising platforms and agencies for marketing services, as well as game development fees owed to third-party game suppliers. Other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. These payables are typically settled within the standard payment terms contracted with the respective suppliers. These payables do not bear interests.
8) Leases
The Group accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). The Group determines whether an arrangement is or contains a lease at contract inception.
Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities are initially measured at the present value of the lease payments not yet paid over the lease term. When the rate implicit in the lease is not readily determinable, the Group uses its incremental borrowing rate based on the information available at the lease commencement date.
The lease term includes the noncancelable period of the lease and periods covered by options to extend the lease when the Group is reasonably certain to exercise such options, as well as periods covered by options to terminate the lease when the Group is reasonably certain not to exercise such options.
Operating lease ROU assets are initially measured at the amount of the operating lease liability, adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received.
For operating leases, lease expense is recognized on a straight-line basis over the lease term. Subsequent to commencement, the operating lease liability is measured at the present value of the remaining lease payments, and the ROU asset is reduced by the difference between the straight-line lease expense and the interest accretion on the lease liability, adjusted for any impairment, prepaid or accrued lease payments, and lease incentives, as applicable.
The Group reviews its operating lease ROU assets for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment, when events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.
The Group has elected not to recognize ROU assets and lease liabilities for short-term leases with an initial term of 12 months or less. Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term.
9) Intangible assets
Patents and licenses
Cost
for applying and registering patents, trademark and copyright are capitalized at cost and are subsequently carried at cost less accumulated
amortization and accumulated impairment losses. These costs are amortized to profit or loss using the straight-line method over
10) Income Taxes
The Group accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”).
Current income taxes are recognized based on taxable income for the applicable period in accordance with the tax laws and regulations of the respective tax jurisdictions in which the Group operates.
Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect of a change in enacted tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Group evaluates the realizability of its deferred tax assets based on the weight of available positive and negative evidence. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, the Group considers, among other factors, historical operating results, cumulative losses, forecasts of future taxable income, the reversal of existing taxable temporary differences, and available tax-planning strategies.
The Group recognizes the effect of an uncertain tax position only when it is more likely than not, based on the technical merits, that the tax position will be sustained upon examination by the relevant taxing authority. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Group recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.
For interim reporting periods, the Group determines its income tax provision in accordance with ASC Topic 740-270, Income Taxes—Interim Reporting. The Group generally applies an estimated annual effective tax rate to year-to-date ordinary income or loss and recognizes the tax effects of discrete items in the interim period in which they occur.
11) Financial Instruments
The Group’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, other receivables, accounts payable and other current liabilities. The carrying amounts of these financial instruments approximate their fair values due to their short-term maturities.
The Group presents basic and diluted loss per share data for its common shares. Basic loss per share is calculated by dividing the profit or loss attributable to common shareholders of the Group by the weighted average number of common shares outstanding during the period, adjusted for own shares held. Diluted loss per share is calculated by dividing the loss by the weighted average number of common shares outstanding assuming that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.
The weighted average number of common shares outstanding used in the calculation of basic and diluted net loss per share for the six months ended June 30, 2026 and 2025 have been retroactively restated to reflect the shares of common stock issued to the shareholders of the accounting acquirer in connection with the reverse merge closed on October 3, 2025.
Shares of the legal acquirer outstanding prior to the reverse merge, including shares originally outstanding, shares issued in a pre-merger equity line fund raising, and shares resulting from the conversion of the Preferred C common stock, are reflected in the weighted average share count only from the date of the merger (October 3, 2025) through June 30, 2026.
The
weighted average number of shares was retroactively changed to reflect the
13). Fair value of assets and liabilities
The fair values of applicable assets and liabilities, are determined and categorized using a fair value hierarchy as follows:
| (a) | Level 1 - the fair values of assets and liabilities with standard terms and conditions and which trade in active markets that the Group can access at the measurement date are determined with reference to quoted market prices (unadjusted). | |
| (b) | Level 2 - in the absence of quoted market prices, the fair values of the assets and liabilities are determined using the other observable, either directly or indirectly, inputs such as quoted prices for similar assets/liabilities in active markets or included within Level 1, quoted prices for identical or similar assets/liabilities in non-active markets. | |
| (c) | Level 3 - in the absence of quoted market prices included within Level 1 and observable inputs included within Level 2, the fair values of the remaining assets and liabilities are determined in accordance with generally accepted pricing models. |
Fair value measurements that use inputs of different hierarchy levels are categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Except as disclosed in the respective notes, the carrying amounts of the current financial assets and financial liabilities, including cash and bank balances, trade and other receivables, trade and other payables approximate their respective fair values due to their short maturity nature.
14) Commitments and Contingencies
The Group accounts for loss contingencies in accordance with ASC Topic 450, Contingencies (“ASC 450”).
The Group records an accrual for a loss contingency when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated. If a loss is probable and a range of loss can be reasonably estimated but no amount within the range is a better estimate than any other amount, the minimum amount in the range is accrued.
When a loss is reasonably possible but not probable, or when a loss is probable but the amount cannot be reasonably estimated, the Group discloses the nature of the contingency and an estimate of the possible loss or range of loss, if such an estimate can be made.
The Group evaluates its contingencies on an ongoing basis and adjusts its accruals and related disclosures as additional information becomes available.
15) Recent accounting pronouncement
ASU 2025-05 — Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. The amendments also provide entities other than public business entities with an accounting policy election related to the consideration of subsequent cash collections when estimating expected credit losses for such assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim reporting periods within those annual reporting periods, with early adoption permitted. The Group adopted ASU 2025-05 effective January 1, 2026. The adoption of ASU 2025-05 did not have a material impact on the Group’s unaudited condensed consolidated financial statements.
ASU 2024-03 and ASU 2025-01 — Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments require public business entities to disclose additional information about certain expenses included in relevant expense captions presented on the face of the income statement, including, among other items, purchases of inventory, employee compensation, depreciation, and intangible asset amortization, as applicable. In January 2025, the FASB issued ASU 2025-01, which clarified the effective date of ASU 2024-03. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statement disclosures.
| 3. | Cash and cash equivalents |
Schedule of cash and cash equivalents
As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Cash in bank | ||||||||
| Total | ||||||||
| 4. | Accounts Receivable |
Accounts receivable, net, consists of the following:
Schedule of accounts receivable
As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Accounts receivable | ||||||||
| Less: allowance for credit loss | ( | ) | ( | ) | ||||
| Accounts receivable, net | ||||||||
Changes in the allowance for credit losses for the six months ended June 30, 2026 and 2025 were as follows:
Schedule of changes in the allowance for credit losses
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Balance at beginning of period | ||||||||
| Provision (recoveries) for expected credit losses | ( | ) | ||||||
| Write-offs | ( | ) | ( | ) | ||||
| Other adjustments / foreign currency translation | ( | ) | ||||||
| Balance at end of period | ||||||||
| 5. | Prepayments, net |
Prepayments consist of the following:
Schedule of prepayments, net
As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Advance to suppliers | ||||||||
| Total | ||||||||
| 6. | Other receivables, net |
Other receivables, net consist of the following:
Schedule of other receivables, net
As of June 30 | As of December 31 | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Consideration receivable from divestment | ||||||||
| Employee advances | ||||||||
| Prepaid GST | ||||||||
| Loan receivable* | ||||||||
| Other | ||||||||
| Total | ||||||||
| * |
| 7. | Lease |
The Group leases office facilities and other premises under non-cancelable operating lease agreements with various expiration dates. The Group determines whether an arrangement is or contains a lease at contract inception.
Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the rate implicit in the lease is not readily determinable, the Group uses its incremental borrowing rate based on the information available at the lease commencement date.
Operating lease expense is recognized on a straight-line basis over the lease term.
For
the three and six ended June 30, 2026, rent expenses for the operating leases were US$
For
the three and six ended June 30, 2025, rent expenses for the operating leases were US$
Cash
paid for amounts included in the measurement of lease liabilities were US$
As
of June 30, 2026, the Group’s operating leases had a weighted average remaining lease term of approximately
The total future minimum lease payments under the non-cancellable operating leases as of June 30, 2026 are as follows:
Schedule of future minimum lease payments under the non-cancellable operating leases
| Year ending December 31, | Minimum lease payments | |||
| USD | ||||
| 2026 | ||||
| 2027 | ||||
| Total lease payments | ||||
| Less: Interest | ( | ) | ||
| Total lease liabilities | ||||
Future amortization of the Group’s ROU assets is presented below:
Schedule of future amortization of thee ROU assets
| Year ending December 31, | ||||
| USD | ||||
| 2026 | ||||
| 2027 | ||||
| Total | ||||
| 8. | Account and other payables |
Schedule of account and other payables
As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Account payable | ||||||||
| Payroll Payable | ||||||||
| Other payables | ||||||||
| Total | ||||||||
| 9. | Revenue |
The following table disaggregates the revenue for the six months ended June 30, 2026 and 2025 are as follows:
Schedule of disaggregates the revenue
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Advertisement publishing service | ||||||||
| Total | ||||||||
| 10. | Income tax |
The
Group recorded no material income tax expense or benefit for the three and six months ended June 30, 2026. The Group’s effective
income tax rate differed from the applicable statutory income tax rates primarily due to losses incurred in jurisdictions for which
Following the divestiture of the Group’s legacy mobile hardware business in December 2025, the Group is subject to income taxes in Canada, the United States, Hong Kong and other jurisdictions in which it conducts business, as applicable.
The Group evaluates the realizability of its deferred tax assets based on the weight of available positive and negative evidence. As of June 30, 2026, the Group maintained a full valuation allowance against its net deferred tax assets because management concluded that it is more likely than not that such deferred tax assets will not be realized.
As
of June 30, 2026 and December 31, 2025, the Group had
| 11. | Intangible assets, net |
Intangible assets consist of capitalized patent application fees.
Schedule of intangible assets
As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| USD | USD | |||||||
| Cost | ||||||||
| Trademark right | ||||||||
| Copyright | ||||||||
| Patent right | ||||||||
| Total | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | ||||||||
| 12. | Share capital |
(a) Common Stock
The Group has authorized an number of common shares without par value and as of June 30, 2026 and at December 31, 2025, has issued and outstanding and common shares, respectively.
During
the year ended December 31, 2025, the Group issued common shares ( before the
On
October 3, 2025, the Group issued common shares ( before the
All share and per-share amounts in these financial statements have been retroactively adjusted to reflect this split for all periods presented, unless otherwise noted as “pre-consolidation..”
On
June 10, 2026, the Group entered into a securities purchase agreement with an institutional investor in connection with a registered
direct offering of common shares and pre-funded warrants to purchase up to
During
June 2026, holders exercised a portion of the pre-funded warrants. On June 15, 2026, pre-funded warrants to purchase
(b) Preferred C shares
The Company is authorized to issue shares of Series C Preferred Stock with a stated value of $ per share. As of June 30, 2026 and December 31, 2025, shares of Series C Preferred Stock were issued and outstanding.
(c) Stock Options
The Group has a shareholder-approved “rolling” stock option plan (the “Plan”) in compliance with Nasdaq policies. Options can have a maximum term of ten years and typically terminate 90 days following the termination of the optionee’s employment or engagement, except in the case of retirement or death. Vesting of options is at the discretion of the Board of Directors at the time the options are granted.
Schedule of stock options outstanding
| Grant Date | Number of options outstanding | Number of options exercisable | Weighted Average Exercise Price | Expiry date | Remaining contractual life (years) | |||||||||||||
| 13-Apr-22 | $ | |||||||||||||||||
| Total | $ | |||||||||||||||||
Schedule of restricted share units issued as part of stock option plan
| Grant Date | Number of RSU’s outstanding | Number of RSU’s exercisable | Weighted Average Issue Price | |||||||||
| 9-Mar-22 | ||||||||||||
| 13-Apr-22 | ||||||||||||
| RSU, June 30, 2026 | ||||||||||||
(d) Agents’ Options
Agents’ options issued and outstanding as of June 30, 2026 are as follows:
Schedule of options issued and outstanding
| Grant Date | Number of options outstanding | Number of options exercisable | Weighted Average Exercise Price | Expiry date | Remaining contractual life (years) | |||||||||||||
| 11-Jan-22 | $ | |||||||||||||||||
| 31-Oct-23 | $ | |||||||||||||||||
| Total Agent options at June 30, 2026 | $ | |||||||||||||||||
| 13. | Common Stock Warrant |
The Group accounts for common stock warrants as equity instruments in accordance with ASC 815-40, Contracts in Entity’s Own Equity. The warrants are (i) indexed to the Group’s own stock and (ii) meet the criteria for equity classification, as the Group maintains the ability to settle the warrants in shares and no cash-settlement triggers exist that are outside the Group’s control. Accordingly, these warrants are recorded in additional paid-in capital at their relative fair value on the date of issuance and are not subject to subsequent remeasurement.
In
connection with the Merger on October 3, 2025, the Group issued an aggregate value of $
The balance of the warrants are as follow:
Schedule of common stock warrant
| #of units | Amount | #of units | Amount | #of units | Amount | #of units | Amount | |||||||||||||||||||||||||
| Warrants | Pre-funded warrants | Pre-funded warrants | ||||||||||||||||||||||||||||||
| 11-Jan-22 | 31-Oct-23 | 3-Oct-25 | Total | |||||||||||||||||||||||||||||
| #of units | Amount | #of units | Amount | #of units | Amount | #of units | Amount | |||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Warrant arising from acquisition of Siyata PTT | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Issuance of warrants | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance, warrant amount | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Issuance of warrants | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance, warrant amount | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| 14. | Acquisition of Siyata Mobile |
The
total consideration transferred for accounting purposes was determined based on the fair value of the equity interests that Core Gaming
would have been required to issue to the former shareholders of Siyata Mobile to provide them with the same percentage ownership interest
in the combined entity that they received as a result of the merger.
Goodwill
arising from the transaction was calculated as the excess of the deemed consideration over the fair value of Siyata Mobile’s identifiable
net assets acquired. As of the acquisition date, the fair value of Siyata Mobile’s net assets was $
The following summarizes the identified assets acquired and liabilities assumed pursuant to the accounting acquiree as of October 3, 2025:
Schedule of identified assets acquired and liabilities assumed
| Cash | ||||
| Trade and other receivables | ||||
| Prepaid expenses | ||||
| Inventory | ||||
| Advance to suppliers | ||||
| Long term receivable | ||||
| Right of use assets | ||||
| Equipment | ||||
| Intangible Assets | ||||
| Total assets | ||||
| Loans to financial institutions | ||||
| Accounts payable and accrued liabilities | ||||
| Lease obligations | ||||
| Warrant and preferred share liability | ||||
| Long term lease liability | ||||
| Total liability | ||||
| Net assets |
| 15. | Certain Risks and Concentration |
Credit risk
Financial
instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash held in banks.
The cash balance in each financial institution in the United States is insured by the FDIC up to $
The
Hong Kong Deposit Protection Board pays compensation up to a limit of HKD
Customer concentration risk
For
the six months ended June 30, 2026, two customers accounted for
For
the six months ended June 30, 2025, two customers accounted for
As
of June 30, 2026, two customers accounted for
Vendor concentration risk
For
the six months ended June 30, 2026, three vendors accounted for
For
the six months ended June 30, 2025, two vendors accounted for
As
of June 30, 2026, three vendors accounted for
As
of December 31, 2025, four vendors accounted for
16. Related Party
Related Party
Schedule of related party transactions
| Name of related party | Relationship with the Company | |
| Siyata PTT et Al |
Due to related party
Due to related party consisted of the following:
Schedule from due to related party
June 30, 2026 | December 31, 2025 | |||||||
| US$ | US$ | |||||||
| Siyata PTT et Al | ||||||||
| Total | ||||||||
| 17. | Subsequent events |
The Group has evaluated subsequent events through the date of issuance of the consolidated financial statements, and identified the following subsequent events:
On July 31, 2026, the Group issued a press release announcing that on July 31, 2026, the Group received a notification letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Group that it is not in compliance with the minimum bid price requirement for its common shares listed for trading on Nasdaq.
On
August 11, 2026, the Group entered into a Market Issuance Sales Agreement (the “Sales Agreement”) with D. Boral Capital LLC
(“D. Boral”), to sell common shares for an aggregate offering price of up to $
Exhibit 99.2
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “our,” “us” or “we” refer to Core AI Holdings, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Corporate History
The Company was organized as a corporation under the laws of British Columbia, Canada, and maintains its registered and records office at 7404 King George Blvd., Suite 200, King’s Cross, Surrey, British Columbia V3W 1N6, Canada. The Company’s principal place of business is located at 25 SE 2nd Ave, Ste 550, Miami, FL 33131 and its telephone number is (514) 500-1181.
The Company was incorporated on October 15, 1986 as Big Rock Gold Ltd. as a corporation under the Company Act of British Columbia. On April 5, 1988, the Company changed its name to International Cruiseshipcenters Corp. On June 24, 1991, the Company changed its name to Riley Resources Ltd. Effective January 23, 1998, the Company consolidated its share capital on an eight-to-one basis and changed its name to International Riley Resources Ltd. Effective November 22, 2001, the Company consolidated its share capital on a five-to-one basis and changed its name to Wind River Resources Ltd. On January 3, 2008, the Company changed its name to Teslin River Resources Corp.
On July 24, 2015, Teslin River Resources Corp, completed a reverse acquisition by way of a three-cornered amalgamation, pursuant to which the Company acquired certain telecom operations of an Israel-based cellular technology company and changed its name to Siyata Mobile Inc. the Company acquired all of the issued and outstanding shares of Signifi Mobile Inc. (“Signifi”).
In March 2021, the Company acquired, through a wholly owned subsidiary formed by Signifi, all the outstanding units of Clear RF LLC.
The Company was initially registered with the TSXV under the symbol SIM. Its Common Shares were quoted on the OTCQX tier of the over-the-counter market maintained by OTC Markets Group, Inc., under the symbol SYATF from May 11, 2017 until September 25, 2020, at which time the Company’s Common Shares were listed only on the Nasdaq Capital Market.
On October 2, 2025, in contemplation of completion of the Merger (as hereinafter defined) the Company filed a Certificate of Change of Name with the Province of British Columbia, Canada, changing the Company’s name from Siyata Mobile Inc. to Core AI Holdings, Inc.
On October 3, 2025 the Company closed the merger (the “Merger”) contemplated by the Amended and Restated Merger Agreement (the “A&R Merger Agreement”) by and among the Company, Core Gaming, and Siyata Core Acquisition U.S., Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Core Gaming merged with and into Merger Sub, with Core Gaming continuing as the surviving entity and a wholly owned subsidiary of the Company. Pursuant to the terms of the A&R Merger Agreement, in exchange for the outstanding shares of Core Gaming’s common stock, the Company issued an aggregate of 67,302,300 of its common shares, no par value per share, to the former shareholders of Core Gaming. The Company’s Common Shares are now listed for trading on the Nasdaq Capital Market under the trading symbol “CHAI.”
Pursuant to the A&R Merger Agreement, at closing of the Merger, the Company’s directors and Chief Executive Officer, Marc Seelenfreund, resigned and the Company’s board of directors appointed Aitan Zacharin, as Chief Executive Officer and new directors. Since closing of the Merger, the board of directors has consisted of Marc Seelenfreund, Aitan Zacharin, Luisa Ingargiola, Thomas Tarala, and Mordechai Stenge. Gerald Bernstein has continued to serve as our Interim Chief Financial Officer. The Company appointment Arie Goor as Chief Financial Officer on July 1, 2026.
In connection with the start of post-Merger trading of the Company’s Common Shares, on October 7, 2025, the Company effectuated the October 2025 Reverse Split, which implemented a 1 for 4 share consolidation of its authorized share capital, such that every 4 Common Shares, no par value, in the authorized share capital of the Company were consolidated into 1 Common Share.
The October 2025 Reverse Split was approved by the Company’s board of directors on August 22, 2025 and the Common Shares began trading on a Reverse Split-adjusted basis, when the market opened on October 7, 2025. The October 2025 Reverse Split was implemented intended to allow the Company’s Common Shares to trade at above the $4 minimum price required for issuers initially listing on the Nasdaq Capital Market.
Business of the Company after the Merger
Following the Merger and through December 29, 2025, the Company pursued two distinct businesses. (i) the historical business of the Company prior to the Merger, which was the development and sale of next-generation Push-To-Talk over cellular handsets and accessories (the “Siyata Business”); and (ii) the business of Core Gaming. which was the development and distribution of mobile applications (the “Core Gaming Business”).
The Legacy Siyata Business
Prior to the Merger, the Siyata Business was the sole business line of the Company. The Company, through its subsidiaries Siyata Mobile Israel Ltd., Signifi Mobile Inc., and Siyata PTT Incorporated was a B2B global developer and vendor of next-generation Push-To-Talk over Cellular handsets and accessories. Its portfolio of PTT handsets and accessories enables first responders and enterprise workers to instantly communicate over a nationwide cellular network of choice, to increase situational awareness and save lives. Police, fire, and ambulance organizations as well as schools, utilities, security companies, hospitals, waste management companies, resorts and many other organizations use Siyata PTT handsets and accessories.
On December 23, 2025, the Company entered into and closed a definitive stock purchase agreement (the “SPA”), between the Company, as the seller, and Marc Seelenfreund as the buyer effecting the Company’s divestment of Siyata Mobile Inc. and its subsidiaries (the “Divested Assets”). Mr. Seelenfreund was, prior to closing of the Merger on October 3, 2025, the Chief Executive Officer and a director of the Company and has continued and remains a director since that time. The board of directors approved the SPA on December 18, 2025, with the exception of Mr. Seelenfreund, who abstained from the vote. Following the Company’s divestiture of the Divested Assets, Mr. Seelenfreund does not hold any employee or executive position with the Company.
Under the terms of the SPA, Mr. Seelenfreund paid the Company initial consideration of $100,000 in cash, and Siyata PTT Incorporated, the Company through which he plans to conduct the Siyata Business will pay earn-out consideration consisting of three separate annual earn-out payments. Each earn-out payment will equal the greater of $200,000 or 2% of gross revenue generated by Siyata PTT Incorporated during each applicable earn-out period (each calendar year of 2026, 2027, and 2028), as reported in the audited annual financial statements of Siyata PTT Incorporated prepared in accordance with IFRS. On December 29, 2025, the Company divested the Legacy Siyata Business. This represents a completed strategic action to streamline operations and concentrate capital and resources on the Company’s core artificial intelligence initiatives related to the development, distribution, and monetization of casual games, which are delivered as apps for mobile phones, and generate revenue through the display of ads in the games. In addition, the Company is seeking to focus on becoming a global AI technology and infrastructure company by expanding its our business operations into the development of a next-generation, vertically integrated global network of high-performance computing (“HPC”) and artificial intelligence (“AI”) data centers.
The Core Gaming Business
Following the divestiture of its legacy business on December 29, 2025, the Company shifted its strategic and operational focus to the development and growth of its Core Gaming business. The Company creates entertaining games for millions of players worldwide, while empowering developers to deliver player-focused games to enthusiasts in over 140 countries. Powered by artificial intelligence (“AI”) tools and algorithms, The Company’s Core Gaming Business is focused on the development, distribution, and monetization of casual games, which are delivered as apps for mobile phones, and generate revenue through the display of ads in the games.
In June 2024, Core Gaming acquired its operating subsidiary, Newbyera, a Hong Kong limited company, through which we reach over 40 million active users worldwide every month and continue to fuel growth through creativity and innovation. Core Gaming’s apps have over 600 million downloads.
As part of Core AI’s strategic growth plan, we recently began to focus on leveraging Core Gaming’s AI expertise and AI-native infrastructure to enter the expanding market for HPC and AI data centers. We plan to enter this market primarily by entering into joint ventures and collaborations, where we will seek to combine our AI-native infrastructure and capital markets expertise with the joint venture partners experience in identifying, designing, building and operating data centers. During the first half of 2026, we have entered into four joint venture agreements and one memorandum of understanding for the development of HPC and AI data centers domestically and internationally. Upon completion, the data centers will either be operated by the respective joint venture or sold to a third party or third parties on a turnkey basis. As these collaborations are in their early stages, no projects have as yet been presented to the joint venture for approval, nor has any financing commitment been secured.
We also intend to diversify our business by leveraging our AI-expertise to provide additional AI-related services such as AI-powered digital marketing and AI-driven media production.
On July 21, 2026, we started advancing our strategic positioning of HomeGPT as an AI-powered residential decision layer, expanding our platform’s role beyond home visualization to support planning, renovation and residential purchasing decisions.
Core Gaming’s mission is to become a leading casual mobile game developer and publisher. Our software, coupled with our deep industry knowledge and expertise and our focus on efficiency, has enabled us to rapidly scale a diversified portfolio of mobile games that we have developed and co-developed. To date we have launched more than 2,100 games into the market. We have created proprietary analytical software, in the form of our BI platform, that provides deep insight into the effectiveness of various marketing efforts for each title, enabling us to focus on those channels that are the most successful in reaching our target audience, in terms of both the distribution of games and the serving of ads. We believe that our algorithm-driven approach affords us a competitive advantage that has helped fuel our rapid growth.
Competition
The mobile gaming industry is extremely competitive globally, with many companies offering products and services similar to ours. The industry is highly fragmented and composed of companies ranging from small independent developers with limited resources to very large development companies with longer operating histories, greater financial, technical and marketing resources, and larger user bases than we have. Our primary competitors are other game developers, as well as companies that provide competing services to their customers, in particular, game publishing, including promotional activities. In addition, while the industry is experiencing significant growth, it continues to evolve and create new markets, which could lead to additional competition in the future. Successful execution of our strategy depends, in part, on our continued ability to attract and retain players in the markets where we are established and to expand the market for our games. Our continued success also depends on our ability to maintain our technological edge by continually refining our BI platform and offering new capabilities to developers and players.
Competitive Advantages
We believe that Core Gaming has a number of competitive advantages, first among them our track record of successfully launching and monetizing mobile games, which helps us to stand apart from competitors. Contributing to this track record are our high level of expertise in the mobile games ecosystem, our extensive relationships with third parties in the mobile game industry, and our proven ability to quickly expand into new markets and offerings. And underlying this success is our proprietary BI platform, with its unique algorithms and AI technologies that enable us to reach, with exceptional efficiency, a large number of target customers in diverse cultures and geographies for the many games we publish.
Our BI platform is a suite of AI marketing solutions that enables our marketing team to automate, optimize and manage our marketing efforts across different ad platforms and channels to increase the effectiveness of our efforts and the efficiency of our team, resulting in higher levels of monetization with lower levels of expenditure. Our marketing team leverages extensive data collected globally from our wide-ranging marketing activities to identify the types of users who are most likely to download and engage with particular types of games. Using the AI tools provided by the platform, the system enables our marketing team to generate content tailored to connect with users in different regions around the world. The team can set targeted returns, and the platform will monitor the data from different ad platforms to enable the team to run the marketing campaigns efficiently by assessing the campaigns’ effectiveness in real time, tweaking the approach automatically, and reaching the stated goals. In sum, AI is integral to our BI platform both in the analysis of our marketing campaigns in the generation of thousands of pictures and videos daily for ads, using less labor and producing faster and higher quality results.
Core Gaming helps its partners achieve user acquisition, cross-promotion, monetization and scalability. Core Gaming’s teams continue to innovate and develop cutting edge technology to keep our customers engaged through increased gamification and interactivity. In 2024, Core Gaming began rolling out AI tools that employ state of the art language, image and video models. Core Gaming’s AI-driven content generation streamlines mobile game production, reducing production time by over 40% compared to standard, non-AI driven production, and significantly enhances the final product. The technology has been well-received by content creators and influencers, as has been demonstrated by thousands of creators sharing AI-generated videos on various social media platforms like TikTok. We work with major mainstream distribution channels, advertising platforms, and data providers.
Core Gaming Business Model
We develop, co-develop and publish mobile gaming apps, distribute the games through our highly effective marketing efforts, and generate revenue by serving ads in the games.
Third-party game developers partner with us because of our expertise in marketing and monetizing apps. The advertisers who work with us seek to target the highly relevant users of apps in our diverse portfolio of apps. We display ads in the games in our portfolio and collect the related revenue, in the form of advertisement publishing fees, from various advertisement platforms, such as Applovin and Google. We serve advertisements from these platforms by integrating the platforms into our games and earn fees based on various metrics, such as impressions (the number of times an ad is displayed), clicks, and user downloads. Where a game was co-developed or was developed entirely by another developer, we share revenue from advertisements served in the game with such other party.
Employees
Through our operating subsidiary, Newbyera, we have a staff of 42 managing our operations by publishing apps, leveraging our BI platform, and coordinating with co-developers, among other things. Seven of these individuals are full time employees and 35 are independent contractors provided by Moremo, the former parent company of Newbyera, to which we pay a fee for those contractors and for the use of more than 100 others on an ad hoc basis pursuant to a Labor Service Contract on Dispatch and Employment between Moremo and Newbyera. Pursuant to this contract, Moremo provides labor dispatch services to Newbyera with respect to Chinese contract employees and in that regard (i) manages such employees’ recruitment, contracts, social insurance, housing provident funds, and payroll and (ii) pays the total employment costs (salaries, benefits, management fees) of such contract employees and ensures that the terms of their employment complies with local labor laws. The agreement provides that Moremo has the right to collect from Newbyera such contract employees’ compensation and related payments due to government entities and all employment-related fees. The contract had an initial five-year term which ended on April 30, 2026, and was automatically renewed for a new five-year period in accordance with its terms.
We rely on our highly skilled, technically trained and creative service providers with desirable skill sets, including game designers, engineers and project managers, to develop new technologies and create innovative games. Our goal is to attract and retain highly qualified and motivated providers directly or through Moremo.
Research and Development
Our research and design team has extensive expertise in creating new content and gameplay features, as well as proprietary tools and systems to enable the efficient design, development and implementation of new content and features. Continued investment in research and development is important to attaining our strategic objectives and meeting the evolving needs of our customers. To maintain our competitive edge, we focus on innovating new technologies, which we apply to new and existing games. We also develop and integrate into our products both open source and internal AI technologies as follows:
Text and Language Models
| 1) | Model Technology: We use state-of-the-art Transformer-based pre-trained language models (such as GPT-4) and domain-specific fine-tuned models. | |
| 2) | Applications and Features: These models excel at understanding user requirements and generating high-quality, diverse, multilingual content. Capabilities include creative copywriting, precise multilingual translations, asset ideation, and risk analysis. Our technology supports multilingual generation with outstanding performance in logical coherence, semantic depth, and stylistic control. | |
| 3) | Impact: Our AI-driven content generation streamlines asset production, reducing production time by over 40% and significantly enhancing creative output and efficiency. |
Voice Models
| 1) | Model Technology: Our advanced in-house voice cloning and Text-to-Speech (“TTS”) models accurately replicate human voice characteristics, including tone, timbre, and emotion. Using high-fidelity voice cloning models like Cosy Voice and SoVits, we can transform any text into speech that matches any individual’s voice. | |
| 2) | Applications and Features: We offer personalized voice cloning services that require only minimal voice samples to generate high-quality, natural-sounding cloned voices. Our TTS models support multiple languages and voice options, catering to a variety of use cases. | |
| 3) | Impact: Our high-fidelity voice cloning preserves both vocal tone and emotional nuances, facilitating multilingual adaptations for film and media projects. For example, our partner LuckyShort utilizes our voice cloning and TTS technology for automated multilingual dubbing of short dramas, achieving a 50% boost in content production efficiency while significantly reducing labor costs. |
Image Models
| 1) | Model Technology: We utilize Generative Adversarial Networks (GANs) and diffusion-based models (such as Stable Diffusion and Flux) to optimize artistic stylization and image generation. | |
| 2) | Applications and Features: Our models support various image transformation and generation styles, including artistic style transfer, anime conversion, and vintage filters. These models can generate high-resolution, high-quality images and offer customizable AI-generated portraits, memes, and more. Our technology is known for precise style control and attention to detail, supporting user-specific customization. | |
| 3) | Impact: The generated images achieve a high standard of artistic and visual authenticity, widely used in game design, social media content, and advertising. Our models provide users with innovative ways to create visual assets, sparking new creative ideas. |
Video Models
| 1) | Model Technology: Our video generation technology is built on diffusion models optimized for temporal consistency and neural rendering techniques (such as Video Diffusion and Deforum). By integrating cutting-edge models like Vidu and Kling, we enable video style transfer and text/image-to-video generation | |
| 2) | Applications and Features: We support transforming video content into animated, stylized versions and generating dynamic video content from text or images. Our models address challenges related to temporal consistency and smooth detail transitions, making them ideal for film production and creative short videos. | |
| 3) | Impact: The generated videos are diverse in style, fluid in motion, and rich in detail. This technology has been well-received by content creators and influencers, with thousands of creators sharing AI-generated videos on platforms like TikTok. |
Data Center Business
As part of Core AI’s strategic growth plan, we recently began to focus on leveraging Core Gaming’s AI expertise and AI-native infrastructure to enter the expanding market for HPC and AI data centers. Our goal is to develop a network of a next-generation, vertically integrated global network of HPC and AI data centers. The data center market refers to the industry dedicated to designing, building, and managing data centers, essential for storing, processing, and managing vast amounts of digital information, including for AI and ML applications. These centers house servers, networking equipment, power and cooling and storage systems, ensuring seamless and secure data operation.
We intend to primarily rely on joint ventures and similar collaborations with third parties to identify and potential development sites, and design, build and operate HPC and AI data centers domestically and internationally. In these joint ventures and collaborations, we will seek to combine Core Gaming’s AI expertise and AI-native infrastructure and our capital markets expertise with the experience of our joint venture partners in identifying development sites and designing, building and operating data centers. During the first half of 2026, we have entered into four joint venture agreements for the development of HPC and AI data centers domestically and internationally in their respective market sectors and a memorandum of understanding with CSPM Resources SDN BHD to pursue data center development opportunities in Malaysia. In general, each of these collaborations provide that in each data center project mutually agreed upon, our partner will be responsible for presenting potential projects and approved projects, with Core Holdings using its commercially reasonable best efforts to secure financing for the projects. The collaborations will be 50/50 joint ventures, with our equity interest in the project subject to increase up to 80% depending on the amount of financing capital we are able to secure and contribute to the project. Upon completion, we expect that the data centers will either be operated by the respective joint venture or sold to a third party or third parties on a turnkey basis. As these collaborations are in their early stages, no projects have as yet been presented to the respective joint ventures for approval, not has any financing commitment been secured. Accordingly, there can be no assurance that our joint venture arrangements will lead to the successful development of any domestic or international data centers or that the Company will be successful in implementing its business plan.
Organizational Structure
Our subsidiaries as of June 30, 2026 are as follows:
| Name of Subsidiary | Principal Activities | Ownership | ||
| Core Gaming Inc. | Holding company established in the State of Delaware | 100% owned by the Company | ||
| Newbyera Technology Limited | Gaming and AI operations company established in Hong Kong | 100% owned by Core Gaming Inc. |
Property, Plant and Equipment
Our existing facilities provided by Moremo are adequate to meet current requirements and that suitable additional or substitute space will be available as needed to accommodate any further physical expansion of operations and for any additional offices.
Key Components of Results of Operations
Revenue
Our revenue consisted entirely of advertisement publishing fees from various advertisement platforms, such as Applovin and Google. We display advertisements from these platforms by integrating the platforms into our games and earn fees based on various metrics, such as impressions (the number of times an ad is displayed), clicks, and user downloads.
Cost of Providing Services
Our cost of revenues consists of the costs directly related to the delivery of our services, primarily advertisement promotion fees paid to various platforms and agencies to promote our mobile games to end users, and technology service costs, which consists of the amounts that we pay to game developers as part of our fee and revenue- sharing arrangements when we co-develop games with them.
General and Administrative Expenses
General and administrative expenses consist primarily of the (1) administrative service fees paid to Moremo for back office services such as bookkeeping and rent, as well as certain technology services, pursuant to an Outsourcing Service Contract dated as of April 30, 2021, between Newbyera and Moremo, which provides integrated services including financial management (general ledger, accounts payable, payroll), legal support, procurement, human resources administration, and technical assistance. The Outsourcing Services Contact has a term of five years ending on April 30, 2026 and has been renewed for another five years ending April 30, 2031. And (2) compensation for its management and administrative personnel.
Allowance for credit losses
Net impairment losses on financial and contract assets is a provision for doubtful accounts receivable. The Company considers the probability of default upon initial recognition of assets, and evaluates whether there has been a significant increase in credit risk, on an ongoing basis throughout each reporting period.
Results of Operations
For the three and six months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods.
| For the Three Months Ended June 30, | Variance Amount | Variance % | ||||||||||||||
| 2026 | 2025 | |||||||||||||||
| USD | USD | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue | 22,353,654 | 14,344,630 | 8,009,024 | 56 | % | |||||||||||
| Cost of providing services | (22,364,682 | ) | (14,741,814 | ) | (7,622,868 | ) | 52 | % | ||||||||
| Gross profit | (11,028 | ) | (397,184 | ) | 386,156 | -97 | % | |||||||||
| General and administrative expenses | (1,614,924 | ) | (265,043 | ) | (1,349,881 | ) | 509 | % | ||||||||
| Allowance for credit loss | (22,455 | ) | (138,293 | ) | 115,838 | -84 | % | |||||||||
| Total operating expenses | (1,637,379 | ) | (403,336 | ) | (1,234,043 | ) | 306 | % | ||||||||
| Operating loss | (1,648,407 | ) | (800,520 | ) | (847,887 | ) | 106 | % | ||||||||
| Foreign exchange (loss)gain | (43,610 | ) | 28,939 | (72,549 | ) | -251 | % | |||||||||
| Other income, net | 67,795 | 13,227 | 54,568 | 413 | % | |||||||||||
| Total other income, net | 24,185 | 42,166 | (17,981 | ) | -43 | % | ||||||||||
| Loss before income tax | (1,624,222 | ) | (758,354 | ) | (865,868 | ) | 114 | % | ||||||||
| Income tax expenses | - | - | - | 0 | % | |||||||||||
| Net loss for the period, net of tax | (1,624,222 | ) | (758,354 | ) | (865,868 | ) | 114 | % | ||||||||
| For the Six Months Ended June 30, | Variance Amount | Variance % | ||||||||||||||
| 2026 | 2025 | |||||||||||||||
| USD | USD | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue | 26,122,190 | 28,854,393 | (2,732,203 | ) | -9 | % | ||||||||||
| Cost of providing services | (29,205,096 | ) | (29,479,919 | ) | 274,823 | -1 | % | |||||||||
| Gross profit | (3,082,906 | ) | (625,526 | ) | (2,457,380 | ) | 393 | % | ||||||||
| General and administrative expenses | (1,902,214 | ) | (463,876 | ) | (1,438,338 | ) | 310 | % | ||||||||
| Allowance for credit loss | (257,166 | ) | 178,221 | (435,387 | ) | -244 | % | |||||||||
| Total operating expenses | (2,159,380 | ) | (285,655 | ) | (1,873,725 | ) | 656 | % | ||||||||
| Operating loss | (5,242,286 | ) | (911,181 | ) | (4,331,105 | ) | 475 | % | ||||||||
| Foreign exchange (loss)gain | (86,593 | ) | 136 | (86,729 | ) | -63,771 | % | |||||||||
| Other income, net | 76,094 | 52,434 | 23,660 | 0 | % | |||||||||||
| Total other income(expense), net | (10,499 | ) | 52,570 | (63,069 | ) | -120 | % | |||||||||
| Loss before income tax | (5,252,785 | ) | (858,611 | ) | (4,394,174 | ) | 512 | % | ||||||||
| Income tax expenses | - | - | - | 0 | % | |||||||||||
| Net loss for the period, net of tax | (5,252,785 | ) | (858,611 | ) | (4,394,174 | ) | 512 | % | ||||||||
Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025
Revenue
Revenue was $22.4 million for the three months ended June 30, 2026, compared to $14.3 million for the three months ended June 30, 2025, representing an increase of $8.0 million, or 56%. The increase was primarily attributable to higher advertising revenue generated from the Company’s mobile games as the Company increased advertising and user acquisition activities during the second quarter of 2026 following the optimization of its advertising placements and marketing strategies during the first quarter of 2026.
For the six months ended June 30, 2026, revenue was $26.1 million, compared to $28.9 million for the six months ended June 30, 2025, representing a decrease of $2.7 million, or 9%. The decrease was primarily attributable to lower revenue during the first quarter of 2026, when the Company reduced its advertising and user acquisition spending in response to increased customer acquisition costs and discontinued certain advertising placements that did not meet the Company’s targeted return on investment. The impact of the lower revenue during the first quarter was partially offset by the significant increase in revenue during the second quarter of 2026 as the Company increased advertising activities following adjustments to its advertising and user acquisition strategies.
Costs of Providing Services
Cost of providing services was $22.4 million for the three months ended June 30, 2026, compared to $14.7 million for the three months ended June 30, 2025, representing an increase of $7.6 million, or 52%. The increase was primarily attributable to higher advertising placement costs associated with the increased advertising and user acquisition activities during the second quarter of 2026, generally consistent with the increase in revenue during the period.
For the six months ended June 30, 2026, cost of providing services was $29.2 million, compared to $29.5 million for the six months ended June 30, 2025, representing a decrease of $0.3 million, or 1%. Advertising placement costs represented the substantial majority of the Company’s cost of providing services during the period. Although the Company reduced its advertising and user acquisition activities during the first quarter of 2026 in response to higher customer acquisition costs and lower returns on certain advertising placements, such activities increased significantly during the second quarter of 2026. As a result, cost of providing services for the six-month period remained relatively consistent with the corresponding period in 2025 despite the decrease in revenue.
Gross Loss
Gross loss was $11,028 for the three months ended June 30, 2026, compared to $397,184 for the three months ended June 30, 2025, representing a decrease in gross loss of $386,156, or 97%. Gross margin approaches to breakeven for the three months ended June 30, 2026 as compared to negative 2.8% for the corresponding period in 2025. The improvement was primarily attributable to optimization of the Company’s advertising and user acquisition strategies, as revenue increased at a higher rate than the related cost of providing services during the period.
For the six months ended June 30, 2026, gross loss was $3.1 million, compared to $0.6 million for the six months ended June 30, 2025. Gross margin decreased to negative 11.8% from negative 2.2% for the corresponding period in 2025. The increase in gross loss was primarily attributable to the lower gross margin experienced during the first quarter of 2026, resulting from the temporary increase in customer acquisition costs for certain in-app advertising activities, as previously discussed. The adverse impact during the first quarter of 2026 was substantially offset by improved operating performance during the second quarter of 2026, during which the Company’s gross loss narrowed to approximately $11,000.
The improvement in gross margin during the second quarter of 2026, together with the 56% year-over-year increase in revenue, reflects the continued improvement in the Company’s operating performance. Based on the current trend, management believes that the Company is making progress toward achieving a positive gross margin as it continues to optimize its advertising and user acquisition strategies.
General and Administrative Expenses
General and administrative expenses were $1.6 million for the three months ended June 30, 2026, compared to $0.3 million for the three months ended June 30, 2025, representing an increase of $1.3 million, or 509%. The increase was primarily attributable to higher compensation expenses and other general and administrative expenses incurred during the period. Specifically, compensation expenses increased by approximately $0.6 million, primarily due to increased administrative headcount and higher salaries. Other general and administrative expenses increased by approximately $0.6 million, primarily attributable to higher professional service fees, including accounting, audit, consulting and other advisory fees due to the issuance of pre-funded warrants and common shares incurred during the period.
For the six months ended June 30, 2026, general and administrative expenses were $1.9 million, compared to $0.5 million for the six months ended June 30, 2025, representing an increase of $1.4 million, or 310%. Compensation expenses for the six months ended June 30, 2026 were approximately $0.8 million, representing an increase of approximately $0.6 million from the corresponding period in 2025, primarily due to increased administrative headcount and higher salaries. Other general and administrative expenses were approximately $1.1million for the six months ended June 30, 2026, representing an increase of approximately $0.8 million from the corresponding period in 2025. The increase was primarily attributable to approximately $0.6 million of additional professional service fees related to accounting, audit, consulting and other corporate services due to the issuance of pre-funded warrants and common shares, approximately $0.2 million insurance fees
Allowance for credit loss Allowance for credit loss were $22,455 for the three months ended June 30, 2026, compared to $138,293 for the three months ended June 30, 2025, representing a decrease of $115,838, or 84%. The decrease was primarily attributable to lower expected credit losses recognized on trade receivables and contract assets during the period.
For the six months ended June 30, 2026, the Company recognized net impairment losses on financial and contract assets of $257,166, compared to a reversal of impairment losses of $178,221 for the six months ended June 30, 2025, representing an adverse change of $435,387. The change was primarily attributable to an increase in the balance of receivables subject to expected credit loss.
Other Income (Expenses), Net
Other income (expenses), net, was not significant for the three and six months ended June 30, 2026 and 2025. For the three months ended June 30, 2026, the Company recorded net other income of $24,185, compared to net other income of $42,166 for the corresponding period in 2025.
For the six months ended June 30, 2026, the Company recorded net other expenses of $10,499 , compared to net other income of $52,570 for the corresponding period in 2025. Other income (expenses), net, primarily consisted of foreign exchange (loss) gain, interest income, interest expense, other expenses and finance costs.
Net Loss
As a result of the factors discussed above, our net loss was $1.6 million for the three months ended June 30, 2026, compared to $0.8 million for the three months ended June 30, 2025.
For the six months ended June 30, 2026, our net loss was $5.3 million, compared to $0.9 million for the six months ended June 30, 2025. The increase in net loss was primarily attributable to the factors discussed above.
Liquidity and Capital Resources
As of June 30, 2026, we had cash and cash equivalents of $12.0 million, which consisted of cash in banks and highly liquid investments with original maturities of three months or less. Our working capital as of June 30, 2026 was approximately $1.9 million. Historically, we have funded our operations, including capital expenditures, primarily through cash flow from operating activities, borrowings from related parties, and equity financing. We believe that our existing cash and cash equivalents, the cash generated from operations, and ATM facility are sufficient to fund our operations and capital expenditure requirements for at least the next 12 months.
These financial statements do not include any adjustment relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments, such the need to develop new games and features or enhance our existing games, improve our operating infrastructure, or acquire complementary businesses, personnel or technologies., or if we find and wish to pursue opportunities for investments, acquisitions, capital expenditures or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue additional equity or debt securities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
For the Six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash provided by (used in) operating activities | $ | 5,451,224 | $ | (2,423,005 | ) | |||
| Net cash provided by (used in) investing activities | - | - | ||||||
| Net cash provided by financing activities | 4,625,538 | - | ||||||
| Change in cash and cash equivalents | 10,104,216 | (2,378,881 | ) | |||||
| Cash and cash equivalents, beginning of year | 1,931,174 | 5,559,276 | ||||||
| Cash and cash equivalents, end of year | $ | 12,035,390 | $ | 3,180,395 | ||||
Operating Activities
Net cash provided by operating activities was $5.5 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $2.4 million for the six months ended June 30, 2025.
For the six months ended June 30, 2026, net cash provided by operating activities primarily reflected our net loss of $5.3 million, adjusted for non-cash items, and changes in operating assets and liabilities. The principal sources of operating cash flow included a $12.1 million increase in accounts and other payables and a $1.0 million decrease in other receivables. These cash inflows were partially offset by a $4.1 million increase in accounts receivable and a $1.3 million increase in prepayments.
For the six months ended June 30, 2025, net cash used in operating activities was $2.4 million, primarily reflecting our net loss of $0.9 million and changes in operating assets and liabilities, including a $3.5 million decrease in accounts and other payables, partially offset by a $1.9 million decrease in other receivables.
Investing Activities
There were no material cash flows from investing activities during either the six months ended June 30, 2026 or 2025.
Financing Activities
Net cash provided by financing activities was $4.6 million for the six months ended June 30, 2026, compared to no cash provided by or used in financing activities for the six months ended June 30, 2025. The cash inflow during the six months ended June 30, 2026 was attributable to capital contributions from shareholders through a private placement.
As a result of the operating and financing activities described above, together with the effect of exchange rate changes on cash and cash equivalents, cash and cash equivalents increased by $10.1 million during the six months ended June 30, 2026, from $1.9 million as of December 31, 2025 to $12.0 million as of June 30, 2026.
Critical Accounting Estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates:
Critical accounting estimates
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about critical estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are, but not limited to the following:
Income taxes - Tax provisions are based on enacted or substantively enacted laws. Changes in those laws could affect amounts recognized in profit or loss both in the period of change, which would include any impact on cumulative provisions, and future periods. Deferred tax assets, if any, are recognized to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those deferred tax assets are likely to reverse.
Impairment of non-financial assets - The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to asset impairment. The recoverable amount of an asset or a cash-generating unit (“CGU”) is determined using the greater of fair value less costs to sell and value in use which requires the use of various judgments, estimates, and assumptions.
Useful life of intangible assets – The Company estimates the useful life used to amortize intangible assets which relates to the expected future performance of the assets acquired based on management estimate of the sales forecast.
Future purchase consideration - In a business combination, the Company recognizes a contingent consideration at fair value at the acquisition date. Contingent consideration classified as an asset or liability or equity on the basis of the guidance in ASC 480 and other applicable U.S. GAAP (e.g., ASC 815-40). Contingent consideration classified as equity is not remeasured, and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured to fair value at each reporting date, with changes in fair value recognized in earnings, unless the arrangement qualifies for recognition in other comprehensive income under the hedge accounting guidance in ASC 815.
Critical accounting judgments
Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are, but are not limited to, the following:
Functional currency - The functional currency for the Company and each of the Company’s subsidiaries is the currency of the primary economic environment in which the respective entity operates. Such determination involves certain judgments to identify the primary economic environment. The Company reconsiders the functional currency of its subsidiaries if there is a change in events and/or conditions that determine the primary economic environment.
Going concern – As disclosed in Note 1 to the consolidated financial statements.