Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our Company's financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. See "Cautionary Note Concerning Forward-Looking Statements" on page 9.

Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars" or "$" refer to the legal currency of the United States. Throughout this report, assets and liabilities of the Company's subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the unaudited condensed consolidated statements of changes in shareholders' deficit.

Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to Zicix Corporation and its consolidated subsidiary, as "ZICX," "we," "us" and "our."

Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.

Overview

We are not required to obtain permission from the Chinese authorities to operate or to issue securities to foreign investors.

ZICX is a Nevada holding company that through its subsidiary provides technology driven digital marketing and advertising solutions. ZICX conducts its business through its wholly owned subsidiary, ASN Zone One Limited, a company registered in Hong Kong ("ASN"). ASN began operations in Hong Kong on September 2, 2022, and was engaged in the storage network business. It was dedicated to developing a platform that would enable businesses to optimize their logistics processes through a single platform. In attempting to develop its platform, ASN encountered market challenges that adversely affected the Hong Kong logistics business as a whole including limited cost-effective land supply for logistics uses, including modern well-located warehouses, government land reclamation and re-zoning efforts, inadequate infrastructure support, high land, labor, energy, and vehicle costs, disruption in US-China trade, and uncertain global trade policies, trade wars and tariffs. In light of these challenges, ASN elected to suspend development of its logistics platform and transitioned to developing a marketing and advertising platform in November 2024.

ASN's current core offering is an "AI-Enabled Global Network Marketing and Advertising Platform," which integrates cutting-edge hardware (e.g., naked eye 3D LED displays) with smart software systems to deliver end-to-end services for clients' global business expansion. ASN began operations in September 02, 2022, and operates in Hong Kong. ASN is actively seeking potential clients such as media outlets in Hong Kong and China to convert some of the outdoor advertising from 2D to 3D.

ASN initially intended to focus on extending its reach to the Middle East by the end of 2026. Since March 2026, we have experienced temporary cessation of Dubai business operations due to an inability to execute the scheduled product shipments to our regional distribution hub in Dubai, resulting from regional supply chain and transit disruptions caused by U.S.-Iraq conflict. As of March 31, 2026, our bank accounts had been suspended, resulting in no cash balances, also certain overdue convertible debts totaling approximately $326,700 (principal and unpaid interest) were in default. We have funded ASN's operations and capital expenditure primarily through financial support from our stockholders and directors. Our continuation as a going concern is dependent upon improving profitability, securing continued financial support from our stockholders or raising additional capital through external fund-raising, such as, private placements. Management believes the existing stockholders will provide additional cash to meet with our obligations as they become due. However, there is no assurance that we will be successful in securing sufficient funds to sustain the operations.

Management is actively negotiating with holders of convertible debts and note totaling approximately $947,000 to restructure or extend repayment terms. These negotiations include discussions on potential debt-to-equity conversions, revised maturity schedules, and partial settlements to alleviate immediate liquidity pressure. While some binding agreements have been finalized as of the date of this filing, management believes that constructive progress has been made and that creditors are receptive to restructuring proposals.

Management is actively monitoring the situation and if financing and opportunities permit, ASN hopes to redirect its business development efforts to other regions not affected by such conflict such as North Africa, US, Europe, and Asia.

We are at a development stage company.

We reported a net loss of $653,617 and $189,582 for the three months ended June 30, 2026, respectively. We had current assets of $498,679 and current liabilities of $3,399,515 as of June 30, 2026.

Our financial statements for three months ended June 30, 2026 and have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders and external fund-raising through private placements. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, capital leases and short-term and long-term debts.

Results of Operations.

Three Months Ended June 30, 2026, as compared to Three Months Ended June 30, 2025

The following table sets forth selected financial information from our statements of comprehensive income for the three months ended June 30, 2026, and 2025:

		Three Months Ended June 30,
		2026				2025
Revenues, net		$	-			$	300,869
Cost of revenues			-				(5,601	)
Gross profit			-				295,268
Operating expenses:
General and administrative expenses			(522,109	)			(273,987	)
Total operating expenses			(522,109	)			(273,987	)
(Loss) income from operations			(522,109	)			21,281
Interest expenses on bonds payable, convertible debts and promissory note			(46,183	)			(109,266	)
Interest on lease liabilities			(5,342	)			(9,295	)
Written-off of plant and equipment			(79,983	)			-
Change in fair value of convertible debts and promissory note			-				(103,137	)
Sundry income			-				10,835
Total other expenses, net			(131,508	)			(210,863	)
Loss before income taxes			(653,617	)			(189,582	)
Income tax expense			-				-
Net loss		$	(653,617	)		$	(189,582	)

Revenues

The Company currently generates one source of revenue:

				For three months ended June 30,
Type of revenue sources		Time of recognition		2026				2025
Product sales		At a point in time		$	-			$	300,869

For the three months ended June 30, 2026, we generated no revenues, representing a decreased of $300,869 from $300,869 in the same period of 2025. The temporary cessation of our Dubai business operations since March 2026 was primarily due to our inability to execute the scheduled product shipments to the regional distribution hub in Dubai, resulting from regional supply chain and transit disruptions caused by U.S.-Iraq conflicts. We expect to resume our business expansion in Dubai and Middle East, once U.S.-Iraq conflict is resolved.

For the three months ended June 30, 2026, the Company has no single customer who accounted for 10% of its revenues.

Cost of revenues

Cost of revenues of $0 for the three months ended June 30, 2026, decreased by $5,601, as compared to $5,601 in the same period of 2025, which was mainly due to no trading business during the period. Cost of revenues of $5,601 for the three months ended June 30, 2025 consisted primarily of the direct wages, telemarketing service charges, depreciation and amortization of right-of-use assets.

For the three months ended June 30, 2026, the Company has no single vendor who accounted for 100% of its total cost of revenue.

Gross Profit

We achieved a gross profit of $0 and $295,268 for the three months ended June 30, 2026, and 2025, respectively. The decrease in gross profit was mainly due to no trading business during the period.

Operating Expenses

General and Administrative Expenses ("G&A"): General and administrative expenses of $522,109 and $273,987 for the three months ended June 30, 2026, and 2025, respectively. These expenses primarily include payroll, office operating costs, as well as business development advisory fees..

Income Tax Expense

There was no income tax expense for the three months ended June 30, 2026, and 2025.

Liquidity and Capital Resources

Working Capital

As of June 30, 2026, and March 31, 2026, we had working capital deficit of $2,900,836 and $2,726,143, respectively.

Going Concern

For the three months ended June 30, 2026, we incurred an operating loss of $653,617 and reported a working capital deficit of $3,083,974 and accumulated deficit of $6,355,869. Since March 2026, the Company has experienced temporary cessation of Dubai business operations due to its inability to execute the scheduled product shipments to its regional distribution hub in Dubai, resulting from regional supply chain and transit disruptions caused by U.S.-Iraq conflict. As of June 30, 2026, the Company's bank accounts had been suspended, resulting in no cash balances, also certain convertible debts totaling approximately $795,000 (principal and unpaid interest) were in default. The Company has funded its operations and capital expenditure primarily through financial support from its stockholders. The continuation of the Company as a going concern is dependent upon improving profitability, securing continued financial support from its stockholders or raising additional capital through external fund-raising, such as, private placements. Management believes the existing stockholders will provide additional cash to meet with the Company's obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

Management is actively negotiating with holders of convertible debts and note totaling approximately $947,000 (principal and unpaid interest) to restructure or extend repayment terms. These negotiations include discussions on potential debt-to-equity conversions, revised maturity schedules, and partial settlements to alleviate immediate liquidity pressure. While some binding agreements have been finalized as of the issue date of these consolidated financial statements, management believes that constructive progress has been made and that creditors are receptive to restructuring proposals.

These raise substantial doubt about the Company's ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

Cash Flows

The following summarizes the key component of our cash flows for the three months ended June 30, 2026, and 2025:

		Three Months Ended June 30,
		2026				2025
Net cash used in operating activities		$	(403,951	)		$	(234,826	)
Net cash provided by investing activities		$	-			$	(4,971	)
Net cash provided by financing activities		$	398,996			$	180,587

Net Cash Used in Operating Activities

For the three months ended June 30, 2026, net cash used in operating activities was $403,951, which primarily consisted of a net loss of $653,617 and a decrease in operating lease liabilities of $61,725, partially offset by an increase in accrued liabilities and other payables of $160,766, and adjusted for non-cash items including write-off of property, plant, and equipment of $79,983, amortization of right-of-use assets of $50,250, amortization of debt discount of $15,050, and interest expenses on lease liabilities of $5,342.

For the three months ended June 30, 2025, net cash used in operating activities was $234,826, which primarily consisted of a net loss of $189,582, an increase in prepayments and other current assets of $325,865, and a decrease in operating lease liabilities of $56,686, partially offset by an increase in accrued liabilities and other payables of $97,489, and adjusted for non-cash items including fair value change of convertible debts and promissory note of $103,137, amortization of debt discount of $70,625, amortization of right-of-use assets of $50,570, interest expenses on lease liabilities of $9,295, and depreciation of plant and equipment of $6,191.

Net Cash Used In Investing Activities

There was no cash flow from investing activities for discontinued operations for the three months ended June 30, 2026.

For the three months ended June 30, 2025, net cash used in investing activities of $4,971, represents purchase of plant and equipment during the period.

Net Cash Provided by Financing Activities

For the three months ended June 30, 2026, net cash provided by financing activities for continuing operations was $398,996 which consisted primarily of subscription proceeds from private placement of $390,000, advance from a shareholder of $135 and advance from a related party of $8,861.

For the three months ended June 30, 2025, net cash provided by financing activities for continuing operations was $180,587 which consisted primarily of subscription proceeds from private placement of $430,000 and offset by repayment of bonds payable and convertible debts of $21,261, repayment to a shareholder of $156,576 and repayment to a related party of $71,576.

All advances are repayable on demand and interest-free.

Material Cash Requirements

As of June 30, 2026, we had an accumulated deficit of $6,355,869. Our material cash requirements are highly dependent upon the additional financial support from our stockholders in the next 12 - 18 months.

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

Contractual Obligations and Commercial Commitments

Pursuant to the Stock Purchase Agreement dated July 25, 2024, the Company is required to issue to the Seller (Lo Yiu Kwok) to an aggregate of 63,000 shares of the Company's common stock, at a par value of $0.00001 upon the achievement of certain milestones by its subsidiary, ASN, during the three-years' period following July 25, 2024 ("Performance Period") as set forth below:

Annual revenue milestones (US$) during Performance Period		Number of shares issuable to the Seller
Equal or above $500,000 and less than $1,000,000			12,600
Equal or above $1,000,000 and less than $2,000,000			37,800
Equal or above $2,000,000			63,000

We are limited to issue a maximum of 63,000 shares of the Company's common stock as earnout shares. The earnout shares, if issued, classified as equity in accordance with ASC 480 and ASC 815.

Subsequently, the Company's subsidiary, ASN, did not meet with the minimum annual revenue of $500,000 as the performance milestone for the first year from July 26, 2024 to July 25, 2025, and the second year from July 26, 2025 to July 25, 2026 under the Performance Period, therefore no earnout shares were issued.

Except as noted above, we had no other contractual obligations and material commercial commitments as of June 30, 2026.

Critical Accounting Estimates

Our Annual Report on Form 10-K for the year ended March 31, 2026, includes a description of certain critical accounting estimates, including those with respect to the allowance for expected credit losses, the useful lives of plant and equipment, impairment of long-lived assets, revenue recognition, allowance for deferred tax assets, uncertain tax position, fair value of convertible debts and promissory note and income tax provision, which we believe are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates. During the quarter ended June 30, 2026, there have been no material changes to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended March 31, 2026.

Recently Issued Accounting Pronouncements

The Company has evaluated all recently issued accounting pronouncements and believes such pronouncements do not have a material effect on the Company's unaudited condensed consolidated financial statements. A list of recently issued accounting pronouncements that are relevant to us is included in the notes to our unaudited condensed consolidated financial statements included elsewhere in this report (see "Note 2 - Summary of Significant Accounting Policies").