Quarterly Report for Quarter Ending September 30, 2025 (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 ix.

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 income (loss) within the unaudited condensed consolidated statements of changes in stockholders' (deficit) equity.

Unless indicated otherwise, throughout this Quarterly Report on Form 10-Q, we refer to International Endeavors Corporation and its consolidated subsidiaries, as "IDVV," "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.

Description of Business

International Endeavors Corporation is a Nevada holding company that through its subsidiaries are engaged primarily in property development construction and design services by implementing modular integrated construction technology ("MiC"), embedded with our proprietary atmospheric water generators ("AWG") and property management system by internet of things technology ("IoT"). We develop sustainable, technology-enabled communities that enhance the quality of life. We build smart, energy-efficient structures that we believe are secure, adaptable and ready for the future. We focus on projects that we believe will enhance the quality of life and reduce environmental impact, while driving innovation and excellence in the real estate market across Australia, Europe, America and Asia.

By embracing advanced technologies, we expect to achieve competitive advantages, drive sustainable growth, and meet the evolving needs of modern urban environments. We believe that careful planning, strategic investment and effective risk management are essential to maximize the potential of these innovative solutions and ensure long-term success. We are dedicated to advancing the boundaries of construction innovation.

In carrying out our property development projects, we rely on third party manufacturers and partners to supply key components of our proprietary ModuLink platform, including modular steel structures and atmospheric water generators (AWGs). These systems are designed in-house and incorporate core technologies that are owned or controlled by the Company. However, the physical production of these components is currently outsourced to strategic manufacturing partners located in mainland China, that operate under strict adherence to our proprietary design specifications and quality standards.

On July 1, 2025, we entered into a cooperation agreement with a wholly owned subsidiary of Hume Plasterboard Pty Ltd, a building materials supplier. The agreement is for one year, with an option to extend the term if either party provides one month's prior notice. Both parties will collaborate on applying MiC technologies across a range of housing developments, with a shared focus on quality, speed, and sustainability. We will lead project planning and modular design. HUME will supply off-site prefabricated MiC using building materials according to the design requirement of IDVV and in compliance with the local building codes. The collaboration brings together Modulink's expertise in modular construction and Hume Plasterboard's industry leadership, aiming to deliver faster, greener, and smarter solutions for future building projects.

In addition to these core manufactured components, we also source various auxiliary materials and technologies from local suppliers in the regions where projects are developed. This hybrid sourcing strategy allows us to optimize cost efficiencies, reduce logistical complexity, and support regional economies.

To mitigate geopolitical, regulatory, and operational risks, we are actively exploring opportunities to identify and engage qualified manufacturing partners outside of mainland China. Our intention is to diversify our supply chain by establishing relationships with suppliers in jurisdictions that offer competitive cost structures, manufacturing capabilities, and regulatory stability. This strategic initiative is designed to enhance our supply chain resilience while maintaining the quality and performance standards required for our proprietary technologies.

On September 29, 2025, the Company's wholly owned subsidiary, ModuLink Innotech Company Limited ("MICL") has entered into a three-year Exclusive Distribution and Marketing Agreement with ASA Robotics Limited ("ASA"). Under this arrangement, MICL has been appointed as ASA's exclusive partner to promote, market, and distribute ASA's AI Health System, Luna CAT, a fall detection and prevention solution designed for elderly care, in Hong Kong and international markets. In addition, both parties have agreed in principle to explore the potential co-development of next-generation AI Companion Services. Any such development would be subject to separate future agreements defining scope, responsibilities and commercial terms.

To mitigate geopolitical, regulatory, and operational risks, we are actively exploring opportunities to identify and engage qualified manufacturing partners outside of mainland China. Our intention is to diversify our supply chain by establishing relationships with suppliers in jurisdictions that offer competitive cost structures, manufacturing capabilities, and regulatory stability. This strategic initiative is designed to enhance our supply chain resilience while maintaining the quality and performance standards required for our proprietary technologies.

Because we are dependent on third party manufacturers to support certain aspects of our business activities, any interruption in the provision of products by these third parties whether due to supply chain disruptions, regulatory restrictions, or geopolitical developments may impair our ability to deliver properties to our clients in a timely or cost-effective manner. Please see "Risk Factors - We rely on third-party manufacturers and partners for certain aspects of our operations, and any interruptions in the provision of products provided by these third parties may impair our ability to deliver properties to our clients." Set forth in the Registration Statement.

Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions to our executive officers or existing shareholders, and short-term and long-term debts. We expect to finance future acquisitions through a combination of the foregoing. While we believe that existing shareholders and our officers and directors will continue to provide additional cash to make acquisitions and to meet our obligations as they become due or that we will obtain external financing, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. Currently, we rely on funding provided by our officers and directors to support our ongoing operating activities. In light of this support, along with the continued forbearance of Zenith (Hong Kong) Engineering Limited ("Zenith (HK)") as discussed below, we believe our existing cash position and other sources of liquidity are sufficient to fund our operations for at least the next 12 months. To implement our business plan, we estimate that we will require approximately $6.5 million over the next 12 months and a total of $11.5 million over the next 24 months. We are actively evaluating various financing alternatives to meet these capital requirements.

We are indebted to Zenith (HK) in the approximate amount of $129,629 as of September 30, 2025. Pursuant to the Stock Purchase Agreement dated January 22, 2025, the two convertible promissory notes were purchased and assigned to Zenith (HK) on January 30, 2025. On February 28, 2025, Zenith (HK) waived all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company. We owe approximately $129,629 pursuant to such notes. Both notes have already become due and payable. However, Zenith (HK) has indicated a willingness to work with the Company regarding repayment of such loans. We do not expect to generate sufficient cash flow to repay these notes within the next twenty-four months. There is no assurance that we can generate sufficient cash flow to repay these notes after such twenty-four-month period, if ever. If we are required to repay these notes prior to achieving profitability, our ability to implement our business plan or to expand our business may be significantly delayed.

Recent Change in Control

On January 22, 2025, Raymond Valdez, the sole executive officer and director entered into the Stock Purchase Agreement, pursuant to which Mr. Valdez agreed to sell (the "Sale") to ModuLink Inc., a British Virgin Islands corporation ("ModuLink BVI"), and Zenith (Hong Kong) Engineering Limited, a Hong Kong corporation ("Zenith (HK)"), 200,000 shares of Preferred A shares, representing all of the issued and outstanding shares of Preferred A, and the transfer of certain promissory notes of the Company held by third parties, in an aggregate consideration of Two Hundred Eighty Thousand Dollars ($280,000). Each holder of Preferred A shares is entitled to vote together with holders of the common stock with each one Preferred A share voting as twenty thousand shares of common stock. Similarly, each one share of Preferred A is convertible into twenty thousand shares of common stock. The Sale consummated on February 10, 2025.

In connection with the Sale, Raymond Valdez and Bill Martin resigned from all of their positions with the Company and the following persons were appointed to the offices set forth next to their names, effective February 10, 2025:

Name		Position
TAM, Hin Wah Anthony		Chairman
FU, Wah		Chief Executive Officer
AU-YEUNG, Sai Kit		Chief Financial Officer and Secretary
WONG, Ho Man Alex		Non-Executive Director
FUNG, Kwai Kin		Non-Executive Director

TAM, Hin Wah Anthony, our Chairman of the Board is the controlling shareholder of ModuLink BVI. PUN, Ah Keung is the sole shareholder of Zenith (HK).

As part of the Sale, the each of Bearcreek Resourses, Inc., a Montana corporation, and Tala Media Corp., a Wyoming corporation, transferred to Zenith (HK) certain convertible promissory notes of the Company in the principal amounts of $65,000 and $75,000, respectively on January 30, 2025. The notes are convertible into shares of the Company's common stock in accordance with the terms set forth therein. On February 28, 2025, Zenith (HK) waived all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company.

The Company, Mr. Valdez, ModuLink BVI and Zenith (HK) further agreed that the parties intend to transfer ownership of Witech to Mr. Valdez or its designees as part of the sale of the Preferred A shares. The transfer has been completed on May 1, 2025.

The foregoing descriptions of the Stock Purchase Agreement, each of the promissory notes transferred to Zenith (HK), and the Waiver and Amendment Agreement of promissory notes are qualified in their entirety by reference to the Stock Purchase Agreement, which is filed as Exhibits 10.1 through and including 10.5 to this Registration Statement and are incorporated herein by reference.

Immediately prior to the closing of the transactions contemplated in the Stock Purchase Agreement, the Company amended and restated its Articles of Incorporation to amend the rights, powers and designations of the Series A Convertible Preferred Stock so that each holder of Preferred A shares is entitled to vote together with holders of the common stock with each one Preferred A share voting as twenty thousand shares of common stock, representing an increase from the prior voting ratio of one to ten thousand. Similarly, each one share of Preferred A became convertible into twenty thousand shares of common stock, representing an increase from the prior conversion ratio of one to ten thousand. The Company also confirmed the Company's prior cancellation of the Series B Preferred Stock.

Acquisition of ModuLink Investment Limited, our property development business adopting modular construction technology

On March 28, 2025, the Company entered into a Share Exchange Agreement (the "Share Exchange") of all the issued and outstanding shares with the shareholders of ModuLink Investment Limited (hereafter referred to as, ModuLink), a British Virgin Islands limited liability company. ModuLink and its subsidiaries engage in the property development industry adopting modular construction technology by leveraging Modular Integrated Construction (MiC), Atmospheric Water Generators (AWG), and Internet of Things (IoT) technology enhanced by AI to redefine property development. The Company agreed to issue 2,356,712,066 shares of common stock, at a valuation of $0.0034 per share, in exchange for all the issued and outstanding shares with the shareholders of ModuLink. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company's securities to the shareholders of ModuLink. This Share Exchange was consummated on May 1, 2025.

The foregoing description of the Share Exchange Agreement is qualified in its entirety by reference to the Share Exchange Agreement which is filed as Exhibit 10.5 to this Registration Statement and is incorporated herein by reference.

Prior to the acquisition of ModuLink and immediately after the disposition of Witech as stipulated in the Stock Purchase Agreement, the Company was considered as a shell company due to its nominal assets and limited operation. Upon the acquisition, ModuLink will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, ModuLink is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of ModuLink after the acquisition date. ModuLink was the legal acquiree but is deemed to be the accounting acquirer. The Company, on the other hand, was the legal acquirer but is deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer. Historical stockholders' equity of the accounting acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. Operations prior to the merger are those of the acquirer. After completion of the share exchange transaction, the Company's consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer.

Our corporate structure is described below:

(1)	International Endeavors Corporation, a Nevada corporation, is our parent holding company and conducts no business operations.
(2)	ModuLink Investment Limited, a British Virgin Islands limited company, is a holding company.

(3)	ModuLink Corporation Limited, a Hong Kong limited liability company, focuses on strategic planning and providing intergroup management services serving its subsidiaries.
(4)	Zenith Integrated Modular Limited, a Hong Kong limited liability company, provides design, engineering and holistic project management services, including project planning, procurement, logistics, assembly and installation.
(5)	ModuLink InnoTech Company Limited, a Hong Kong limited liability company, is a technology development company focused on AWG and building management systems with built-in software to enable real-time monitoring and control.
(6)	Zenith AY Modular Buildings Company Limited, a Hong Kong limited liability company, is an investment holding and project investment company
(7)	ModuLink Australia Pty. Ltd., an Australian limited liability company, is a project management company that facilitates project development in Australia. Each of Zenith AY Modular Buildings Company Limited and Zenith (PMS) Limited, a Hong Kong company, hold 40% and 60% of the outstanding securities of ModuLink Australia Pty. Ltd. TAM, Hin Wah Anthony, our Chairman of the Board, is the director and controlling shareholder of Zenith (PMS) Limited.

Business and Financial plans

The Company has not undertaken any MiC projects since 2024 but has strategically dedicated its efforts to essential groundwork - such as regulatory planning, site selection, and capital to support the successful rollout of future projects. The Company is currently working to identify cost-effective areas and or engaging in feasibility discussions with local partners and landowners to assess project viability and strategic alignment in Australia and Hong Kong. The Company seeks to commence one to two MiC projects in the next twelve months contingent upon successfully securing requisite funding.

In January 2025, we began providing design and management services for a residential property in Hong Kong. We also continued our MiC business development efforts and the provision of design services management with Zenith (HK). ModuLink is actively exploring potential development projects in Australia, North America and various parts of Europe. Concurrently, ModuLink InnoTech Company Limited expects to continue to invest in the research and development of AWG and IoT technologies, aiming to integrate these cutting-edge innovations into the smart, sustainable homes that the ModuLink group will build in the future.

Australia: Affordable Housing for Elderly or Retirement Communities

In Australia, Zenith AY Modular Buildings Limited and our affiliated company, ModuLink Australia Pty Ltd. are evaluating potential affordable housing projects located in the New South Wales and Victoria regions targeted at elderly or retired residents. Under this initiative, project-specific joint venture entities will be established to lead the planning, project financing, sales and promotion of the properties. ModuLink Australia Pty Ltd. will be responsible for project management and architectural design by leveraging its core expertise in modular construction. We expect that each housing unit will offer optional integration with ModuLink's proprietary Atmospheric Water Generator (AWG) system for off-grid water supply, as well as a power storage system for off-grid energy independence. Additionally, the homes will be equipped with embedded IoT devices, including vital sign monitoring and alert systems, to enhance resident safety and well-being. This project aligns with ModuLink's commitment to developing sustainable, smart living environments tailored to the needs of vulnerable populations.

We intend to focus on New South Wales and Victoria regions, where we believe the demand for affordable housing is high. Currently, Zenith AY Modular Buildings Limited has built a smart modular house in Melbourne to showcase our top-tier design. With respect to our Australia projects, we expect to purchase building modules designed by us from Chinese manufacturers, source other building components locally and partner with local architects and sub-contractors to ensure a smooth building process and compliance with local building codes. We further expect ModuLink InnoTech Company Limited to assist in developing custom building management and AWG solutions for our projects in Australia.

We are in active discussions to raise the funds necessary to finance our potential property development projects in Australia. We believe that we will be able to commence our affordable housing property development projects in the next twelve months assuming that we are able to successfully raise approximately $6.5 million. If we are able to raise approximately $11.5 million, we expect to begin acquiring land to build our land reserve for future projects.

Canada/North America/Parts of Europe:

We are currently engaged in very preliminary considerations for projects located in these regions. We hope to initiate outreach with local partners as market conditions and finances permit.

Results of Operations.

Overview

The Company is engaged in the business of property development by implementing modular integrated construction technology ("MiC"), embedded with our proprietary atmospheric water generators ("AWG") and property management system by internet of things technology ("IoT"). We believe that these technologies support the development of sustainable and intelligent properties tailored for a varieties markets, including residential, commercial, industrial, and remote or resource-scarce environments.

We are at a development stage company and during the periods ended September 30, 2025 and 2024, the Company only derived revenue from modular building construction and design services business. We reported a net loss of $765,591 for the nine months ended September 30, 2025, compared to a net profit of $4,060 for the same period in 2024. For the three months ended September 30, 2025, we reported a net loss of $286,364, versus a net profit of $15,576 for the corresponding quarter in 2024. We had current assets of $1,026,022 and current liabilities of $643,352 as of September 30, 2025. As of December 31, 2024, our current assets and current liabilities were $1,030,614 and $904,610, respectively. We had net cash used in operating activities of $1,381,198 for the period ended September 30, 2025 and net cash provided by operating activities of $205,536 for the period ended September 30, 2024. As at September 30, 2025 and December 31, 2024, we had accumulated deficit of $3,615,322 and $2,849,731, respectively.

Our financial statements for the periods ended September 30, 2025 and 2024 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. The Company plans to secure additional funding to support its current operations, expected future growth and strategic objectives. Management is actively pursuing financing opportunities through debt and equity transactions, as well as exploring new development projects and accelerating the commercialization of its products. If successfully executed, these initiatives are expected to generate positive operating cash flows and improve the Company's financial position.

Based on management's best estimates, the Company believes it has sufficient financial resources to meet its obligations for at least the next twelve months.

Results of Operations

For the Three Months Ended September 30, 2025 and 2024

The following table sets forth selected financial information from our consolidated statements of operations and comprehensive (loss) / income for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024
Revenues:
Design and build services		$	375,940			$	-
Project design and management services			-				294,855
Sales of goods			9,105				-
Total revenue			385,045				294,855
Cost of revenue			(341,648	)			(245,712	)
Gross profit			43,397				49,143
Operating expenses:
General and administrative expenses			(328,986	)			(31,231	)
(Loss) / Profit from operation			(285,589	)			17,912
Other expenses, net			(775	)			(2,336	)
(Loss) / Profit before income taxes			(286,364	)			15,576
Income tax expense			-				-
Net (Loss) / Profit		$	(286,364	)		$	15,576

Revenue

During the three months ended September 30, 2025 and 2024, the following customers accounted for 10% or more of our total net revenues.

		Three months ended September 30, 2025								Three months ended September 30, 2024
Customer		Revenues				Percentage of revenues				Revenues				Percentage of revenues
An individual customer based in Hong Kong		$	375,940				98%			$	-				-%
Zenith (HK) Engineering Limited			-				-%				294,855				100%
Others			9,105				2%				-				-%
Total:		$	385,045				100%			$	294,855				100%

Revenue was $385,045 for the three months ended September 30, 2025, compared to $294,855 for the same period in 2024. The increase was primarily attributable to revenue contributions from the new design and build services project provided to an individual customer in Hong Kong.

In August 2024, we entered into a design services management agreement with Zenith (HK) for a total contract sum of HK$4,000,000 (approximately $513,000). Under this agreement, we provided technical design manpower services for the Sheung Shui Town Lot No. 263 (F0874), Kwu Tung North - Podium and Tower project. Our scope of work included deploying skilled technical personnel to support design development, project planning, coordination activities, and close collaboration with Zenith HK's internal team. This engagement marked a strategic shift toward service-based offerings that leverage our technical expertise while requiring less capital investment than traditional design and build contracts. The project was completed as scheduled in June 2025.

In addition, revenue for the quarter included contributions from a residential design, build, and project management engagement with an individual customer based in in Hong Kong, which commenced in January 2025, further expanding our service portfolio and reinforcing our presence in the region. Revenue recognized from this project during the three months ended September 30, 2025 amounted to $385,045. We expect to complete this project by December 2025.

Cost of Revenue

Cost of revenue was $341,648 for the three months ended September 30, 2025, compared to $245,712 for the same period in 2024. The increase was directly attributable to the commencement and execution of new projects during the quarter, and is consistent with the corresponding growth in revenue. The higher costs primarily reflect the deployment of additional resources, including labor and subcontracted services, to support the expanded scope of operations across our Design and Build Services segment.

Gross Profit

We achieved a gross profit of $43,397 for the three months ended September 30, 2025, compared to $49,143 for the same period in 2024. The slight decrease in gross profit was primarily driven by the completion of our project design and management service contract in June 2025. Such engagement contributed to higher overall revenue and margin.

General and administrative expenses ("G&A expenses")

General and administrative expenses were $328,986 for the three months ended September 30, 2025, compared to $31,231 for the same periods in 2024. These expenses primarily include advertising and marketing expenses, business development, professional and consultancy fees, personnel related expenses, as well as costs incurred in connection with general operations of the Company. The significant increase in general and administrative expenses during the current period was primarily driven by the continued expansion of our subsidiaries, which resulted in higher operational and staffing costs. Additionally, the Company incurred substantial professional fees related to the business combination process, including legal, advisory, and due diligence expenses. These investments reflect the Company's strategic efforts to support growth initiatives and strengthen its operational infrastructure.

Income Tax Expense

We did not incur any income tax expenses for the three months ended September 30, 2025, or 2024, as our operating subsidiaries recorded estimated tax losses during both periods. The Company's subsidiaries operating in Hong Kong are subject to Hong Kong Profits Tax under the two-tiered tax rate regime, with rates ranging from 8.25% to 16.5% on assessable profits, after applying the applicable tax concession for the relevant tax year.

Other expenses, net

This amount represents promissory note interest payable to our noteholders, net of bank and loan interest income earned during the period. The increase was primarily attributable to a higher level of outstanding promissory notes during the three months ended September 30, 2024.

Net (loss) /profit

As a result of the above factors, the Company incurred a net loss of $286,364 and net profit of $15,576 for the three months ended September 30, 2025 and 2024, respectively.

For the Nine Months Ended September 30, 2025 and 2024

The following table sets forth selected financial information from our consolidated statements of operations and comprehensive (loss) / income for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024
Revenues:
Design and build services		$	925,974			$	114,487
Project design and management services			217,949				294,855
Sale of goods			9,105				-
Total revenue			1,153,028				409,342
Cost of revenue			(1,018,544	)			(349,179	)
Gross profit			134,484				60,163
Operating expenses:
General and administrative expenses			(889,451	)			(46,825	)
(Loss) / Profit from operation			(754,967	)			13,338
Other expenses, net			(1,802	)			(7,469	)
(Loss) / Profit before income taxes			(756,769	)			5,869
Income tax expense			(8,822	)			(1,809	)
Net (loss) / profit		$	(765,591	)		$	4,060

Revenue

During the nine months ended September 30, 2025 and 2024, the following customers accounted for 10% or more of our total net revenues.

		Nine months ended September 30, 2025								Nine months ended September 30, 2024
Customer		Revenues				Percentage of revenues				Revenues				Percentage of revenues
An individual customer based in Hong Kong		$	925,974				81%			$	-				-
Zenith (HK) Engineering Limited			217,949				19%				294,855				72%
CRCC - Kwan Lee - Paul Y. JV			-				-%				114,487				28%
Others			9,105				-%				-				-%
Total:		$	1,153,028				100%			$	409,342				100%

Revenue was $1,153,028 for the nine months ended September 30, 2025, compared to $409,342 for the same period in 2024, representing an increase of approximately 182%. The substantial growth was primarily driven by revenue contributions from both service segments, Design and Build Services and Project Design and Management Services, as supported by new and ongoing projects. In contrast, the corresponding period in 2024 reflected lower revenue following the completion of our design and build project with CRCC - Kwan Lee - Paul Y. JV in early 2024, after which the Company did not secure any new contracts in this service segment for the remainder of that year.

In August 2024, we entered into a design services management agreement with Zenith (HK) for a total contract sum of HK$4,000,000 (approximately $513,000). Under this agreement, we provided technical design manpower services for the Sheung Shui Town Lot No. 263 (F0874), Kwu Tung North - Podium and Tower project. Our scope of work included deploying skilled technical personnel to support design development, project planning, coordination activities, and close collaboration with Zenith HK's internal team. This engagement marked a strategic shift toward service-based offerings that leverage our technical expertise while requiring less capital investment than traditional design and build contracts. The project was completed as scheduled in June 2025.

In addition, revenue for the quarter included contributions from a residential design, build, and project management engagement with an individual customer based in in Hong Kong, which commenced in January 2025, further expanding our service portfolio and reinforcing our presence in the region. Revenue recognized from this project during the nine months ended September 30, 2025 amounted to $924,974. We expect to complete this project by December 2025.

Cost of Revenue

Cost of revenue was $1,018,544 for the nine months ended September 30, 2025, compared to $349,179 for the same period in 2024, representing an increase of approximately 192%. The increase was directly attributable to the commencement and execution of new projects during the quarter, and is consistent with the corresponding growth in revenue. The higher costs primarily reflect the deployment of additional resources, including labor and subcontracted services, to support the expanded scope of operations across both our Design and Build Services and Project Design and Management Services segments.

Gross Profit

We achieved a gross profit of $134,484 for the nine months ended September 30, 2025, compared to $60,163 for the same period in 2024. The increase in gross profit was attributable to revenue contributions from a new design and build services project provided to an individual customer in Hong Kong.

General and administrative expenses ("G&A expenses")

General and administrative expenses were $889,451 for the nine months ended September 30, 2025, compared to $46,825 for the same periods in 2024. These expenses primarily include advertising and marketing expenses, business development, professional and consultancy fees, personnel related expenses, as well as costs incurred in connection with general operations of the Company. The significant increase in general and administrative expenses during the current period was primarily driven by the continued expansion of our subsidiaries, which resulted in higher operational and staffing costs. Additionally, the Company incurred substantial professional fees related to the business combination process, including legal, advisory, and due diligence expenses. These investments reflect the Company's strategic efforts to support growth initiatives and strengthen its operational infrastructure.

Income Tax Expense

We incurred income tax expense of $8,822 and $1,809 during nine months ended September 30, 2025 and 2024, respectively. The Company's subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits derived during the current period, after deducting a tax concession for the tax year.

Other expenses, net

This amount represents promissory note interest payable to our noteholders, net of bank and loan interest income earned during the period. The increase was primarily attributable to a higher level of outstanding promissory notes during the nine months ended September 30, 2024.

Net (loss) / profit

As a result of the above factors, the Company incurred a net loss of $765,591 and net profit of $4,060 for the nine months ended September 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

The following summarizes the key component of our cash flows for the nine months ended September 30, 2025 and 2024.

		Nine months ended September 30
		2025				2024
Net cash used in operating activities		$	(1,381,198	)		$	(205,536	)
Net cash used in investing activities		$	(55,072	)		$	(3	)
Net cash provided by / (used in) financing activities		$	1,061,845			$	(90,725	)
Net decrease in cash		$	(374,425	)		$	(296,264	)
Cash and cash equivalents, beginning of period		$	382,127			$	360,469
Cash and cash equivalents, end of period		$	7,702			$	64,205

Net Cash Used In Operating Activities

For the nine months ended September 30, 2025, net cash used in operating activities was $1,381,198. This significant outflow was mainly attributable to a net loss before tax of $756,769, an increase in accounts receivable of $44,872, an increase in amount due from an associate of $173,881, a decrease in accrued expenses and other payables of $284,951, a decrease in contract liabilities of $114,005 and an increase in amount due from related companies of $169,268. These were partially offset by an increase in accounts payable of $177,383.

In comparison, for the nine months ended September 30, 2024, net cash used in operating activities was $205,536, primarily driven by an increase in accounts receivable of $386,038, decrease in amount due to related companies of $256,660, an increase in contract assets including retainage of $23,320, partially offset by an increase in accounts payable of $192,444 and decrease in prepaid expenses and other current assets of $194,951.

Net Cash Used In Investing Activities

For the nine months ended September 30, 2025, net cash used in investing activities amounted to $55,072, primarily reflecting the purchase of equipment.

For the nine months ended September 30, 2024, net cash used in investing activities amounted to $3, representing the investment cost in the associate.

Net Cash Provided by / (Used in) Financing Activities

For the nine months ended September 30, 2025, net cash provided by financing activities totaled $1,061,845, mainly due to proceeds from share issuance of $1,069,230.

In comparison, for the nine months ended September 30, 2024, net cash used in financing activities was $90,725, primarily due to the increase in loan receivable.

Working Capital

As of September 30, 2025, our cash and cash equivalents amounted to $7,702, and our working capital was $382,670. As of December 31, 2024, we have cash and cash equivalents of $382,127 and working capital of $126,004. The increase in working capital was primarily attributable to the proceeds from share issuance, which totaled $1,069,230 during the nine months ended September 30, 2025.

Looking forward, we anticipate a significant increase in operating expenses as we execute our expansion strategy across multiple geographical markets. In particular, we expect higher business development, sales, and marketing expenditures as we focus on strengthening our customer base, pursuing new project opportunities, and broadening our sales network to enhance market penetration. In addition, we foresee increased professional and consultancy fees to support technical, legal, and strategic initiatives, alongside higher administrative costs arising from ongoing corporate restructuring efforts and the associated regulatory compliance and filing requirements. These planned investments are intended to position the Company for sustained revenue growth, although they may place increased demands on our working capital in the near term.

Going Concern

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital may include the sale of equity securities, which include common stock sold in private transactions and short-term and long-term debts. While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months.

We require additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These 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.

We expect to incur business development, sales and marketing, professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.

If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors would lose all of their investment.

Material Cash Requirements

We incurred loss of $765,591 for the nine months ended September 30, 2025 and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2025 to be significantly higher than 2024. As of September 30, 2025, we had an accumulated deficit of $3,615,322. Our material cash requirements are highly dependent upon the additional financial support from our major shareholders and external financing in the next 12 - 18 months.

We had the following contractual obligations and commercial commitments as of September 30, 2025:

Contractual Obligations		Total				Less than 1 year				1-3 Years				3-5 Years				More than 5 Years
		$				$				$				$				$
Account payables			233,155				233,155				-				-				-
Accrued expenses and other payables			35,049				35,049				-				-				-
Contract liabilities			35,566				35,566				-				-				-
Tax liabilities			64,320				64,320				-				-				-
Amount due to related companies			145,633				145,633				-				-				-
Notes payable			129,629				129,629				-				-				-
Total obligations			643,352				643,352				-				-				-

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our consolidated financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to consolidated financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our consolidated financial statements.

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Use of estimates and assumptions

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. If actual results significantly differ from the Company's estimates, the Company's financial condition and results of operations could be materially impacted. Significant estimates in the period include the revenue recognition, allowance for Expected Credit Losses and deferred tax valuation allowance.

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Basis of consolidation

The consolidated financial statements include the financial statements of International Endeavors Corporation, ModuLink Investment Limited and its subsidiaries and associated company for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.

Transactions involving entities under common control are accounted for using the merger accounting. The consolidated financial statements of the combining entities are presented as if the reorganization occurred at the beginning of the earliest reporting period presented. No gain or loss is recognized in the consolidated financial statements as a result of the reorganization. The historical financial information of all entities under common control is combined retroactively for all periods presented. The financial statements reflect consistent accounting policies and principles across all entities.

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Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

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Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, "Impairment or Disposal of Long-Lived Assets", all long-lived assets such as plant and equipment and intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the years presented.

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Revenue recognition

The Company derives a significant portion of revenues from contracts with its customers during the nine months ended September 30, 2025 and 2024, predominantly by performing design and building services and project design and management services for both public and private projects, with an emphasis on commercial and residential developments.

In accordance with ASC 606, Revenue From Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs.

Design and building services

Revenues derived from design and building services are recognized over time by using the cost-to-cost method to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company.as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers. Recognition of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and for measurement of progress toward completion. No material adjustments to a contract were noted during the nine months ended September 30, 2025 and 2024.

The Company reviews and updates the estimated total costs of the contracts at least annually. Revisions to contract revenue and estimated total costs of the contracts are made in the period in which the facts and circumstances that cause the revision become known and are accounted for as changes in estimates. Management believes the Company maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs.

Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are stated set out in Note 2(I) of International Endeavors Corporation of notes to consolidated financial statements for the years ended December 31, 2024 and 2023.

If at any time the costs to complete the contract are estimated to exceed the remaining amount of the consideration under the contract, then a provision is recognized.

Project design and management services

Revenues derived from design and management services are recognized over time by using percentage of completion certified by engineer to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers.

Sales of goods

Revenue from the sale of goods is recognized when control of the products is transferred to the customer, typically upon delivery, in an amount that reflects the consideration expected to be received, net of returns, discounts, and allowances.

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Income taxes

The Company adopted the ASC 740 "Income tax" provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

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Uncertain tax positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the nine months ended September 30, 2025 and 2024.

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Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

The reporting currency of the Company is United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong, and maintains its books and record in its local currencies, Hong Kong Dollars ("HKD") respectively, which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, "Translation of Financial Statement", using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in shareholders' equity.

Translation of amounts from HKD into US$ has been made at the following exchange rates for the nine months ended September 30, 2025 and 2024:

		September 30, 2025				September 30, 2024
Period-end HKD:US$ exchange rate			0.1282				0.1282
Average HKD:US$ exchange rate			0.1282				0.1282

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Comprehensive income

ASC Topic 220, "Comprehensive Income", establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in shareholders' equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

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Related parties

The Company follows the ASC 850-10, "Related Party Disclosures" for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

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Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company's financial assets and liabilities, such as cash and cash equivalents, prepaid expense and other current assets, accrued liabilities and other payables, accrued consulting service fee, amounts due to related parties and income tax payable approximate their fair values because of the short maturity of these instruments.

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Recent accounting pronouncements

In March 2022, the Financial Accounting Standards Board ("FASB") issued ASU No 2022-02, "Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures" ("ASU 2022-02"). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Except for expanded disclosures to its vintage disclosures, ASU 2022-02 did not have a material effect on the Company's current financial position, results of operations or financial statements.

In October 2023, the FASB issued ASU No 2023-06, "Disclosure Agreements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" ("ASU 2023-06"). ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC's regulations. The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.

In November 2023, the FASB issued ASU No 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 expands disclosures about a public entity's reportable segments and requires more enhanced information about a reportable segment's expenses, interim segment profit or loss, and how a public entity's chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.

In December 2023, the FASB issued ASU No 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This standard was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842). Effective Dates, which defers the effective date of Topic 326. As a smaller reporting Company, Topic 326 will now be effective for the Company beginning January I, 2023. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 4 70- 20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40). Accounting for Convertible Instruments and Contracts in an Entity 's Owner Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC Topic 260 on the computation of EPS for convertible instruments and contracts in an entity's own equity. An entity can use either a full or modified retrospective approach to adopt the ASU's guidance. As a smaller reporting Company, the Company is required to adopt this ASU for the fiscal year beginning January 1, 2024, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this ASU January 1, 2022 and it did not have a significant impact on its consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt- Modifications and Extinguishments (Subtopic 4 70-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging- Contracts in Entity's' Owen Equity (Subtopic 815-40) (ASU 2022-04). ASU 2022-04 updates current accounting guidance for modifications or exchanges of freestanding equity-classified written call options that remain equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. The ASU specifies that the effects of modifications or exchanges of freestanding equity-classified written call options that remain equity after modification or exchange should be recognized depending on the substance of the transaction, whether it be a financing transaction to raise equity (topic 340), to raise or modify debt (topic 470 and 835), or other modifications or exchanges. If the modification or exchange does not fall under topics 340, 470, or 835, an entity may be required to account for the effects of such modifications or exchanges as dividends which should adjust net income (or loss) in the basic EPS calculation. This guidance was effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is required to apply the amendments within this ASU prospectively to modifications or exchanges occurring on or after the effective date of the amendment. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, FASB issued ASU 2023- 09, Income Taxes (Topic 740). Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company's consolidated financial statements.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company's financial position, results of operations or cash flows.