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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

SUN Inc. (the "Company") was incorporated in the State of Wyoming on September 5, 2024. The Company is focused on the development and production of immersive virtual reality experiences and related digital media content. In addition, the Company provides audiovisual production, advertising, promotional, and consulting services associated with creative production and brand development.

The Company is currently in the early stage of development and continues to build its operational infrastructure, develop intellectual property, and expand revenue-generating activities.

Results of Operations

Six Months Ended April 30, 2026 Compared to Six Months Ended April 30, 2025

Revenue

Revenue for the six months ended April 30, 2026 was $16,151, compared to $54,500 for the six months ended April 30, 2025.

Revenue during the current period was primarily attributable to audiovisual production services, creative media production activities, advertising services, and consulting activities.

The decrease in revenue compared to the prior-year period was primarily attributable to the recognition of $50,000 of revenue under a partnership and advertising agreement during the prior-year period. No comparable revenue recognition event occurred during the current period.

Cost of Revenue

Cost of revenue for the six months ended April 30, 2026 was $4,500, compared to $0 during the comparable prior-year period.

Cost of revenue during the current period primarily consisted of editing, post-production, and other direct production costs associated with audiovisual production services.

Gross Profit

Gross profit for the six months ended April 30, 2026 was $11,651, compared to $54,500 during the comparable prior-year period.

The decrease in gross profit was primarily attributable to lower overall revenue levels during the current period and the inclusion of direct production costs associated with revenue-generating projects.

Operating Expenses

Operating expenses for the six months ended April 30, 2026 were $23,845, compared to $18,468 for the six months ended April 30, 2025.

The increase in operating expenses was primarily attributable to higher general administrative expenses, professional service fees, public company compliance costs, and interest expense associated with financing activities and ongoing operational development.

Operating expenses consisted primarily of:

	•	General and administrative expenses of $14,692 for the six months ended April 30, 2026, compared to $8,343 during the prior-year period, reflecting higher operational and administrative costs.
	•	Advertising and marketing expenses of $1,090 during the current period, compared to $7,500 during the prior-year period.
	•	Professional services expenses of $2,813 during the current period, primarily related to legal, accounting, compliance, and consulting services.
	•	Other operating expenses were $5,250 for the six months ended April 30, 2026, compared to $2,625 for the comparable prior-year period. The increase was primarily attributable to costs associated with the Company's financing and operating activities during the current period.

Net Income (Loss)

The Company reported a net loss of $12,194 for the six months ended April 30, 2026, compared to net income of $36,032 during the comparable prior-year period.

The decrease in results of operations was primarily attributable to lower revenue levels, increased operating expenses, and higher financing-related costs during the current period.

Liquidity and Capital Resources

As of April 30, 2026, the Company had cash and cash equivalents of $63, compared to $8,856 as of October 31, 2025.

Net cash provided by operating activities for the six months ended April 30, 2026 was $11,207, compared to net cash used in operating activities of $18,895 during the comparable prior-year period.

The improvement in operating cash flow was primarily attributable to related-party advances and working capital adjustments during the current period.

During the six months ended April 30, 2026, the Company received $16,927 in additional advances from related parties, a portion of which was used to support operating activities, public company compliance costs, and deferred offering-related expenses associated with DTC eligibility and market preparation activities.

As of April 30, 2026, the Company had total liabilities of $144,930, including $70,000 related to a long-term business loan and $39,086 related to long-term related-party advances.

The Company continues to operate with limited working capital and relies on a combination of operating revenues, related-party advances, and external financing to support ongoing operations.

Plan of Operations and Funding

Over the next twelve months, the Company intends to continue developing immersive virtual reality experiences and expand its audiovisual production, creative media, promotional, and consulting activities.

The Company plans to continue focusing on the development of proprietary immersive media projects, virtual reality content, and related digital media assets, while also pursuing revenue-generating opportunities through audiovisual production services, promotional services, and creative consulting engagements.

The Company also maintains strategic investments related to immersive media development projects, which management believes may support future business opportunities.

The Company expects that working capital requirements will continue to increase as it develops operations, supports public company compliance obligations, and expands business activities.

Management expects that working capital requirements will continue to be funded through a combination of operating revenues, related-party advances, equity financings, and debt financing arrangements, if available.

There can be no assurance that additional financing will be available on acceptable terms, or at all. If adequate financing is not available, the Company may be required to reduce operational activities, delay development projects, or limit expansion initiatives.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its financial condition, results of operations, liquidity, capital expenditures, or capital resources.

Going Concern

The independent auditor's report accompanying the Company's financial statements for the fiscal year ended October 31, 2025 included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern.

The Company continues to rely on financing from related parties and third-party lenders to support operations and working capital requirements.

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Management intends to address liquidity needs through a combination of operating revenues, related-party advances, and potential equity or debt financing arrangements. However, there can be no assurance that additional financing will be available on acceptable terms, or at all.