Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes thereto, which are included in "Item 8. Consolidated Financial Statements and Supplementary Data" of this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Forward-Looking Statements," above.

Organizational Overview

Together with our wholly owned crew management subsidiaries, we are a crewing and crew management company responsible for sourcing, recruitment, selection, deployment, scheduling, training, and on-going management of seafarers. Our services also include administrative functions related to crew management services, including payroll services, travel arrangements, and verifying the insurance coverage information of all onboarded seafarers. We benefit from over 65 years of the combined experience of Stavros Galanakis and. Konstantinos Galanakis in various value adding activities of the shipping sector such as ship management, technical management, ship agency, crewing and crew management.

Through the crew management platform developed by our affiliate, Seatrix, our personnel can collaborate with many different cultures in many different time zones with ever rising complexities, presenting a uniform service level to our principals, regardless of the point of origin of the crew. This innovation allows us to hire junior operators, who after a short training procedure are able to serve our principals with high quality standards, helping Elvictor be cost effective while maintaining the highest possible service level.

We currently manage over 2,000 seafarers of ten different nationalities who are aboard seven different ship types.

We expanded our services by providing ship management services when we acquired Ultra Shipmanagement from Stavros Galanakis and Konstantinos Galanakis for that purpose, which has received its Det Norske Veritas AS approved Interim Document of Compliance provided under the authority granted by the Government of the Republic of the Marshall Islands, and we have also employed specialized personnel. The Interim Document of Compliance is the license required for a ship management company to start providing its services.

Results of Operations

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the notes to our consolidated financial statements. Those material accounting estimates that we believe are the most critical to an investor's understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates.

Plan of Operations

In order to meet business goals, we must (a) execute effectively our current business of crew management; and (b) continue to focus on new business development in order to acquire new agreements.

In order to raise sufficient funds to proceed with the implementation of our business plan, we may have to find alternative sources of funds, like a second public offering, a private placement of securities, or loans from third parties (such as banks or other institutional lenders). Equity financing could result in additional dilution of the existing shareholders. If we are unable to meet our needs for cash from either the money that we raise from private placements, or possible alternative sources, then we may be unable to continue to maintain, develop or expand our operations.

Results of Operations

Revenues and Cost of Revenues

For the years ended December 31, 2025, and December 31, 2024, we generated $2,427,968 and $2,421,308 in revenues, respectively, representing an increase in revenue of $6,660, or 0.3%, which is mainly attributable to an increase in fees such as agency and allotment fees.

For the years ended December 31, 2025, and December 31, 2024, we incurred $622,745 and $552,739 in costs of revenues, respectively, representing an increase in cost of revenues of $70,006, or 12.7%, which is primarily attributable to the increased revenue of the Company along with increased costs due to inflationary pressures.

Operating Expenses

For the years ended December 31, 2025, and December 31, 2024, we incurred $2,014,960 and $1,691,050 in operating expenses, respectively, representing an increase in operating expenses between the two years of $323,910, or 19.1%. The increase in operating expenses in 2025 is mainly due to the increase in salaries and higher professional fees. For the year ended December 31, 2025, salaries totaled $1,256,420, as compared to $1,061,610 for the year ended December 31, 2024, an increase of $194,810, or 18.4%.

Net Income (Loss)

For the years ended December 31, 2025, and December 31, 2024, we recorded a net loss of $175,719 and net income of $199,780, respectively, representing a deterioration in net income of $375,499 between the two years. This negative shift is primarily due to increased operating expenses, in particular higher salaries and professional fees, which outpaced the modest growth in revenues.

Liquidity, Capital Resources, and Off-Balance Sheet Arrangements

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had a working capital deficit during the year ended December 31, 2025, of $512,958 compared to a deficit of $481,912 for the year ended December 31, 2024, which is calculated as current assets minus current liabilities.

Cash flows for the year ended December 31, 2024

Net cash provided by operating activities was $418,351 for the year ended December 31, 2025, compared to net cash used in operating activities of $583,519 during the year ended December 31, 2024.

Net cash used in investing activities was $28,466, for the purchase of office equipment and software, compared to $14,738 for the year ended December 31, 2024.

Net cash provided by financing activities was Nil for the years ended December 31, 2025, and December 31, 2024.

Cash Requirements

We require additional capital to implement our business development and fund our operations.

Since the inception of our crew management business, we have funded our operations primarily through equity financings and we expect that we will continue to fund our business through the equity and debt financing, either alone or through strategic alliances. Additional funding may not be available on favorable terms, if at all, which could harm our business plans, financial condition and operating results. We intend to continue to fund our business by way of equity or debt financing along with the revenues that can support the Company. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

Contractual Obligations

As of January 1, 2026, our obligations and commitments to make future payments under a lease agreement that the Company pays on behalf of its subsidiaries, Elvictor Group Hellas and Ultra Shipmanagement, is $237,093 with $51,752 payable for the year of 2026, and $185,341 payable during the following years until 2030.

Going Concern

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred substantial operating losses for the year ended December 31, 2025 and, as discussed in the Report of Independent Registered Public Accounting Firm, these conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of twelve months from the date these financial statements are issued.

In response to these conditions, management has developed and is actively executing a plan intended to alleviate substantial doubt. The principal elements of management's plan are as follows:

(i)

Revenue Growth:During the first quarter of 2026, the Company executed nine new crew management contracts with a reputable shipping client, with billing commencing in Q1 2026. These contracts are expected to represent a material improvement to the Company's revenue base. Management continues to actively pursue additional contracts with creditworthy counterparties that are expected to further strengthen the Company's revenue trajectory during the twelve-month assessment period.

(ii)

Cost Rationalization:The Company is implementing an operational enhancement program leveraging artificial intelligence tools, expected to result in a meaningful reduction in operating costs beginning in the second half of 2026.

(iii)

Balance Sheet and Liquidity Position:As of the date of issuance of these financial statements, the Company carries no debt obligations. Management believes this debt-free capital structure materially reduces the risk of a near-term liquidity shortfall.

(iv)

Additional Capital:Management is actively pursuing additional capital through equity and other financing arrangements. The proceeds of any such capital raise are intended to diversify the Company's revenue base, through the expansion into new geographical markets and broadening of the Company's portfolio of services, enhance working capital, and further reduce the risk of liquidity shortfall during the twelve-month period following the issuance of these financial statements.

While management believes the foregoing plans are reasonable and achievable, there can be no assurance that these plans will be successfully executed or that the Company will generate sufficient revenues or obtain sufficient capital to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Outlook

The shipping industry and especially the crew management segments will likely continue to face increasing pressures, due to residual impacts from the COVID-19 pandemic, in addition to continued geopolitical instability related to the Ukraine conflict and the Red Sea crisis. According to the International Chamber of Shipping (the "ICS"), which represents approximately 80% of the worlds' merchant fleet, Ukrainian and Russian seafarers make up 14.5% of the global shipping workforce, with 198,123 Russian seafarers and 76,442 Ukrainians.

In connection with shipping industry pressures, ICS secretary general Guy Platten said: "The conflict in Ukraine is having a significant impact upon the safety and security of seafarers and shipping in the area. As with COVID, seafarers are being exposed to issues not of their making. Multiple ships have been hit by munitions, seafarers have been killed and injured and seafarers of all nationalities are trapped on ships berthed in ports. It is of the utmost urgency that their evacuation from these areas of threat should be ensured by those States with the power to do so. The impact upon innocent seafarers and their families cannot be underestimated."

Our management team is assessing alternative plans to mitigate potential challenges arising from the ongoing war in the Ukraine, among other things.

The impact of the conflict involving Iran, the United States, and Israel, which has disrupted maritime traffic through the Strait of Hormuz and the Persian Gulf, contributed to sharp increases in energy prices and war risk insurance premiums, and resulted in direct threats to commercial vessels and seafarers operating in the region; the conflict has also prompted the Houthis to resume attacks on commercial shipping in the Red Sea and Gulf of Aden, further compounding operational risks and rerouting costs for vessels serving our clients. Our management monitors closely the situation and is ready to proceed to all required actions in order to safeguard our operations and revenue.

The demand for our services depends on the demand for maritime shipping services which are subject to normal economic cycles affecting the general economy including the effect of increased inflation. Inflationary pressures may result in material increases to our operating costs that we may not be able to fully transfer to our clients thus affecting our potential profitability. Additionally, increase in operating costs of our clients may lead to delays in payments for our services and accumulation of bad debt, although we closely monitor their credit behavior to avoid such incidents. Additionally, significant deteriorations of economic conditions over a prolonged period could produce a material adverse effect on the demand for our services.