Annual Report for Fiscal Year Ending September 30, 2025 (Form 10-K)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements included elsewhere in this annual report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include, among others, those listed under "Special Note Regarding Forward-Looking Statements" and "Risk Factors" and those included elsewhere in this annual report.

Overview

Collab Z Inc., through its subsidiary, Collab CA LLC, has developed its pioneering Collab Platform, a first-of-its-kind Community-Based Property Management model that is designed to replace traditional property management practice by enabling community involvement and by leveraging modern technology, including artificial intelligence features currently under development. Our approach actively involves tenants and other skilled community members in the management process, handling leasing and daily operations in a way that minimizes conflicts of interest and improves tenant satisfaction. With a four-year lead over new market entrants and the ability to scale instantly without local staffing, Collab Z uniquely positions itself against both traditional property management firms and SaaS-based ProTech competitors.

Our mission is to democratize property management and to foster a more engaged community of tenants, property owners, and professional service providers to maximize asset value and to create a sustainable, decentralized organization that benefit all stakeholders involved.

Our vision is to revolutionize the real estate sector by maximizing community engagement in their living and working spaces for an autonomous and collaborative living experience.

We are committed to innovation, focusing on delivering substantial long-term value to our shareholders and improving the quality of life for our property owners, tenants, Community Pros, or CPs, and professional service providers. As we expand, our Collab Platform will continue to lead the shift towards a more connected and engaged property management ecosystem.

Collab Z's fiscal year ends September 30^th.

Components of Results of Operations

Revenue

The Company earns revenue from the following streams:

Property Management

The Company provides property management services for rental properties that include various elements based on the underlying contractual agreement. The Company earns a fixed percentage of monthly lease income. This revenue is recognized on an ongoing, monthly basis. The Company earns additional fees based on a fixed percentage of property-related expenses such as repairs and maintenance at the time the underlying costs are incurred. The Company, at times, is also eligible to earn commissions on the first month of a new lease agreement. Certain managed properties include a profit share arrangement based on guaranteed rental income whereby the Company shares in the excess rental income over the guaranteed amounts. No losses have been incurred based on these guarantees. The Company recognizes this revenue at the point in time the excess rental income is known. The Company recognizes this revenue monthly, when the profit share information becomes known.

Development and Construction Management

The Company provides services consisting of the oversight of property development and construction projects, including budget monitoring and timeline management. Development fees are recognized on an ongoing monthly basis through the completion of the service period.

Procurement

The Company facilitates procurement of materials and supplies for construction projects, particularly from international sources. Procurement fees are recognized at a point in time upon the completion of the procurement service, which is shipment of the related materials.

Renovation Management

Renovation management services include assisting in the acquisition, renovation, and disposition of properties. Renovation fees are recognized on an ongoing, monthly basis through the completion of the service period, which is based on the time elapsed of the renovation project. The Company also earns renovation service fees, which are recognized over time as the project progresses based on the actual costs incurred of the underlying renovation project. Acquisition and disposition fees are recognized at a point in time after the acquisition of the property.

EB-5 Immigration Investor Services

The Company identifies EB-5 immigration investment projects and assists investors with project identification, assistance and support during the project application process. Fees are recognized at a point in time upon the fulfillment of the EB-5 service obligations, which is when the EB-5 application package has been submitted. Payments are typically billed in two tranches, and any deferred revenue is recognized once performance obligations are met.

Consulting Services

The Company provides other real estate consulting services to both related and third parties that are defined by respective service agreements. Consulting services may include terms whereby there are a set of deliverables required for which revenue will be recognized over time as the deliverables are satisfied. Each contract is assessed for performance obligations. There is generally no right of return or refund related to these services.

Cost of Revenue

Cost of revenue includes operations personnel supporting the Company's real estate services, specifically those personnel who work directly on property management as well as development, construction, renovation and EB-5 projects. Cost of revenue also includes software costs incurred to maintain the Company's property management system, as well as amortization of capitalized software costs.

Operating Expenses

Sales And Marketing

Our sales and marketing costs consists primarily of salaries and other related costs for business development personnel and advertising and marketing costs. We expect that our sales and marketing expense will increase significantly on an absolute dollar basis and vary from period-to-period as a percentage of revenue for the foreseeable future as we focus on building out our third-party customer facing organization and expanding our brand.

General and Administrative Expense

Our general and administrative expenses consist primarily of salaries and other related costs for personnel in our executive, finance, corporate development and administrative functions. General and administrative expense also includes professional fees for legal, accounting, information technology, travel, insurance, software costs and expenses related to our operations at our headquarters, including rent.

We expect that our general and administrative expense will increase on an absolute dollar basis and vary from period-to-period as a percentage of revenue for the foreseeable future as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business. We expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services, costs related to compliance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and exchange listing standards, higher director and officer insurance costs, and investor and public relations costs.

Other Income (Expense)

Other income (expense) primarily includes interest expense on the Company's debt, as well as interest income earned and income (loss) on joint ventures.

Results of Operations

Comparison of Years Ended September 30, 2025 and 2024

The following table sets forth key components of our results of operations for the years ended September 30, 2025 and 2024, both in dollars and as a percentage of our net revenues.

		Year Ended September 30,
		2025								2024
		Amount				% of revenues				Amount				% of revenues
Revenue - related parties		$	893,628				65	%		$	1,163,585				63	%
Revenue - other			484,521				35	%			690,000				37	%
Total revenue			1,378,149				100	%			1,853,585				100	%
Cost of revenue			412,783				30	%			219,283				12	%
Gross profit			965,366				70	%			1,634,302				88	%
Operating expenses:
Sales and marketing			77,642				6	%			47,874				3	%
General and administrative			1,003,035				73	%			622,401				34	%
Total operating expenses			1,080,677				78	%			670,275				36	%
Income (loss) from operations			(115,311	)			-8	%			964,027				52	%
Other income (expense):
Interest income			36,685				3	%			-				N/A
Interest expense			(22,352	)			-2	%			(13,607	)			-1	%
Loss on joint ventures			(8,647	)			-1	%			-				N/A
Other income			7,430				1	%			-				N/A
Total other income (expense)			13,116				1	%			(13,607	)			-1	%
Provision for income taxes			-				0	%			-				0	%
Net income (loss)		$	(102,195	)			-7	%		$	950,420				51	%

Revenue

Related party revenue decreased by $269,957 for the year ended September 30, 2025 to $893,628 as compared to $1,163,585 in the prior year. The decrease was due to a decrease in procurement revenue of $188,480, a decrease of renovation management fees of $252,814 and a decrease in property management fees of $31,779 partially offset by an increase in development and construction management fees of $52,463 and an increase in consulting services of $150,653.

Other revenue was $484,521 for the year ended September 30, 2025, consisting of consulting fees performed and property management services to third parties. In 2024, the Company generated revenue of $690,000 for EB-5 services. There was no similar services in 2025.

Cost of Revenue

Cost of revenue was $412,783 for the year ended September 30, 2025 as compared to $219,283 in 2024. The increase was primarily due to a full year of amortization of capitalized software development costs of $53,333 incurred in 2025. Lastly, in 2025 the Company expanded its system maintenance costs, which are included in cost of revenue. The Collab platform was not operational until August 2024, thus the 2024 period does not have amortization or system maintenance costs included in cost of revenue.

Sales and Marketing

Sales and marketing expenses increased by $29,768 for the year ended September 30, 2025 to $77,642 as compared to $47,874 in the prior period. This increase was primarily due to higher personnel costs assisting with business development.

General and Administrative

General and administrative expenses increased by $380,634 for the year ended September 30, 2025 to $1,003,035 as compared to $622,401 in the prior year. This increase was primarily due to higher personnel costs and professional services as we expanded our operations, increased headcount and incurred professional costs in connection with our contemplated initial public offering.

Other Income (Expense)

Other income (expense) was $13,116 and ($13,607) for the years ended September 30, 2025 and 2024, respectively. which primarily consisted of interest expense on the Company's outstanding line of credit, offset by interest income in 2025 from a note receivable. In 2025, the Company had a loss on joint ventures of $8,647.

Net Income (Loss)

Net loss was $102,195 for the year ended September 30, 2025 as compared to a net income of $950,420 for the prior year. The decrease of $1,052,615 was primarily due to increased operating expenses in 2025 and a decline in revenue from EB-5 services.

Liquidity and Capital Resources

Our principal liquidity requirements are for working capital, business development and system development. We historically funded our liquidity requirements primarily through cash on hand, cash flows from operations, proceeds from related parties and debt and equity financings.

The accompanying 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 had $161,506 in cash as of September 30, 2025, and $650,157 in amounts due from related parties. The Company is heavily reliant on related parties as its primary revenue and cash flow sources and has historically generated revenues from sources that may not be recurring.

The Company is in its early-stage and expects to incur significant costs to expand its operations and conduct its business plan, which may result in future losses if it cannot effectively market its products and achieve market acceptance.

Management's Plans

We believe substantial doubt has been alleviated for a period of at least 12 months from the date the financial statements are issued based on the following:

The net due to and from related parties' balances at September 30, 2025, which are expected to be fully collected and paid, provide for a net positive effect to cash of approximately $0.6 million. In addition, third party receivables and the note receivable are expected to be paid and create cash inflows of $0.7 million in aggregate. These funds are expected to provide the Company with operating capital sufficient to cover basic operations while the Company makes efforts to increase revenue and maintain cost management to make operations more profitable and sustainable. Lastly, the Company is seeking to raise capital via an equity offering. In the event the Company does not complete an offering, the Company expects to seek additional funding through private equity offering, debt and/or related party financings to provide additional operating capital. The Company may not be able to obtain financing on acceptable terms, or at all.

Cash Flows

Liquidity activity is shown for the year ended September 30, 2025 and 2024. The following is a summary of the Company's cash flows provided (used in) operating, investing, and financing activities:

		Year Ended
		September 30,
		2025				2024
Net cash provided by operating activities		$	71,281			$	1,257,920
Net cash provided by (used in) investing activities			1,611,281				(2,619,677	)
Net cash provided by (used in) financing activities			(1,626,090	)			1,450,878
Net change in cash		$	56,472			$	89,121

Net Cash Provided by Operating Activities

Cash provided by operating activities was $71,281 for the year ended September 30, 2025 as compared to $1,257,920 for the prior year. Cash provided during the year ended September 30, 2025 was primarily due to cash provided by operating assets and liabilities of $75,496, non-cash charges of $97,980, and partially offset by our net loss of $102,195. Cash provided during the year ended September 30, 2024 was primarily due to our net income of $950,420, non-cash charges of $173,521 and cash provided by operating assets and liabilities of $133,979.

Net Cash Provided by (Used in) Investing Activities

Cash provided by (used in) investing activities was $1,611,281 for the year ended September 30, 2025 as compared to ($2,619,677) for the prior year. Cash provided during the year ended September 30, 2025 was primarily due to the receipt from related parties of $2,173,456, repayment of loan receivable of $954,625, and $53,600 in distributions from joint ventures, partially offset by the issuance of loan receivable of $1,470,000 and a software capitalization of $100,400. Investing activities in 2024 were primarily due to net advances to related parties of $2,459,677, which included $2,259,850 in advances to YRQ Irrevocable Trust for the purpose of providing YRQ's working capital requirements. The Company also incurred capitalized software development costs of $160,000 in 2024.

Net Cash Provided by (Used in) Financing Activities

Cash provided by (used in) financing activities was $(1,626,090) and $1,450,878 for the years ended September 30, 2025 and 2024, respectively. Cash used in financing activities for the year ended September 30, 2025 included $642,854 in net repayments of a line of credit, $1,288,311 in net repayments to related parties, $344,925 in capitalized deferred offering costs, partially offset by $650,000 in proceeds from issuance of preferred stock. During 2024, the Company received $1,080,800 in net advances from related parties, $2,442,854 in proceeds from the Company's revolving line of credit, $168,435 in member contributions, partially offset by line of credit repayments of $1,800,000 and member distributions of $441,211.

Debt

Revolving Line of Credit

On March 14, 2024, the Company entered into a revolving line of credit agreement with East West Bank for a principal amount of $2,000,000. The loan was to matured on March 14, 2026, was secured by an assignment of a deposit account held by Collab CA's former member, YRQ Irrevocable Trust, and was intended exclusively for business operations. The loan had a variable interest rate based on the interest rate of the collateral's certificate of deposit plus 1.5%. The initial rate was set at 5.905%. The loan required monthly interest payments, and full repayment of principal and accrued interest due at maturity.

During the year ended September 30, 2025, the Company borrowed an aggregate of $1,300,000, which was used to provide a loan to a third party (see Note 4). As of December 31, 2024, the outstanding balance of the line of credit was $1,942,854. On February 4, 2025, the Company paid off the line of credit with the funds from the collection of the Company's due from related parties and receivables. As a result, the line of credit was closed prior to its contractual maturity date, and no amounts were outstanding or available under the facility as of September 30, 2025.

Future Equity Obligations

In April 2023, the Company entered into a SAFE agreement for proceeds of $25,000 with an investor. The SAFE has a valuation cap of $50,000,000 and a discount of 25%, which will be applied to the valuation of the Company at the time of the triggering event in order to calculate the price per share for the investor.

The SAFE will convert into equity upon the occurrence of a future qualified financing round of at least $10,000,000 or another triggering event, including the event of a merger, acquisition or initial public offering ("IPO"). The SAFE will convert into an amount of shares undeterminable until an offering price four IPO is established. We expect to issue 8,333 shares of common stock to the investor at a 25% discounted price of $3.00 per share assuming a public offering price of $4.00.

As of September 30, 2025 and September 30, 2024, the fair value of the SAFE was $25,000 and $25,000, respectively. See Note 5 for fair value disclosures.

Due to Related Parties

Due to related parties includes cash advances received from various related parties. These advances are unsecured, due on demand and non-interest bearing. As of September 30, 2025 and 2024, the amounts outstanding were $16,605 and $1,304,916 respectively.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting standards in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this annual report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

We believe our most critical accounting policies and estimates relate to the following:

Revenue Recognition

The Company recognizes revenue from services in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). Under ASC 606, the Company recognizes revenue when or as the Company's performance obligations are satisfied by transferring control of the promised services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps as prescribed by ASC 606:

(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 performance obligations.

The Company only applies the five-step model to contracts when it is probable that it will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, the performance obligations in each contract and whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company has applied ASC 606 on a portfolio basis. The Company has elected the practical expedients, allowing the recognition of incremental costs of obtaining a contract as an expense when incurred, and not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

Stock-Based Compensation

We record stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employee's required service period, which is generally the vesting period.

Related Parties

Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. The Company discloses related party transactions that are outside of normal compensatory agreements, such as salaries. There were no related party transactions during the year other than normal compensatory arrangements, consistent with the prior year. The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Common Stock Valuations

An "established trading market" for the Company's common stock does not exist. In 2024, the fair value of the shares of common stock was determined based on public company comparables, specifically microcap companies in similar industries including PropTech and technology platform services. The Company then applied a discount factor accounting for the private to public discount and minority interest discount, which was estimated using comparable valuations. In 2025, the Company considered the planned go-public transaction and the estimated price, as well as Series B preferred shares sold near year end, and estimated the accretion of value over the period until estimated IPO to estimate the fair value of common stock.

Following the completion of our contemplated initial public offering, the fair value of our common stock will be based on the closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued and adopted accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 to our consolidated financial statements appearing at the end of this annual report.

Off-Balance Sheet Arrangements

The Company has a minimum rental guarantee for certain related party managed properties whereby the Company will pay the difference between the collected rent and the minimum rent guarantee. These guarantees require the Company to ensure a specified minimum gross revenue each month. Should the properties' gross revenues fall below these thresholds, the Company is required to compensate for the shortfall. The maximum potential amount of future payments under these guarantees is estimated based on historical occupancy rates and market trends to project potential future shortfalls. The minimum rent guarantee thresholds are calculated annually based on the local market occupancy rates and prevailing market rental rates. The minimum rent guarantee terms are stipulated to last for the duration of the property management agreements unless terminated by either party or amended by mutual consent. These agreements can be terminated by either party by providing 30 days' notice.

As of the issuance date of these consolidated financial statements, the maximum potential rental guarantees were approximately $102,000 per month. Since entering into these terms, the Company has achieved occupancy rates at all properties at or above market rental rates. As such, there have been no shortfall payments incurred by Collab Z to date.

During the periods presented, we did not have, nor do we currently have, any other off-balance sheet arrangements as defined under SEC rules.

Implications of being an Emerging Growth Company

We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As such, we are eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not "emerging growth companies" including, but not limited to:

●

being permitted to present only two years of audited financial statements and only two years of related disclosure in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this annual report;

●

being permitted to provide less extensive narrative disclosure than other public companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;

●

being permitted to utilize exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved;

●

being permitted to defer complying with certain changes in accounting standards; and

●

being permitted to use test-the-waters communications with qualified institutional buyers and institutional accredited investors.

We have taken advantage of certain reduced reporting requirements in this annual report. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

An emerging growth company can also take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use this exemption from new or revised accounting standards during the period in which we remain an emerging growth company; however, we have and may adopt certain new or revised accounting standards early.

We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our securities pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal year following the fifth anniversary of the date of the first sale of our securities pursuant to an effective registration statement under the Securities Act.

Smaller Reporting Company

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than $700 million as of the last trading day of our second quarter and our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million as of the last trading day of our second quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of the last trading day of our second quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For example, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.