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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2025

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

Basis of presentation and principle of consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of September 30, 2025, and results of operations and cash flows for the nine months ended September 30, 2025 and 2024. The consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by the U.S. GAAP. Results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, and related notes included in the Company’s audited consolidated financial statements.

These unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

Use of estimates and assumptions

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Significant estimates required to be made by management include, but not limited to, contract liabilities — return allowances, contract liabilities — warranty provision, allowance for expected credit losses, determination of the useful lives of long-lived assets, impairment of long-lived assets, inventory valuation allowance, valuation allowance for deferred tax assets, recognition and measurement of operating lease right-of-use assets and operating lease liabilities. Actual results could differ from the estimates, and as such, differences could be material to these unaudited condensed consolidated financial statements.

Cash and cash equivalents

Cash and cash equivalents includes balances maintained with banks and digital payments company in the United States which are unrestricted and immediately available for withdrawal and use.

Accounts receivable, net

Accounts receivable includes trade accounts due from customers. The credit terms given to customers are generally 30 days. Management reviews its receivables on a regular basis to determine if the allowance for expected credit loss is adequate and makes allowance for expected credit loss when necessary. The allowance for expected credit loss is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance for expected credit loss after all means of collection have been exhausted and the likelihood of collection is not probable. As of September 30, 2025 and December 31, 2024, the balance of allowance for expected credit loss were $420,634 and $302,243, respectively.

Prepayments and other assets, net

Prepayments and other assets consist of other receivables and prepaid expenses, including advances to a vendor for consignment goods, rental deposits, prepaid insurance and prepaid office supplies. The Company reviews other receivables on a regular basis and also makes specific allowance if there is strong evidence indicating that other receivables are likely to be unrecoverable. As of September 30, 2025 and December 31, 2024, the balance of allowance for expected credit loss against prepayments and other assets were $121,300 and $249,266 respectively.

Inventories, net

Inventories, consisting of products available for sale, are accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. The Company periodically reviews inventories for potential impairment and adjusts inventory for potentially excess or obsolete goods to state inventories at their net realizable value. As of September 30, 2025 and December 31, 2024, inventory valuation allowance, representing a write-down of inventory, were $340,432 and $56,658, respectively.

Leases

On January 1, 2021, the Company adopted ASU No. 2016-02, Leases (Topic 842), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.

The Company is a lessee of non-cancellable operating leases for corporate office and warehouse premises. The Company determines if an arrangement is a lease at inception. A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Company’s unaudited condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term.

When determining the lease term, at lease commencement date, the Company considers options to extend or terminate the lease when it is reasonably certain that it will exercise or not exercise that option. The interest rate used to determine the present value of future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date.

The lease standard (ASC 842) provides practical expedients for an entity’s ongoing accounting. The Company elects to apply short-term lease exception for leases with a lease term of 12 months or less at commencement. Accordingly, ROU assets and operating lease liabilities do not include leases with a lease term of 12 months or less.

The Company also elects to adopt the practical expedient that allows lessee to treat the lease and non-lease components of a lease as a single lease component. Non-lease components include building management fees, utility expenses and property taxes included and payable in the lease contract. These non-lease components are not separated from the lease components to which they relate.

The Company evaluates the impairment of its ROU assets consistently with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the assets from the expected undiscounted future pre-tax cash flows of the related operations. As of September 30, 2025 and December 31, 2024, the Company did not recognize any impairment loss against its ROU assets.

Plant and equipment, net

Plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is provided using the straight-line method based on the estimated useful life. The estimated useful lives of plant and equipment are as follows:

Automobiles		5 years
Equipment		7 years
Forklift		7 years
Racks		7 years

Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive income under other income or expenses.

Impairment of long-lived assets

The Company reviews long-lived assets, including plant and equipment and ROU assets, 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 measured by a comparison of the carrying amount of an asset to the undiscounted future pre-tax cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is generally determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As of September 30, 2025 and December 31, 2024, no impairment of long-lived assets was recognized.

Deferred IPO costs

Deferred IPO costs consist of costs incurred in connection with the Company’s planned initial public offering in the United States. These costs, together with the underwriting discounts and commissions, will be charged against the gross proceeds of the offering as a reduction of additional paid-in capital upon completion of the planned initial public offering or charged to unaudited condensed consolidated statements of operations and comprehensive income if the planned initial public offering is not completed.

Revenue recognition

The Company adopted ASC 606 “Revenue Recognition.” It recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company recognizes revenue based on the consideration specified in the applicable agreement.

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the company satisfies a performance obligation.

Generally, revenues are recognized when the Company has negotiated the terms of the transaction, which includes determining either the overall price, or price for each performance obligation in the form of a service or a product, the service or product has been delivered to the customer, no obligation is outstanding regarding that service or product, and the Company is reasonably assured that funds have been or will be collected from the customer.

A summary of each of the Company’s revenue streams under ASC 606 is as follows:

Wholesale income, net

The Company enters into distinct agreement with wholesale customers to sell lighting and other automotive parts where the rights of the parties, including payment terms, are identified. Sales prices to wholesale customers are fixed with no sales rebate, discount or other incentive. The Company typically provides one-month sales return policy and a one-year warranty to wholesale customers. The Company estimates return allowances based on historical experience while the warranty covers defects in parts, materials and workmanship.

The Company assesses that delivery of goods to wholesale customers as one single performance obligation. Revenue is recognized at a point in time when goods are collected by third-party carriers where control of goods is transferred to customers under FoB term. The Company collects no deposit upfront and typically provide a credit terms of 30 days and the accounts receivable will be collected by the Company according to credit period policy applicable to different customers. The Company assesses that there is no significant financing component in these contracts.

The Company purchases inventories from suppliers in batches without goods return clause and credit period from suppliers are typically 1 month after goods delivery. Accordingly, the Company is subject to inventory risk before control of the goods has been transferred to customers. Besides, the Company has full discretion in establishing selling price. The Company is therefore a principal in these transactions and records revenue at gross amount net of sales taxes and estimated sales returns.

Online retail sales income, net

The Company sells lighting and other automotive parts to retail customers via e-commerce platforms including Amazon and eBay. Customers enter into agreement with the Company online. Sales prices to retail customers are fixed with no sales rebate, discount or other incentive. The Company typically provides one-month sales return policy to retail customers. The Company estimates return allowances based on historical experience.

The Company assesses that delivery of goods to retail customers as one single performance obligation. Revenue is recognized at a point in time when goods are collected by third-party carriers where control of goods is transferred to customers under FoB term. The Company collects full amount upfront when retail customers place order online. The Company assesses that there is no significant financing component in these contracts.

Agency income

The Company enters into agency agreements with another automotive parts companies to sell their products. The Company acts solely as an agent and does not assume primary responsibility for selling the products. Sellers retain control and legal title over consignment inventories, and they have discretion in setting selling price. Accordingly the Company determines that it acts solely as an agent in these transactions and recognizes agency income on a net basis. These agreements are fixed-price and have no variable consideration. The Company accesses that delivery of goods to end customer is a single performance obligation and recognizes agency income at a point in time upon delivery of goods to end customers. The Company typically collects accounts receivable from agency income monthly. The Company assesses that there is no significant financing component in these contracts. On June 30, 2025, the Company terminated the agency agreements, and no agency income has been generated from July 1, 2025.

Fulfillment service income

The Company provides fulfillment services to other automotive parts companies which includes warehousing, inventory management, picking, packing, and order preparation services. The Company enters into distinct agreement with its customers. These agreements are fixed-price and have no variable consideration. The Company recognizes fulfillment service income at a point in time when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier where control of goods is transferred to customers. The Company typically collects accounts receivable from fulfillment service income monthly. The Company assesses that there is no significant financing component in these contracts.

Contract liabilities

Contract liabilities — Return allowances

Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances were $353,822 and $316,979 as of September 30, 2025 and December 31, 2024 respectively. Included in “Inventories” on the unaudited condensed consolidated balance sheets are assets totaling $240,299 and $240,528 as of September 30, 2025 and December 31, 2024, for the rights to recover products from customers associated with our liabilities for return allowances.

Contract liabilities — Warranty provision

The Company typically offer a one-year warranty period to wholesale customers. The warranty covers defects in parts, materials and workmanship. The Company assesses that these warranties to be assurance-type warranties and measures them at fair value. As of September 30, 2025 and December 31, 2024, the balances of warranty provision were $325,487 and $188,880, respectively.

Cost of revenues

Cost of revenue primarily consists of the purchase price of products; inbound shipping costs; warehousing costs; packaging, and payment processing and related transaction costs.

Government subsidies

Government subsidies primarily relate to one-off entitlement granted by the Internal Revenue Service for the Employee Retention Tax Credits. The credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020 and before January 1, 2022. Eligibility and credit amounts vary depending on when the business impact occurred. The Company recognizes government subsidies as other income in the unaudited condensed consolidated statements of operations and comprehensive income upon receipt and when all conditions attached to the subsidies are fulfilled.

Borrowing costs

All borrowing costs are recognized as interest expense in the unaudited condensed consolidated statements of operations and comprehensive income in the period in which they are incurred.

Under the banking facility letter dated January 31, 2018, subsequent amendments made on October 17, 2023 and May 31, 2024, JPMorgan Chase Bank, N.A., a bank in the United States, extended to the Company banking facility of trade financing amounting to $15,000,000, $10,000,000 and $3,000,000, respectively, with an interest rate of 3.0% per annum above the adjusted Secured Overnight Financing rate (“SOFR”). Adjusted SOFR is the sum of applicable margin which is 2.5% per annum, the SOFR applicable to such interest period and the unsecured to secured rate adjustment at 0.1% per annum. The facility had a tenor of up to a year of 360 days from the date of drawdown. On July 1, 2024, the short-term bank loans were fully repaid. As of September 30, 2025 and December 31, 2024, no additional amount was drawn down against the banking facility, and no bank loans were outstanding.

For the nine months ended September 30, 2025 and 2024, the weighted average annual interest rates for the bank loans were approximately nil and 7.94%, respectively. Interest expenses for the nine months ended September 30, 2025, and 2024, was $nil and $12,468, respectively.

Income taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Provision for income taxes consists of current taxes and deferred taxes.

Current tax is recognized based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognized in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have any significant uncertain tax positions nor interest and penalty associated with tax positions as of September 30, 2025 and December 31, 2024.

Segment reporting

In November 2023, the FASB issued Accounting Standards Update, or ASU 2023-07 — Improvements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 for the year ended December 31, 2024, retrospectively to all periods presented in the unaudited condensed consolidated financial statement. The adoption of this ASU had no material impact on reportable segments identified and had no effect on the Company’s unaudited condensed consolidated financial position, results of operations, or cash flows.

Based on the criteria established by ASC 280, “Segment Reporting”, the Company uses the management approach in determining its operating segments. The Company’s chief operating decision maker (“CODM”) reviews consolidated results when making decisions, allocating resources and assessing performance of the Company. The CODM considers that the Company has only one principal revenue stream, which is the wholesaling and distributing of motor vehicle lighting components. The Company carries out all its business activities and operations in the United States. All transactions are concluded and completed in the United States with similar terms and conditions.

The Company’s CODM assesses performance for the segment and decides how to allocate resources by regularly reviewing the segment net income that also is reported as consolidated net income on the unaudited condensed consolidated statements of operations and comprehensive income, after taking into account the Company’s strategic priorities, its cash balance, and its expected use of cash. Further, the CODM reviews and utilizes functional expenses (i.e., selling and marketing and general and administrative) at the consolidated level to manage the Company’s operations. Other segment items included interest expense, total other income, net, and income tax expenses, which are reflected in the segment and consolidated net income. The measure of segment assets is reported on the unaudited condensed consolidated balance sheet as total consolidated assets.

Comprehensive Income

Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income. For the nine months ended September 30, 2025 and 2024, the Company did not recognize any other comprehensive income.

Earnings per share

Earnings per share is calculated in accordance with ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income attributable to each class of common stockholders by the weighted average number of shares of that particular class outstanding during the year.

Diluted earnings per share is calculated by dividing net income attributable to each class of common stockholders, as adjusted for the effect of dilutive common equivalent stocks of that class, if any, by the weighted average number of that particular class of common and dilutive common equivalent stocks outstanding during the period. Common stock equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive. Basic and diluted earnings per common stock are presented in the Company’s unaudited condensed consolidated statements of operations and comprehensive income. For the nine months ended September 30, 2025 and 2024, there were no dilutive shares.

Fair value of financial instruments

The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

	Level 1 —	Quoted prices in active markets for identical assets and liabilities.

	Level 2 —	Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of September 30, 2025 and December 31, 2024, financial instruments of the Company comprised primarily cash and cash equivalents, accounts receivable, prepayment and other assets, amount due from a related party, accounts payable, accrued expenses and other liabilities. The Company concludes that the carrying amounts of these financial instruments approximate their fair values because of the short-term nature of these instruments.

Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, stockholder, or a related corporation.

Commitments and contingencies

In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s unaudited condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Recently issued accounting pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280)” (“ASU 2023-07”). The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision useful financial analyses. Topic 280 requires a public entity to report a measure of segment profit or loss that the chief operating decision maker (CODM) uses to assess segment performance and make decisions about allocating resources. Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in ASU 202307 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, adopted retrospectively. Management considers that the guidance does not have a significant impact on the disclosures set out in these unaudited condensed consolidated financial statements.

In December 2023, FASB issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740)” (“ASU 2023-09”). The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. One of the amendments in ASU 2023-09 includes disclosure of, on an annual basis, a tabular rate reconciliation of (i) the reported income tax expense (or benefit) from continuing operations, to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an annual basis, the year to date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions, including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). The amendments in ASU2023-09 are effective for annual periods beginning after December 15, 2024, and should be applied prospectively. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income (Topic 220-40): Expense Disaggregation Disclosures (“ASU 2024-03”). This update requires, among other things, more detailed disclosure about types of expenses in commonly presented expense captions such as cost of sales and selling, general, and administrative expenses, and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of the on its unaudited condensed consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU 2025-01 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows.