# EDGAR Filing Document

**Accession Number:** 0002060016
**File Stem:** 0001213900-25-124123
**Filing Date:** 2025-12
**Character Count:** 147844
**Document Hash:** e3fe27ed1812325e5ff444ed12d27e1e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-124123.hdr.sgml**: 20251222

**ACCESSION NUMBER**: 0001213900-25-124123

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 79

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251222

**DATE AS OF CHANGE**: 20251222

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Agencia Comercial Spirits Ltd.
- **CENTRAL INDEX KEY:** 0002060016
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-BEER, WINE & DISTILLED ALCOHOLIC BEVERAGES [5180]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** F5

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42892
- **FILM NUMBER:** 251589403

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 65, LN, 114, XISHI RD., XI'AN VIL.
- **STREET 2:** FENGYUAN DISTRICT
- **CITY:** TAICHUNG CITY
- **NON US STATE TERRITORY:** TAIWAN
- **PROVINCE COUNTRY:** F5
- **BUSINESS PHONE:** 04 25614413

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 65, LN, 114, XISHI RD., XI'AN VIL.
- **STREET 2:** FENGYUAN DISTRICT
- **CITY:** TAICHUNG CITY
- **NON US STATE TERRITORY:** TAIWAN
- **PROVINCE COUNTRY:** F5

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Agencia Comercial Co., Ltd
- **DATE OF NAME CHANGE:** 20250311

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16**

**OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934** 

For the month of December 2025

Commission File Number 001-42892

**Agencia Comercial Spirits Ltd**

(Registrant's Name)

**No. 65, Ln. 114, Xishi Rd., Xi'an Vil., Fengyuan Dist. Taichung City 42061, Taiwan (R.O.C.)**

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form 40-F ☐

**Information Contained in this Form 6-K Report**

*Interim Financial Statements*

On December 22, 2025, Agencia Comercial Spirits Ltd issued unaudited interim financial statements as of June 30, 2025. Attached hereto and incorporated by reference herein are the following exhibits.

EXHIBIT INDEX

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Condensed Consolidated Interim Financial Statements as of June 30, 2025](ea026880501ex99-1_agencia.htm) |
| 99.2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](ea026880501ex99-2_agencia.htm) |
| 101.INS\*\* | Inline XBRL Instance Document. |
| 101.SCH\*\* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL\*\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF\*\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB\*\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE\*\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

**<u>SIGNATURES</u>**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Agencia Comercial Spirits Ltd** | **Agencia Comercial Spirits Ltd** |
| Date: December 22, 2025 | By: | */s/ Tsai Yi Yang* |
|  | Name: | Tsai Yi Yang |
|  | Title: | Director and Chief Executive Officer |

---

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.1**

**Agencia Comercial SPIRITS Ltd** **INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **CONTENTS** | **PAGE(S)** |
| [COMBINED AND UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND JUNE 30, 2025](#a_001) | F-2 |
| [UNAUDITED COMBINED AND UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025](#a_002) | F-3 |
| [UNAUDITED COMBINED AND UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025](#a_003) | F-4 |
| [UNAUDITED COMBINED AND UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025](#a_004) | F-5 |
| [NOTES TO THE UNAUDITED COMBINED AND UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS](#a_005) | F-6 – F-25 |

---

**AGENCIA COMERCIAL SPIRITS LTD** **COMBINED AND UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND JUNE 30, 2025**

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**December 31,**<br>**2024** | **As of**<br>**June 30,**<br>**2025** |
|  | **US$** | **US$** |
|  | **(Audited)** | **(Unaudited)** |
| **ASSETS** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 54752 | 825343 |
| &nbsp;&nbsp;&nbsp;Account receivables | 717644 | 1359747 |
| &nbsp;&nbsp;&nbsp;Prepayments and other receivables | 244242 | 676204 |
| &nbsp;&nbsp;&nbsp;Inventories | 2650957 | 2894682 |
| **Total current assets** | **3667595** | **5755976** |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Finance right-of-use ("ROU") assets |  | 155698 |
| &nbsp;&nbsp;&nbsp;Operating right-of-use ("ROU") assets | 94885 | 94760 |
| &nbsp;&nbsp;&nbsp;Intangible asset |  | 54880 |
| &nbsp;&nbsp;&nbsp;Deferred Initial Public Offering ("IPO") costs | 150151 | 533184 |
| **Total non-current assets** | **245036** | **838522** |
| **Total assets** | **3912631** | **6594498** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Account payables | 334140 | 815289 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 23316 | 25849 |
| &nbsp;&nbsp;&nbsp;Accruals and other payables | 3440 | 74980 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term loans | 29736 | 33644 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 19945 | 25562 |
| &nbsp;&nbsp;&nbsp;Finance lease liabilities |  | 31401 |
| &nbsp;&nbsp;&nbsp;Amount due to related parties | 1031203 | 1485034 |
| &nbsp;&nbsp;&nbsp;Tax payables | 480243 | 600695 |
| **Total current liabilities** | **1922023** | **3092454** |
| **Non-current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Long-term loans | 17727 | 2604 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 72680 | 69199 |
| &nbsp;&nbsp;&nbsp;Finance lease liabilities |  | 73903 |
| **Total non-current liabilities** | **90407** | **145706** |
| **Total liabilities** | **2012430** | **3238160** |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary shares (US$0.00004 par value, 625,000,000 class A shares authorised, 12,500,000 and 17,864,000 shares issued and outstanding as of December 31, 2024 and June 30, 2025)\* | 500 | 715 |
| &nbsp;&nbsp;&nbsp;Ordinary shares (US$0.00004 par value, 625,000,000 class B shares authorised, 12,500,000 and 14,500,000 shares issued and outstanding as of December 31, 2024 and June 30, 2025)\* | 500 | 580 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | (1000) | (280800) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 169600 | 1243625 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 1747875 | 2133513 |
| &nbsp;&nbsp;&nbsp;Statutory reserve | 101857 | 146291 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive (losses) income | (119131) | 112414 |
| **Total shareholders' equity** | **1900201** | **3356338** |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **3912631** | **6594498** |

---

\* The shares and per share data are presented on a retroactive basis to reflect the Company's Share Consolidation. (Note 13).

The accompanying Accounting Policies and Explanatory Notes form an integral part of, and should be read in conjunction with, these combined and consolidated financial statements.

**Agencia Comercial SPIRITS Ltd** **UNAUDITED COMBINED AND UNAUNDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Revenue from third parties | **1231487** | **1859890** |
| Revenue from related parties | 150858 | 23658 |
| **Total revenue** | **1382345** | **1883548** |
| Cost of revenue | (692305) | (1021373) |
| **Gross profit** | **690040** | **862175** |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | (70007) | (319764) |
| &nbsp;&nbsp;&nbsp;Sales and distribution expenses | (35773) | (29043) |
| **Total operating expenses** | **(105780)** | **(348807)** |
| **Income from operations** | **584260** | **513368** |
| &nbsp;&nbsp;&nbsp;Interest income | 53 | 329 |
| &nbsp;&nbsp;&nbsp;Interest expenses | (987) | (1769) |
| &nbsp;&nbsp;&nbsp;Foreign exchange gains (losses), net | 548 | (4136) |
| &nbsp;&nbsp;&nbsp;Sundry income | 5166 | 33366 |
| **Total income before income tax expense** | **589040** | **541158** |
| &nbsp;&nbsp;&nbsp;Income tax expenses | (123237) | (111086) |
| **Net income** | **465803** | **430072** |
| **Other comprehensive (loss) income** |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments, net of tax of nil | (41441) | 231545 |
| **Total comprehensive income** | **424362** | **661617** |
| **Net earnings per ordinary share attributable to ordinary shareholders of the Company** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted\* | 0.0373 | 0.0327 |
| **Weighted average shares used in calculating net earnings per ordinary share** | 12500000 | 13140045 |

---

\* The shares and per share data are presented on a retroactive basis to reflect the Company's Share Consolidation (Note 13).

The accompanying Accounting Policies and Explanatory Notes form an integral part of, and should be read in conjunction with, these combined and consolidated financial statements.

**Agencia Comercial SPIRITS Ltd** **UNAUDITED COMBINED AND UNAUDITED CONSOLIODATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A <br> shares** | **Class A <br> shares** | **Class B <br> shares** | **Class B <br> shares** | **Subscription <br> Receivable** | **Additional <br> paid-in <br> capital** | **Retained <br> earnings** | **Statutory <br> reserve** | **Accumulated <br> other <br> Comprehensive <br> losses** | **Total <br> Shareholders' <br> equity** |
|  | **Shares** | **US$** | **Shares\*** | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| **Balance as of December 31, 2023** | **12500000** | **500** | **12500000** | **500** | **(1000)** | **169600** | **1046525** | **23929** | **(29063)** | **1210991** |
| Net income for the financial year |  |  |  |  |  |  | 465803 |  |  | 465803 |
| Appropriation to statutory reserve |  |  |  |  |  |  | (46580) | 46580 |  |  |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  | (41441) | (41441) |
| **Balance as of June 30, 2024** | **12500000** | **500** | **12500000** | **500** | **(1000)** | **169600** | **1465748** | **70509** | **(70504)** | **1635353** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A <br> shares** | **Class A <br> shares** | **Class B <br> shares** | **Class B <br> shares** | **Subscription <br> Receivable** | **Additional <br> paid-in <br> capital** | **Retained <br> earnings** | **Statutory <br> reserve** | **Accumulated <br> other <br> Comprehensive <br> losses (income)** | **Total <br> Shareholders' <br> equity** |
|  | **Shares** | **US$** | **Shares\*** | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| **Balance as of December 31, 2024** | **12500000** | **500** | **12500000** | **500** | **(1000)** | **169600** | **1747875** | **101857** | **(119131)** | **1900201** |
| Contribution from shareholders |  |  |  |  | 1000 |  |  |  |  | 1000 |
| Issuance of new shares at May 28, 2025 | 2900000 | 116 |  |  | (280800) | 1074204 |  |  |  | 793520 |
| Issuance of new shares at June 24, 2025 | 2464000 | 99 | 2000000 | 80 |  | (179) |  |  |  |  |
| Net income for the financial year |  |  |  |  |  |  | 430072 |  |  | 430072 |
| Appropriation to statutory reserve |  |  |  |  |  |  | (44434) | 44434 |  |  |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  | 231545 | 231545 |
| **Balance as of June 30, 2025** | **17864000** | **715** | **14500000** | **580** | **(280800)** | **1243625** | **2133513** | **146291** | **112414** | **3356338** |

---

\* The shares and per share data are presented on a retroactive basis to reflect the Company's Share Consolidation (Note 13).

The accompanying Accounting Policies and Explanatory Notes form an integral part of, and should be read in conjunction with, these combined and consolidated financial statements.

**AGENCIA COMERCIAL SPIRITS LTD** **UNAUDITED COMBINED AND UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| **Cash flows from operating activities:** |  |  |
| **Net income** | **465803** | **430072** |
| *Adjustment to reconcile net income to net cash (used in)/provided by <br> operating activities* |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation of operating right-of-use assets | 4026 | 13093 |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets |  | 875 |
| *Changes in operating assets and liabilities:* |  |  |
| &nbsp;&nbsp;&nbsp;Account receivables | (400801) | (583329) |
| &nbsp;&nbsp;&nbsp;Prepayments and other receivables | (117691) | (433995) |
| &nbsp;&nbsp;&nbsp;Inventories | (386820) | 41681 |
| &nbsp;&nbsp;&nbsp;Account payables | 113368 | 418573 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | (295444) |  |
| &nbsp;&nbsp;&nbsp;Accruals and other payables | 3021 | 66962 |
| &nbsp;&nbsp;&nbsp;Amount due to a related party |  | 176965 |
| &nbsp;&nbsp;&nbsp;Principal repayment of operating lease liabilities | (4026) | (13093) |
| &nbsp;&nbsp;&nbsp;Tax payables | 121379 | 111086 |
| **Net cash (used in) provided by operating activities** | **(497185)** | **228890** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Deferred IPO costs |  | (345534) |
| &nbsp;&nbsp;&nbsp;Proceeds from new borrowings |  | 2577320 |
| &nbsp;&nbsp;&nbsp;Repayment of borrowings | (15145) | (2592724) |
| &nbsp;&nbsp;&nbsp;Proceeds from a related party | 419165 | 2881031 |
| &nbsp;&nbsp;&nbsp;Repayment to a related party |  | (2736371) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of new shares |  | 794520 |
| &nbsp;&nbsp;&nbsp;Principal repayment of finance lease liabilities |  | (47415) |
| **Net cash provided by financing activities** | **404020** | **530827** |
| **Net (decrease) increase in cash and cash equivalents** | **(93165)** | **759717** |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, at beginning of the financial period | 126287 | 54752 |
| &nbsp;&nbsp;&nbsp;Effect of foreign exchange rate changes, net | (1934) | 10874 |
| **Cash and cash equivalents, at end of the financial period** | **31188** | **825343** |
| **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Income taxes paid |  |  |
| &nbsp;&nbsp;&nbsp;Interest received | 53 | 329 |
| &nbsp;&nbsp;&nbsp;Interest paid | (987) | (1769) |
| Non-cash investing and financing activities |  |  |
| &nbsp;&nbsp;&nbsp;ROU assets obtained in exchange for operating lease liabilities |  | 5633 |
| &nbsp;&nbsp;&nbsp;ROU assets obtained in exchange for finance lease liabilities |  | 146501 |

---

The accompanying Accounting Policies and Explanatory Notes form an integral part of, and should be read in conjunction with, these combined and consolidated financial statements.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES** 

Agencia Comercial Spirits Ltd ("Agencia Cayman") was incorporated as an exempted company under the laws of the Cayman Islands on March 7, 2025. Agencia Cayman and its subsidiaries (collectively the "Company") engaged in trading and wholesale of whisky, encompassing the procurement, distribution, and sale of whisky products in both Taiwan and international markets. In connection with its initial public offering, the Company undertook a reorganization of its legal structure (the "Reorganization"). The Reorganization involved: (1) the incorporation of Agencia Cayman, a Cayman Islands holding company; (2) reorganized Ping Shiang Holding Ltd ("Ping Shiang Holding"), incorporated in BVI on January 21, 2025, as wholly owned subsidiaries of Agencia Cayman on May 27, 2025; (3) On May 23, 2025, Ping Shiang Holding completed an acquisition of Agencia Taiwan through the shares transfer. Upon completion, Ping Shiang Holding holds 100% equity interest in Agencia Taiwan.

Immediately before and after the reorganization, the controlling shareholders, Mr. Tsai Yi Yang and Ms. Lee Li Mei (together the "Controlling Shareholders"), controlled Agencia Cayman; therefore, for accounting purposes, the reorganization is accounted for as a transaction of entities under common control. Accordingly, the accompanying combined financial statements have been prepared as if the current corporate structure had been in existence throughout the financial years presented.

During the reporting periods, Agencia Cayman has two subsidiaries. Details of its subsidiaries are set out below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of subsidiaries** | **Place of <br> incorporation** | **Date of <br> incorporation** | **Percentage of <br> direct or indirect <br> interests** | **Principal activities** |
| Ping Shiang Holding Ltd ("Ping Shiang Holding") | BVI | January 21, 2025 | 100.0% | Investment holding |
| Agencia Comercial Co., Ltd ("Agencia Taiwan") | Taiwan | July 7, 2020 | 100.0% | Trading and Wholesale of whisky |

---

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

Basis of presentation

The accompanying combined and consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for information pursuant to the rules and regulations of the U.S. Securities Exchange Commission ("SEC").

Principles of consolidation

For the purpose of preparing this set of combined and consolidated financial statements, the combined and consolidated balance sheet of the Company as at June 30, 2025 and December 31, 2024, the combined and consolidated statements of operations and comprehensive income, combined and consolidated statement of changes in shareholders' equity and combined and consolidated statements of cash flows of the Company for the six months ended June 30, 2025 and 2024 have been prepared on a combined and consolidated basis and include the financial information of the Company as if the current group structure had been in existence throughout the financial years or from the date the entities are under common control, if later, in accordance with ASC 805-50, Business Combinations — Related Issues (Common Control Transactions). Accordingly, the assets, liabilities, and results of operations of the entities under common control have been combined, and prior periods have been retrospectively adjusted to reflect the reorganization.

The preparation of combined and consolidated financial statements in conformity with U.S. GAAP requires management to exercise judgement in the process of applying the Company's accounting policies and requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the end of the reporting periods, and the reported amounts of revenue and expenses throughout the financial years. Although these estimates are based on management's best knowledge of historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, actual results may ultimately differ from those estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the financial years in which the estimate is revised if the revision affects only that financial year or in the financial year of the revision and future financial years if the revision affects both current and future financial years.

Use of estimates and assumptions

The preparation of combined and 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, disclosure of contingent assets and liabilities at the date of the combined and consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company's management reviews these estimates based on information that is currently available. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the Company's combined and consolidated financial statements mainly include provision for expected credit losses on account receivables and other receivables, revenue recognition, and uncertain tax position.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Functional currency and foreign currency translation

The Company uses United States dollar ("US$") as its reporting currency. The functional currency of the Company is New Taiwan Dollars ("NTD").

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency at the prevailing rates of exchange at the balance sheet date. Non-monetary assets and liabilities are remeasured into the functional currency at historical rates. Transactions denominated in other currencies are remeasured into the functional currency at the exchange rates prevailing on the transaction dates.

Translation gains and losses are recognized as foreign exchange gain or loss, net in the statement of operations and comprehensive income.

Assets and liabilities of the Company are translated into US$ at financial year-end exchange rates. Equity accounts other than earnings generated in current period are translated into US$ at the appropriate historical rates. Income and expense items are translated at average exchange rates during the financial year. Translation adjustments arising from these are reported as accumulated other comprehensive income/(loss) in the statements of changes in shareholders' equity.

The corresponding exchange rates used to translate NTD to US$ are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2024** | **Dec 31,<br> 2024** | **Dec 31,<br> 2024** | **Jun 30,<br> 2025** | **Jun 30,<br> 2025** |
| Year-end spot rate |  | 0.0317 |  | 0.0305 |  | 0.0339 |
| Annual average rate |  | 0.0321 |  | 0.0312 |  | 0.0319 |

---

Related parties

The Company adopted Accounting Standards Codification ("ASC") 850, *Relate Party Disclosures*, for the identification of related parties and disclosure of related party transactions.

A related party is generally defined as (i) any person and/or their immediate family holding 10% or more of the Company's securities, (ii) the Company's management and/or their immediate family, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operational decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities.

Transactions involving related parties cannot be presumed to be carried out on an arm's length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's length transactions unless such representations can be substantiated.

Fair value measurements

The established fair value hierarchy as defined by U.S. GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of inputs that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include:

---

| | |
|:---|:---|
| Level 1 — | Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. |
| Level 2 — | Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. |
| Level 3 — | Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. |

---

The Company's financial instruments include cash and cash equivalents, account receivables, financial assets included in prepayments and other receivables, amount due from a related party, account payables, financial liabilities included in accruals and other payables, bank borrowings, and amount due to a related party. The carrying amount of these instruments approximates to their fair value largely due to the short-maturities.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and cash at bank that are unrestricted as to withdrawal or use. The Company has not experienced any losses in such accounts and do not anticipate any exposure to significant risks.

Account receivables

Accounts receivables are stated at amortized cost, net of an allowance for credit losses. The allowance is estimated using the Current Expected Credit Loss model, which requires the Company to forecast expected credit losses over the lifetime of the receivables. The estimate considers historical loss experience, current economic conditions, reasonable and supportable forecasts, aging of receivable balances, and customer-specific risk factors (e.g., financial health, payment trends). Adjustments are made when objective evidence indicates a probable loss that can be reasonably estimated.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using first-in-first-out method. The cost of inventories comprises the cost of finished goods and an appropriate proportion of overheads. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Net realizable value write-downs are normally determined on an individual item basis. However, in some cases it may be appropriate to group together similar products.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation of intangible assets is calculated on a straight-line basis over the estimated useful life of each asset as follows:

Trademark 20 years

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimate.

An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the unaudited combined and consolidated statement of operations.

Deferred IPO costs

The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin ("SAB") Topic 5A — *Expenses of Offering*. Deferred offering costs consist of underwriting, legal, and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred offering costs will be charged to shareholders' equity upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of December 31, 2024 and June 30, 2025 the Company capitalized approximately US$150,151 and US$533,184 of deferred offering costs, respectively.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Account payables, and accruals and other payables

Account payables, and accruals and other payables are initially measured at fair value and, after initial recognition, at amortized cost, except for short term payable with no stated interest rate and the effect of discounting being immaterial that are measured at their original invoice amount.

Borrowing costs

Borrowing costs are recognized as an expense in the period in which they are incurred.

Bank borrowings

Borrowings are presented as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the end of the reporting date, in which case they are presented as non-current liabilities.

Borrowings are initially recorded at fair value, net of transaction costs and subsequently carried at amortized costs using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method. Borrowings which are due to be settled within 12 months after the end of the reporting date are included in current borrowings in the balance sheet even though the original term was for a period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the end of the reporting date and before the combined and consolidated financial statements are authorized for issue.

Revenue recognition

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, *Revenue from Contracts with Customers (Topic 606)*, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The Company adopted ASU No. 2014-09 and its related amendments (collectively, known as ASC 606, *Revenue from Contracts with Customers*) upon incorporation. Adoption of ASC 606 did not impact the timing of revenue recognition in the Company's combined and consolidated financial statements for the prior annual periods.

The Company generated its revenue from trading of whisky products. Revenue is recognized when control of the promised goods is transferred to a customer for an amount that reflects the consideration that the Company expects to receive in exchange for those goods. Typically, control is transferred to a customer in accordance with the applicable incoterms used for delivery, as specified in the sales contract. The specific incoterm used in each transaction determines the point at which the risks and rewards of ownership transfer from the Company to a customer, thereby triggering the recognition of revenue. The Company recognizes revenue as the principal in the transaction in accordance with ASC 606, due to the Company's ownership and control over the inventory throughout the entire process.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:

● Identify the contract with a customer,

● Identify the performance obligations in the contract,

● Determine the transaction price,

● Allocate the transaction price to performance obligations in the contract, and

● Recognize revenue as performance obligation is satisfied.

Under ASC 606, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue at the point of time as a principal when control of the goods is transferred to the customer, rather than when fees become fixed or determinable. The Company evaluates whether it acts as a principal or an agent based on the following criteria:

● Control:&nbsp;&nbsp;&nbsp;&nbsp;The Company must have the primary responsibility for fulfilling the contracts, which includes managing inventory, determining pricing, and delivering the product.

● Inventory Risk:&nbsp;&nbsp;&nbsp;&nbsp;The Company assumes inventory risk, meaning it may bear the risk of loss for the goods held in inventory before they are transferred to the customer.

● Customer Relationship:&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains the customer relationship and is responsible for providing customer service and support.

● Profit Margin:&nbsp;&nbsp;&nbsp;&nbsp;The Company earns a profit margin that reflects the risks and rewards associated with being the principal.

The Company will regularly assess its contracts with customers to determine the appropriate treatment for revenue under ASC 606.

Cost of revenue

The cost of revenue consists primarily of procurement of whisky products held for sale, as well as direct costs associated with the procurement, such as import and export charges, and processing charges.

General and administrative expenses

General and administrative expenses consist primarily of staff costs (including salaries, messing, etc.), expenses related to trademark, rental expenses, as well as professional fees incurred in daily operations.

Sales and distribution expenses

Sales and distribution expenses consist primarily of basic salaries and employee benefits of sales personnel not directly attributable to the generation of revenue and expenses incurred to various warehouses.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Leases

The Company adopted ASC 842, *Leases* upon incorporation, using the modified retrospective transition method through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedient. The Company categorized leases with contractual terms longer than twelve months as either operating or finance lease.

ROU assets represent the Company's rights to use underlying assets for the lease terms and lease liabilities represent the Company's obligation to make lease payments arising from the leases. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, if any, using the discount rate for the lease at the commencement date. If the implicit rate in lease is not readily determinable for the Company's operating leases, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the lease liability calculation. Variable lease payments, if any, are recognized in operating expenses in the period in which the obligation for those payments is incurred.

For operating leases, lease expense is recognized on a straight-line basis over the lease term. For finance leases, lease expense is recognized as amortization on a straight-line basis over the lease term and interest using the effective interest method.

Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

Income taxes

The Company follows the liability method of accounting for income taxes in accordance with ASC 740, *Income Taxes*. The Company accounts for income taxes in accordance with the laws and regulations of the relevant tax authorities. The charge for taxation is based on the results for the fiscal 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 taxes are accounted for using the asset and liability method in respect of temporary differences arising from the differences between the carrying amount of assets and liabilities in the combined financial statements and the corresponding tax bases used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated suing 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, in which case the deferred tax is also dealt with in 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% probability of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Segment

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision-making Company, in deciding how to allocate resources and in assessing performance. The Company utilizes the "management approach" to identify its reportable operating segments.

The management approach considers the internal organizational structure and reporting mechanisms employed by the Company's CODM for operational decision-makings and performance evaluation. The Company's chief executive officer is designated as the Company's CODM, who reviews and evaluates the consolidated results to determine resource allocation and assess the Company's overall performance. After a thorough analysis, the Company has concluded that it operates within only one reportable operating segment.

The Company's CODM has been identified as the Chief Executive Director who reviews the results of operations when making decisions about allocating resources and assessing the performance of the Company. For management's purpose, the Company operates in one business unit based on the products sold, and its sole operating segment is the trading and wholesale of whisky products. The CODM monitors the revenue, results, assets and liabilities of its business unit as a whole and regularly reviews its operating results to make decisions about resource allocation. Accordingly, no analysis of segment information other than entity-wide information is presented.

The Company's long lived assets are all located in Taiwan and substantially all monitoring and control activities of its operations are conducted in Taiwan. Therefore, no geographic information is presented.

The significant segment expenses are consistent with those reported on the combined and consolidated financial statements of operations and comprehensive income and include cost of revenue, sales and distribution expenses and general and administrative expenses. For significant segment expenses incurred during the six months ended June 30, 2025, and 2024, refer to Combined And Consolidated Financial Statements of Operations and Comprehensive Income.

Earnings per share

Basic earnings per share is computed by dividing net income attributable to the holders of Class A ordinary shares by the weighted average number of Class A ordinary shares outstanding during the period presented,

Class B ordinary shares are excluded from the calculation as they represent non-participating shares with no claim on profits or distributions.

Diluted earnings per share is calculated by dividing net income attributable to the holders of Class A ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of Class A ordinary shares and dilutive ordinary share equivalents outstanding during the period.

Comprehensive income

Comprehensive income consists of two components, net income and other comprehensive income/(loss). Other comprehensive income/(loss) refers to income, expenses, gains /(losses) that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded from net income. Other comprehensive income/(loss) consists of foreign currency translation adjustments resulting from the Company not using USD as its functional currency.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Concentration of risks

 ****

***Concentration of credit risk***

Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of account receivables. The Company conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Company conducts periodic reviews of financial conditions and payment practices of its customers to minimize collection risk on account receivables.

 ****

***Concentration of customers***

The Company has the following customers accounted for 10% or more of sales for the six months ended June 30, 2024 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |  |
|  | **2024** | **2025** |  |
| Customer A | 66.52% |  | <sup>#</sup> |
| Customer B | 19.67% |  | <sup>#</sup> |
| Customer C | — <sup>\*</sup> | 26.01 | % |
| Customer D | — <sup>\*</sup> | 24.24 | % |
| Customer E | — <sup>\*</sup> | 10.49 | % |

---

\* Less than 10% of the sales for the six months ended June 30, 2024.

# Less than 10% of the sales for the six months ended June 30, 2025.

The Company has the following customers accounted for 10% or more of account receivables as of December 31, 2024 and June 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |  |
| Customer A | 34.92% |  | <sup>#</sup> |
| Customer B | 14.74% | 11.83 | % |
| Customer C | 14.51% |  | <sup>#</sup> |
| Customer D | 10.21% |  | <sup>#</sup> |
| Customer E | — <sup>\*</sup> | 40.20 | % |
| Customer F | — <sup>\*</sup> | 16.22 | % |
| Customer G | — <sup>\*</sup> | 11.33 | % |

---

\* Less than 10% of the account receivables as of December 31, 2024.

# Less than 10% of the account receivables as of June 30, 2025.

 ****

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Concentration of suppliers***

The Company has the following suppliers accounted for 10% or more of purchases for the six months ended June 30, 2024 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |  |
|  | **2024** | **2025** |  |
| Supplier A | 50.15% |  | <sup>#</sup> |
| Supplier B | 25.48% |  | <sup>#</sup> |
| Supplier C | 14.39% | 71.62 | % |

---

# Less than 10% of the purchases for the six months ended June 30, 2025.

The Company has the following suppliers accounted for 10% or more of account payables as of December 31, 2024 and June 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
| Supplier A | 57.22% | 26.00% |
| Supplier B | 42.77% | 19.43% |
| Supplier C | — <sup>\*</sup> | 48.99% |

---

\* Less than 10% of the account payables as of December 31, 2024.

**3.** **RECENT ACCOUNTING PRONOUNCEMENTS** 

ASU 2023-06, *Disclosure Improvements — Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative*

On October 9, 2023, the FASB issued ASU 2023-06, *Disclosure Improvements — Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative*. The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of topics in the FASB Accounting Standards Codification (the "Codification"), with the intention of clarifying or improving them and to align the requirements in the Codification with the regulations of the U.S. Securities and Exchange Commission (the "SEC"). The effective date for ASU 2023-06 varies and is determined for each individual disclosure based on the effective date of the SEC's removal of the related disclosure. ASU 2023-06 will not have any impact on the Company's financial position or results of operation.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**3.** **RECENT ACCOUNTING PRONOUNCEMENTS** (cont.)

ASU 2023-09, *Improvements to Income Tax Disclosures*

On December 14, 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvement to Income Tax Disclosure*. ASU 2023-09 improves income tax disclosure requirements related to rate reconciliation income taxes paid and other miscellaneous tax disclosures to enhance their transparency and decision usefulness to investors. These enhancements allow investors to better assess how an entity's operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for financial years beginning after December 15, 2024, with early adoption permitted. The Company does not expect the adoption of this pronouncement to have a significant impact on its combined financial statements.

ASU 2024-02, *Codification Improvements — Amendments to Remove References to the Concepts Statements*

In March 2024, the FASB issued ASU 2024-02, *Codification Improvements — Amendments to Remove References to the Concepts Statements*. This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for financial years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which combined financial statements have not yet been issued (or made available for issuance). The Company believes the future adoption of this ASU is not expected to have a material impact on its combined financial statements.

ASU 2024-03, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*

In November 2024, the FASB issued ASU 2024-03, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. The amendments in this ASU are intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to combined financial statements at interim and annual reporting periods. For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to combined financial statements, all relevant expense captions presented on the face of the income statement in continuing operations into the purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either (1) prospectively to combined financial statements issued for reporting periods after the effective date of this Update, or (2) retrospectively to any or all prior periods presented in the combined financial statements. The Company is currently evaluating the impact the adoption of ASU 2024-03 will have on its combined financial statements and related disclosures.

ASU 2025-01, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)*

In January 2025, the FASB issued ASU 2025-01, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)*. The FASB issued update 2024-03 on November 4, 2024. Update 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 update 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 update 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB's intent in the basis for conclusions of update 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. However, the FASB acknowledges that there was ambiguity between the intent in the basis for conclusions in update 2024-03 and the transition guidance that was included in the Codification when update 2024-03 was issued.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**4.** **ACCOUNT RECEIVABLES** 

Details of account receivables are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Account receivables | 717644 | 1359747 |
| Less: allowance for credit losses |  |  |
|  | 717644 | 1359747 |

---

As of 31 December 2024, the related party receivable balance of US$68,400 is included within account receivables as the amount is expected to be collected in cash in the normal course of business.

The Company's credit period with customers is generally 60 days. The Company reviews its account receivable balances regularly to minimize credit risk. Balances are reviewed regularly by senior management. The Company does not hold any collateral or other credit enhancements over its trade receivable balances. Account receivables are non-interest bearing.

In applying ASC 326, the Company concluded that no material expected credit loss was required as of December 31, 2024 and June 30, 2025, based on forward-looking scenarios and customer credit assessments.

**5.** **PREPAYMENTS AND OTHER RECEIVABLES** 

Prepayments and other receivables as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Prepayments to suppliers | 240395 | 633590 |
| Rental deposits | 3847 | 5280 |
| Other receivables (Note) |  | 37334 |
|  | 244242 | 676204 |

---

As of 31 December 2024, a prepayment to a related party of US$45,044 is included within prepayments to suppliers for the prepayment of fees related to a trademark licensing agreement, as described in Note 14 — Commitments and Contingencies.

In assessing the expected credit loss in accordance with ASC 326, the Company incorporates various factors such as historical experience, current economic conditions, as well as forward-looking information. As of December 31, 2024 and June 30, 2025, the Company concludes that no material expected credit loss is noted in respect of its other receivables.

**6.** **INVENTORIES** 

Inventories as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Finished goods | 2650957 | 2894682 |

---

The Company consistently monitors its inventories for potential obsolete products. Any loss on damaged items is immaterial and will be recognized immediately. As a result, no reserve was made for inventories as of December 31, 2024 and June 30, 2025.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**7.** **BANK BORROWINGS** 

As of December 31, 2024 and June 30, 2025, the Company has certain bank borrowings outstanding with Bank of Kaohsiung, which are denominated in NTD and are guaranteed by a shareholder, his immediate family member, and a credit fund. Particulars of the aforesaid bank borrowings as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Current portion | 29736 | 33644 |
| Non-current portion | 17727 | 2604 |
|  | 47463 | 36248 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Banker** | **Start Date** | **Maturity Date** | **Interest Rate** | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  |  |  |  | **US$** | **US$** |
| Bank of Kaohsiung | 2021/07/09 | 2026/07/09 | 2.295% | 499 | 381 |
| Bank of Kaohsiung | 2021/07/09 | 2026/07/09 | 2.295% | 9493 | 7425 |
| Bank of Kaohsiung | 2021/07/09 | 2026/07/09 | 4.545% | 3820 | 2930 |
| Bank of Kaohsiung | 2021/07/09 | 2026/07/09 | 2.675% | 33651 | 25512 |
|  |  |  |  | 47463 | 36248 |

---

**8.** **REVENUE FROM CONTRACTS WITH CUSTOMERS** 

&nbsp;&nbsp;&nbsp;&nbsp;a) Disaggregated revenue information:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| **Types of goods** |  |  |
| Whisky products | 1382345 | 1883548 |
| **<u>Timing of revenue recognition</u>** |  |  |
| Goods transferred at a point in time | 1382345 | 1883548 |

---

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**8.** **REVENUE FROM CONTRACTS WITH CUSTOMERS** (cont.)

During the six months ended June 30, 2024, contract liabilities of US$304,577 were recognized as revenue. No contract liabilities were recognized as revenue during the six months ended June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;b) Performance
 obligations

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***1.***  ***Nature of Performance Obligations*** 

In accordance with ASC 606, the Company identifies the following performance obligations in its contracts:

**●** **Product Delivery:** 

The Company is responsible for delivering the specified goods (e.g., whisky products) to the designated location and ensuring that the goods meet the agreed specifications and quality.

**●** **Acceptance and Replacement:** 

If the delivered goods do not conform to the specifications or have defects, the customer must notify the Company in writing within 10 days, and the Company shall unconditionally replace the goods and bear the corresponding shipping costs. However, upon the acceptance of the delivered goods by the customer, no return of the goods will be accepted if the customers subsequently discover the delivered goods do not confirm to the agreed specifications or have defects.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***2.***  ***Timing of Revenue Recognition*** 

**●** **Upon Delivery:** 

Revenue is recognized when the goods are delivered to the customer, which is when control of the goods transfers to the customer.

For overseas sales transactions, the Company recognise revenue in accordance with relevant incoterms (international Commercial Terms) specified in the respective sales contracts. The timing of revenue recognition is determined by the transfer of control and risk associated with the goods to the customer.

For overseas sales under the Free on Board (FOB) shipping point incoterm, revenue is recognised when the goods are loaded onto the vessel at the specified shipping point, at which point control and risks related to the goods are transferred to the buyer.

In the case of overseas sales under Cost, Insurance, and Freight (CIF) destination incoterm, revenue is recognised upon delivery of the goods to the specified destination port, where control and risks related to the goods are transferred to the buyer.

 ****

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**8.** **REVENUE FROM CONTRACTS WITH CUSTOMERS** (cont.)

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***3.***  ***Contractual Liabilities*** 

According to the contract terms, the following situations may affect the fulfillment of performance obligations and revenue recognition:

**●** **Force Majeure:** 

If delivery is delayed due to natural disasters or other force majeure events, Company shall negotiate with customer, which may affect the timing of revenue recognition.

**●** **Breach of Contract:** 

If customer fails to pay the agreed price, the Company has the right to terminate the contract and request the return of the goods. If the Company fails to deliver the agreed goods, they will bear the corresponding liability and pay penalties.

This disclosure aims to provide stakeholders with a clear understanding of the nature and timing of revenue recognized from contracts with customers.

**9.** **LEASES** 

The Company leases office and warehouse premises under operating lease agreements, and a motor vehicle under finance lease agreements.

During the six months ended June 30, 2025, the Company entered into three operating lease agreements with related parties, with lease terms of 72 months, 60 months and 12 months, respectively. In addition, the Company entered into a finance lease agreement for a motor vehicle with a third party, with a least term of 36 months.

With reference to market rate for similar premises with similar location, the Company is of the opinion that these lease agreements are able to represent arm's length transactions between the Company and the related parties.

As of December 31, 2024 and June 30, 2025, the Company has not entered into any sublease agreements and the leases do not include any residual value guarantees or covenants.

The following represents the aggregate operating and finance ROU assets and related operating and finance lease liabilities as of December 31, 2024 and June 30, 2025:

The weighted average lease term and weighted average discount rate as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| **Assets** | | |
| Operating ROU assets | 94885 | 94760 |
| Finance ROU assets |  | 155698 |
|  | 94885 | 250458 |
| **<u>Liabilities</u>** |  |  |
| Current operating lease liabilities | 19945 | 25562 |
| Current finance lease liabilities |  | 31401 |
| Non-current operating lease liabilities | 72680 | 69199 |
| Non-current finance lease liabilities |  | 73903 |
|  | 92625 | 200065 |

---

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**9.** **LEASES** (cont.)

The weighted average lease term and weighted average discount rate as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
| **Weighted average lease term:** | | |
| Operating leases | 52.43 months | 45.17 months |
| Finance leases |  | 35.00 months |
| **<u>Weighted average discount rate</u>** |  |  |
| Operating leases | 3.84% | 3.84% |
| Finance leases |  | 14.01% |

---

The components of lease expenses for the six months ended June 30, 2024 and 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Operating leases | 4822 | 14905 |
| Short-term leases not included in measurement of lease liabilities |  |  |
|  | 4822 | 14905 |

---

Supplemental cash flow information related to leases for the six months ended June 30, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| **Cash paid for amounts included in the measurement of lease liabilities:** |  |  |
| Operating cash flows for operating leases | 4822 | 14905 |
| **<u>Supplemental non-cash information:</u>** |  |  |
| ROU assets obtained in exchange for the lease obligations |  | 152134 |

---

Future minimum lease payments under operating leases as of June 30, 2025 are as follows:

---

| | |
|:---|:---|
|  | **As of <br> June 30, <br> 2025** |
|  | **US$** |
| 2026 | 28635 |
| 2027 | 25588 |
| 2028 | 25588 |
| 2029 | 20511 |
| Thereafter | 1286 |
| **Total undiscounted cash flows** | **101608** |
| *Present value:* |  |
| Current operating lease liabilities | 25562 |
| Non-current operating lease liabilities | 69199 |
| **Total operating lease liabilities** | **94761** |
| Interest on lease liabilities | 6847 |

---

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**9.** **LEASES** (cont.)

Future minimum lease payments under finance leases as of June 30, 2025 are as follows:

---

| | |
|:---|:---|
|  | **As of <br> June 30, <br> 2025** |
|  | **US$** |
| 2026 | 44191 |
| 2027 | 44191 |
| 2028 | 40508 |
| **Total undiscounted cash flows** | **128890** |
| *Present value:* |  |
| Current finance lease liabilities | 31401 |
| Non-current finance lease liabilities | 73903 |
| **Total finance lease liabilities** | **105304** |
| Interest on lease liabilities | 23586 |

---

**10.** **INTANGIBLE ASSETS** 

Intangible assets as of December 31, 2024 and June 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Trademark |  | 55810 |
| Less: accumulated amortisation |  | (930) |
| Net book value |  | 54880 |

---

For the six months ended June 30, 2025, the Company recorded US$930 in amortization expenses with no impairment charges. No amortization or impairment was recorded during the six months ended June 30, 2024.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**11.** **TAXES** 

 ****

***Taiwan Corporate Income Tax***

The Company is subject to a corporate income tax rate of 20% on its net taxable income in accordance with Taiwan tax regulations. Management regularly reviews its tax positions and related liabilities to ensure compliance with local tax laws and to reflect any necessary adjustments in the combined financial statements.

The income tax expenses included in the statement of operations and comprehensive income are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Current tax | 123237 | 111086 |

---

Reconciliation between the income tax expenses computed by applying the Taiwan statutory income tax rate to profit before income taxes and actual provision were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Total income before income tax expense | 589040 | 541158 |
| Income tax at statutory tax rate of 20% | 117808 | 108232 |
| Tax effect of expenses not deductible | 5429 | 2854 |
| Under-provision for prior financial years |  |  |
| Others |  |  |
| Total income tax expenses | 123237 | 111086 |

---

As of December 31, 2024 and June 30, 2025, the tax payables included in the Company's balance sheet solely consist of income taxes incurred in Taiwan.

No deferred tax is provided since there is no material temporary difference as of the end of the reporting period.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**12.** **RELATED PARTY TRANSACTIONS AND BALANCES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The Company had the following balances with related parties as of December 31, 2024 and June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of related parties** | **Relationship** | **Nature** | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  |  |  | **US$** | **US$** |
| Mr. Tsai Yi Yang | Beneficial owner | Amount due to a related party | 1031203 | 1248212 |
| Mr. Tsai Yi Yang | Beneficial owner | Rental deposit paid | 1527 | 2708 |
| Ms. Lee Li Mei | Shareholder of the Company | Rental deposit paid | 2320 | 2572 |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Account receivables | 68488 |  |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Other receivables |  | 7446 |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Amount due to a related party |  | 16135 |
| Ping Shiang Business Corporation | Common UBO | Account payables |  | 399395 |
| Ping Shiang Business Corporation | Common UBO | Amount due to a related party |  | 220687 |
| 芳華株式会社 | Common UBO | Prepayments and other receivables | 45044 |  |
| 芳華株式会社 | Common UBO | Trademark assets |  | 55811 |
| 瀨古酒造株式会社 | Common UBO | Prepayments and other receivables |  | 36398 |

---

The above balances were recognized during normal course of business. These balances are unsecured, interest-free, and have no fixed terms of repayment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) During the six months ended June 30, 2024 and 2025, the Company had the following transactions with related parties:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
| <br>**Name of related parties** | <br>**Relationship** | <br>**Nature** | **2024** | **2025** |
|  |  |  | **US$** | **US$** |
| Xiamen Celtic Culture Communication | Common UBO | Sales | 83498 |  |
| Ping Shiang Business Corporation | Common UBO | Purchase | 135092 | 676392 |
| Ping Shiang Business Corporation | Common UBO | Repayment to a related party |  | 58919 |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Sales | 67361 | 23659 |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Other income |  | 7007 |
| Ding Yi International Co., Ltd | Controlled by an immediate family member of the beneficial owner | Proceeds from a related party |  | 15182 |
| Mr. Tsai Yi Yang | Beneficial owner | Rent paid | 4822 | 7644 |
| Mr. Tsai Yi Yang | Beneficial owner | Expense paid on behalf |  | 176965 |
| Mr. Tsai Yi Yang | Beneficial owner | Repayment to a related party |  | 100133 |
| Mr. Tsai Yi Yang | Beneficial owner | Proceeds from a related party | 246117 | 21657 |
| Ms. Lee Li Mei | Shareholder of the Company | Rent paid |  | 7261 |
| 芳華株式会社 | Common UBO | Prepayment for a trademark | 48000 |  |
| 瀨古酒造株式会社 | Common UBO | Prepayment for inventory cost |  | 34248 |

---

These transactions were made in normal course of business.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**13.** **SHAREHOLDERS' EQUITY** 

Ordinary Shares

On March 7, 2025, Agencia Cayman was established as a new Cayman Islands holding structure with an authorized capital of 25,000 Class A Ordinary Shares and 25,000 Class B Ordinary Shares (without dividend rights and no entitlement to distribution of assets upon winding-up), of which 500 Class A and 500 Class B shares were issued and outstanding at a par value of US$1 each. This common control transaction was accounted for at historical carrying amounts, with no change to the combined equity balance. The reorganization was undertaken in preparation for the Company's planned initial public offering.

On May 28, 2025, four new independent subscribers (none of whom are Controlling Shareholders) subscribed for an aggregate of 116 Class A Ordinary Shares in Agencia Cayman at a consideration of US$9,360 per share, with fully settled as of July 4, 2025.

On June 24, 2025, Agencia Cayman amended its authorised share capital to 1,250,000,000 shares (625,000,000 Class A and 625,000,000 Class B Ordinary Shares) with a reduced par value of US$0.00004 per share; effected a 1-for-25,000 stock split of all outstanding shares, converting each existing share of US$1.00 par value into 25,000 shares of US$0.00004 par value. These changes were accounted for at historical carrying amounts, with the stock split applied retroactively to all periods presented, resulting in no change to the total combined equity balance while increasing the number of shares outstanding proportionally. The reorganization maintains the original rights and restrictions of each share class, with Class B Ordinary Shares continuing to have no dividend rights or entitlement to distribution of assets upon winding-up.

On June 24, 2025, Agencia Cayman also issued new shares at par value (US$0.00004 per share), including 2,000,000 Class A and 2,000,000 Class B ordinary Shares to the Controlling Shareholder, Ping Shiang Business Ltd, and an aggregate of 464,000 Class A Ordinary Shares to four independent subscribers.

Retained Earnings

Retained earnings are the portion of a company's net income that is not paid out as dividends but is instead reinvested in the business or held as a reserve for future use. This may include funds set aside for expansion, debt repayment, or other strategic purposes. As of December 31, 2024 and June 30, 2025, the balances of retained earnings were US$1,747,875 and US$2,133,513, respectively.

Statutory Reserve

Under the law of Taiwan, a statutory reserve is a portion of a company's profits that must be set aside to comply with the Company Act of Taiwan. This reserve is designed to protect creditors and ensure the financial stability of the Company. As of December 31, 2024 and June 30, 2025, the balances of statutory reserve were US$101,857 and US$146,291, respectively.

Accumulated Other Comprehensive Losses (Income)

Other comprehensive losses accumulated in the Company's equity comprise foreign currency adjustments. It represents the cumulative amount of other comprehensive losses which has not been realized, and it is reported within the equity section of the Company's balance sheet. As of December 31, 2024 and June 30, 2025, the balances of accumulated other comprehensive (losses) income were US$(119,131) and US$112,414, respectively.

**AGENCIA COMERCIAL SPIRITS LTD**

**NOTES TO THE UNAUDITED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025**

**14.** **COMMITMENTS AND CONTINEGENCIES** 

Lease commitments

The Company entered into long-term operating leases of office premises and warehouses, and finance lease of a motor vehicle in Taiwan. The Company's commitment for minimum lease payments under such operating leases and finance lease as of December 31, 2024 and June 30, 2025 were disclosed in Note 9.

Contingencies

In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual relationships and a variety of liabilities resulting from such claim, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. The Company is of the opinion that there were no pending or threatened claims and litigation as of December 31, 2024 and June 30, 2025, and through the issuance date of these combined and consolidated financial statements.

Capital commitments

The Company had the following capital commitment at the end of the reporting period:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> June 30,<br> 2025** |
|  | **US$** | **US$** |
| Contracted but not provided for | 5120 |  |

---

During the financial year ended December 31, 2024, the Company entered into an agreement with a related party regarding the right to use a trademark on its whisky products, amounting to 7,500,000 Japanese Yen (approximately US$48,000). As of the December 31, 2024, approximately US$5,120 remained outstanding. The outstanding amount was settled in February 2025 and the full amount was capitalised as an intangible asset upon the effectiveness of the license agreement in March 2025.

**15.** **SUBSEQUENT EVENT** 

Subsequent to end of the reporting period, on October 23, 2025, the Company successfully completed its initial public offering on Nasdaq Capital Market. The offering, pursuant to an underwriting agreement dated October 21, 2025, involved the initial sale of 1,750,000 Class A ordinary shares at US$4.00 per share for gross proceeds of US$7,000,000. The Company's shares commenced trading on Nasdaq under the symbol "AGCC" on October 22, 2025.

On October 29, 2025, the underwriters fully exercised their 45-day over-allotment option to purchase an additional 262,500 shares, increasing the total shares issued to 2,012,500 and raising total gross proceeds to US$8,050,000. The net proceeds to the Company were approximately US$5,220,000, after deducting underwriting discounts and offering expenses.

On December 18, 2025, the Company entered into loan agreements with four of its former shareholders. The loans were funded with proceeds from their recent share disposal. The aggregate maximum facility available under these agreements is US$16,820,000, intended for the Group's general working capital purposes. The loans carry an interest rate of 10% per annum and have a nominal term of three years, subject to the Lenders' right to demand immediate repayment at any time.

## Exhibit 99.2

**Exhibit 99.2**

**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 our combined and consolidated financial statements and related notes included elsewhere in this report. This discussion and analysis and other parts of this report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including, without limitation, those set forth under "Risk Factors" in the Company's registration statement on Form F-1 as filed with the SEC on September 4, 2025 (commission file no. 333-288600) and elsewhere in this report. You should carefully read the "Risk Factors" section of this report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.*

 

*In some cases, these forward-looking statements can be identified by words or phrases such as "believe", "plan", "expect", "intend", "should", "seek", "estimate", "will", "aim" and "anticipate", or other similar expressions, but these are not the exclusive means of identifying such statements. All statements other than statements of historical facts included in this document, including those regarding future financial position and results, business strategy, plans and objectives of management for future operations (including development plans and dividends) and statements on future industry growth are forward-looking statements.*

 

*As used in this interim report, the terms the "Company", "we", "our", "our Group", "our business" or "us" refer solely to Agencia Comercial Co., Ltd, a company with limited liability organized under the laws of Cayman Islands. Our reporting currency is U.S. dollars. The functional currency of the Company's Operating Subsidiary located in Taiwan is NTD. Unless otherwise noted, all translations from NTD to U.S. dollars and from U.S. dollars to NTD in this report are made at a rate of NTD32.79 to US$1.00, the exchange rate in effect as of December 31, 2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. We make no representation that the NTD or U.S. dollar amounts referred to in this report could have been or could be converted into U.S. dollars or NTD, as the case may be, at any particular rate or at all.*

 

*All amounts included herein with respect to the six months ended June 30, 2025 and 2024 ("Interim Financial Statements") are derived from our unaudited condensed consolidated financial statements for the six months ended June 30, 2025 and 2024 included elsewhere in this interim report. These Interim Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or US GAAP.*

 

**<u>Overview</u>**

We, through our Operating Subsidiary, are primarily engaged in trading of whisky products, including procurement, distribution, and sale in both Taiwan and international markets. Through the Operating Subsidiary, we import and sell a broad range of premium whisky products, which come from countries/regions such as Scotland.

Beginning in 2025, we ventured into brand-authorized bottling, packaging, and sales, marking a significant diversification of our business model. Under this new approach, we obtain brand licenses from renowned whisky brands, allowing us to source raw cask whisky directly from their distilleries. We then conduct the bottling and packaging operations in Taiwan, leveraging the expertise of local contract manufacturers. This brand-authorized model enables us to collaborate closely with prestigious whisky brands, fostering strong partnerships and ensuring adherence to their stringent quality standards. By directly sourcing raw cask whisky from the brand owners and carrying out the bottling and packaging processes in Taiwan, we can offer a seamless end-to-end solution while maintaining control over the supply chain and product quality.

The following discussion and analysis of our financial condition and results of operations are prepared based on the financial data which is derived from our unaudited consolidated interim financial statements for the six months ended June 30, 2025 and 2024, included in this report.

Our financial performance for the six months ended June 30, 2025, demonstrated continued growth momentum, with revenue reaching US$1,883,548 for the six months ended June 30, 2025, representing 36% growth compared to the six months ended June 30, 2024. For the six months ended June 30, 2025, we successfully launched our proprietary brand whisky packaging and distribution business, which contributed US$118,292 in revenue alongside our core bottled whisky which contributed revenue of US$1,765,256. This new business line complements our traditional offerings by leveraging brand partnerships to create bottled products, further diversifying our revenue streams and enhancing our market position.

For the six months ended June 30, 2025, we reported net income of US$430,072, representing an 8% decrease from $465,803 for the six months ended June 30, 2024. This result reflects both the 25% growth in gross profit of US$172,135 achieved through our product mix strategy and geographic expansion, and the planned increase in operating expenses to support our business transformation. While net income declined modestly, this was primarily due to strategic investments as we transition to a public company. The gross profit improvement was driven by proprietary brand whisky packaging and distribution business (80% margin) and bottled whisky sales (44% margin, up from 36% for the six months ended June 30, 2024), while the operating expense increase reflected necessary public company readiness costs, including financial reporting upgrades.

Our financial condition and results of operations for the six months ended June 30, 2025, reflect our strong market position, effective execution of growth strategies, and efficient management of resources. The sustained revenue growth for the six months ended June 30, 2025 demonstrates the continued momentum of our business model. These factors have positioned us favorably for continued growth and profitability in the future.

**Business**

We, through our operating subsidiary Agencia Comercial Co., Ltd., are engaged in the trading and wholesale of premium whisky products. Our business encompasses procurement, distribution and sale of high-quality whiskies, including both bottled and cask whisky in both Taiwan and international markets. Our operations are structured across three primary business lines:

● **Raw Cask Whisky Sales:** Wholesale of entire whisky barrels to distributors and retailers.

● **Bottled Whisky Sales:** Distribution of finished bottled whisky products through hospitality channels and corporate clients.

● **Proprietary Brand Whisky Packaging and Distribution:** A vertically integrated model launched in 2025, under which we collaborate with established international whisky brands to bottle, package, and distribute products under brand authorization agreements.

We source whisky from renowned distilleries, primarily in Scotland, and leverage our distribution network across Taiwan, Japan, Hong Kong, Canada, Macau, and China. In 2025, we introduced our proprietary brand whisky packaging and distribution operations in Taiwan through licensed contract manufacturers, enhancing control over quality and supply chain while diversifying our revenue streams.

For a complete description of our business, strategy, competitive environment, and regulatory landscape, please refer to the description under the heading "Business" in our Registration Statement on Form F-1 (File No. 333-288600), filed with the SEC on September 4, 2025, which is incorporated herein by reference.

**<u>Key Factors Affecting Our RESULTS OF OPERATIONS</u>**

The key factors that we believe affect our financial condition and results of operations are discussed below.

 ****

***Market Demand and Customer Preferences***

Our revenue is directly tied to the demand for whisky products in both domestic and international markets. Changes in consumer preferences, such as shifts toward premium or craft spirits, could significantly impact our sales volumes and profitability. As an important player in the whisky industry, we must remain agile and responsive to evolving market dynamics and consumer trends.

The Taiwan market is a crucial revenue driver for our business. Factors influencing domestic demand in Taiwan include economic conditions, disposable income levels, demographic shifts, and cultural trends. A strong Taiwan economy and rising disposable incomes can stimulate demand for our products, particularly in the premium and luxury segments. Conversely, economic downturns or shifts in consumer spending patterns may adversely affect sales volumes.

Although our international sales segment has historically been small, we recognize significant growth potential in global markets starting in 2025. We are poised for a strategic transformation, with a substantial increase in third-party international sales. This marks a decisive shift from our previous reliance on related party transactions, contributing to our growth in non-domestic markets such as Japan, Hong Kong, Canada, and Macau. The global whisky market is influenced by several key factors, including consumer trends and spending patterns, economic conditions, and cultural factors. A failure to fully understand these elements may impact our ability to successfully penetrate and compete in specified international markets.

In recent years, we have witnessed a growing consumer preference for premium and craft spirits, driven by a desire for unique and authentic experiences. This trend has created opportunities for us to introduce higher-priced, limited-edition, and premium whisky offerings, potentially enhancing our profitability. However, failure to adapt to this trend or accurately anticipate consumer preferences could lead to a loss of market share and revenue.

The whisky industry is highly competitive, with numerous Taiwan and international players vying for market share. Our ability to differentiate our products, maintain brand loyalty, and effectively market our offerings is crucial for sustaining demand and profitability. Intense competition may necessitate increased marketing efforts, product innovation, or pricing adjustments, impacting our operating costs and margins.

By closely monitoring market trends, consumer preferences, and competitive dynamics, we aim to proactively adapt our product offerings, marketing strategies, and operational processes to maintain a strong position in the whisky market. Failure to effectively address shifts in demand or consumer preferences could adversely impact our sales volumes, revenue, and overall profitability.

 ****

***Supplier Relations and Procurement Costs***

As a trading company in the whisky industry, our ability to maintain strong relationships with reputable suppliers and secure favorable procurement terms is crucial to our success. We rely on a diverse network of suppliers from various whisky-producing regions, such as Scotland, to source premium and rare whisky products for our customers. Disruptions in our supplier relationships or changes in procurement costs can significantly impact our gross margins and profitability.

We strive to cultivate long-term partnerships with our suppliers, built on trust, transparency, and mutual understanding. Our procurement team works closely with suppliers to ensure a steady supply of high-quality products and to negotiate favorable pricing and payment terms. Additionally, our expertise in identifying and procuring unique and limited-edition whiskies from sought-after distilleries enhances our competitive advantage and enables us to command premium pricing in the market.

In 2025, we introduced our proprietary brand whisky packaging and distribution business, which involves authorized bottling and packaging of whiskies in partnership with renowned international brands. Under this model, we source bulk whisky directly from brand-owned distilleries and conduct bottling operations in Taiwan through licensed manufacturers, combining brand heritage with our distribution expertise. This vertical integration allows us to maintain quality control while capturing additional value in the supply chain.

The cost of goods sold, which includes the purchase price of whisky products, import duties, and other associated costs, is a significant factor affecting our profitability. With the introduction of our proprietary brand whisky packaging and distribution business, our cost of goods sold now additionally incorporates the bottling and packaging costs. Fluctuations in the cost of goods sold can be influenced by various factors, such as global supply and demand dynamics, changes in import regulations, and currency exchange rates.

To mitigate the impact of cost fluctuations, we employ strategic inventory management practices, leveraging our industry knowledge and market intelligence to optimize our purchasing decisions. For our proprietary brand whisky packaging and distribution business, we have established long-term supply arrangements with brand partners and bottling manufacturers. We continuously explore opportunities to streamline our supply chain and logistics operations, including diversifying our supplier base for packaging materials across the Asia-Pacific region. These measures, combined with our existing cost management framework, help reduce operational costs and improve overall efficiency as we scale our premium whisky offerings.

***Maintenance of Key Personnel***

Our success is heavily dependent on the expertise, industry knowledge, and relationships cultivated by our key personnel. They possess valuable insights into the whisky industry, have established strong connections with suppliers and customers, and play a pivotal role in driving our strategic initiatives and growth objectives.

Retaining and attracting top talent in the industry is crucial for maintaining our competitive edge. We strive to create a workplace environment that fosters professional growth, rewards performance, and provides opportunities for career advancement. Additionally, we offer competitive compensation packages to motivate and retain our key personnel.

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The loss of key personnel or the inability to attract and retain skilled professionals could adversely impact our operations, supplier relationships, and market position. As such, we prioritize succession planning and knowledge transfer initiatives to mitigate the risks associated with personnel changes and ensure business continuity.

Furthermore, we cultivate a strong corporate culture that promotes collaboration, innovation, and a shared passion for the whisky industry. By fostering an engaging and inclusive work environment, we aim to enhance employee satisfaction and loyalty, contributing to the long-term retention of our valuable human capital.

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***Fluctuation in Interest Rates***

As part of our financing strategy, we have obtained borrowings from a local bank in Taiwan. These borrowings are subject to fluctuations in interest rates, which can directly impact our financial expenses and profitability.

Rising interest rates can lead to an increase in the cost of servicing our debt, thereby reducing our net income. Conversely, a decline in interest rates can result in lower financing costs, positively impacting our profitability. Given the potential impact of interest rate fluctuations on our financial performance, we closely monitor market conditions and maintain a prudent approach to debt management.

To mitigate the risks associated with interest rate volatility, depending on the market situation, we may employ various strategies, such as negotiating fixed-rate borrowings or exploring hedging instruments like interest rate swaps. Additionally, we maintain a disciplined approach to capital allocation, ensuring that our borrowings are aligned with our operational requirements and growth objectives.

Our finance team regularly evaluates our debt portfolio, interest rate exposure, and potential refinancing opportunities to optimize our financing costs and maintain a healthy financial position. By proactively managing our interest rate risk, we aim to minimize the adverse effects of interest rate fluctuations on our results of operations and ensure long-term financial stability.

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***Fluctuation in Exchange Rates***

As a company engaged in international trade, our operations are exposed to fluctuations in exchange rates. With customers and suppliers located in various countries, our revenue and expenses are denominated in multiple currencies.

Unfavorable movements in exchange rates can adversely impact our financial performance. For instance, an appreciation of the NTD against other currencies can make our products more expensive for international customers, potentially affecting our export sales and profitability. Conversely, a depreciation of the NTD can increase the costs of importing whisky products from our foreign suppliers, putting pressure on our gross margins.

Our finance team closely monitors currency markets and employs robust risk management practices to assess and manage our foreign exchange exposure proactively. By implementing these strategies, we aim to minimize the impact of currency fluctuations on our financial results and maintain a stable and predictable operating environment.

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***Competitive Landscape***

The whisky trading industry is highly competitive, with numerous players offering similar products. Our ability to differentiate our offerings, maintain competitive pricing, and secure reliable suppliers will be critical to sustaining growth.

As we explore new markets, we may face challenges related to brand recognition, regulatory hurdles, and competition from established players, which could impact our revenue growth.

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***Macroeconomic Conditions***

Our results of operations are influenced by global economic conditions, including inflation, recessionary pressures, and changes in consumer spending patterns. Economic downturns could reduce demand for premium products like whisky, adversely affecting our revenue.

***Related Party Transactions***

We engage in various transactions with related parties, including our controlling shareholders, their immediate family members, and entities under common control. These transactions primarily include purchases and sales of inventory, financing arrangements, leasing of office and warehouse premises, and reimbursements of expenses. Details of these transactions and outstanding balances are disclosed in Note 12, "Related Party Transactions and Balances," to the accompanying unaudited condensed consolidated financial statements.

While these transactions are conducted in the ordinary course of business and are negotiated based on management's assessment of market terms, they may not necessarily reflect terms that would be available from unrelated third parties. The concentration of certain payables and receivables with related parties could affect our liquidity and operational flexibility if these relationships were to change. We regularly review these arrangements to ensure they remain commercially reasonable and aligned with the interests of the Company and its shareholders.

The level of related party transactions fluctuates depending on operational needs and financing activities. For the six months ended June 30, 2025, transactions with related parties accounted for approximately 1.3% of total revenue, compared to 10.9% for the six months ended June 30, 2024, reflecting our strategic shift toward third-party international sales.

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**<u>Key Components of Our Results of Operations</u>**

To assess the performance of our business, we consider a variety of financial and operating measures. The key financial performance indicators we use include revenue, cost of revenue, gross profit and gross margin, general and administrative expenses, sales and distribution expenses, and income tax expenses. Our review of these indicators reveals the results of our business performance and provides timely and meaningful feedback to key operating decisions and allows our business to respond promptly to competitive market conditions and different demands and preferences from our customers. The key measures that we use to evaluate the performance of our business are set forth below and are discussed in greater details under "Results of Operations".

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***Revenue***

Our revenue is generated through the sale and distribution of bottled whisky products across three core business lines: raw cask whisky sales, bottled whisky sales, and proprietary brand whisky packaging and distribution business. The raw cask segment involves wholesale transactions of entire whisky barrels to distributors and retailers, while the bottled segment focuses on finished products sold through hospitality channels and corporate clients. Our proprietary brand whisky packaging and distribution business represent a vertically integrated model where we collaborate with established distilleries to bottle and package our product offerings under brand authorization, combining their heritage with our distribution expertise.

Revenue performance directly impacts our financial results through both top-line growth and product mix effects. Management prioritizes strategic balance between volume growth and product mix, as shifts in geographic markets or product categories can significantly influence profitability. We monitor how revenue composition affects gross margins, working capital requirements, and scalability across different business models.

We evaluate revenue performance through several key metrics: geographic market penetration (domestic vs. international), product category mix (raw cask vs. bottled vs. proprietary brand whisky packaging and distribution business), and trade volume relative to revenue growth. These measurements help assess pricing power, demand elasticity, and the effectiveness of distribution strategies. Management supplements this analysis with customer acquisition costs, channel profitability, and inventory turnover ratios to optimize our commercial operations.

***Cost of revenue***

Our cost of revenue primarily comprises the procurement costs of whisky products held for sale, including raw casks and bottled inventory, as well as direct expenses associated with import/export duties and processing fees. These costs are inherently significant in our business model due to the premium nature of our products, which require careful sourcing, aging, and handling throughout the supply chain. The composition of these costs varies across our product segments, with raw cask procurement, bottling operations, and international distribution each presenting distinct cost structures.

Cost of revenue directly impacts our profitability through gross margin, serving as a key indicator of our operational efficiency and pricing power. Management actively monitors procurement strategies, supplier relationships, and logistics networks to optimize these costs while maintaining product quality. Fluctuations in raw material pricing, trade tariffs, or transportation costs can materially affect margins, making cost control a critical focus area for sustaining profitability across economic cycles.

We evaluate cost of revenue performance through several operational lenses, such as procurement efficiency, measured by cost per unit across product categories; supply chain optimization, including lead times and import/export cost structures; and economies of scale as production volumes grow. These metrics inform strategic decisions regarding supplier diversification, inventory management, and pricing adjustments to align with our premium market positioning.

***Gross profit and gross profit margin***

Gross profit represents the difference between revenue and the cost of goods sold, serving as a fundamental measure of our production and distribution efficiency. Gross profit margin, calculated as gross profit divided by revenue, indicates the portion of each revenue dollar retained after accounting for direct product costs, reflecting our pricing power and cost management effectiveness.

Gross profit and margin directly impact our results of operations by determining the funds available to cover operating expenses and generate operating income. Higher gross margins provide greater flexibility to invest in growth initiatives while maintaining profitability, while margin pressure may require operational adjustments or cost optimization measures. These metrics ultimately influence our bottom-line performance and capacity for strategic reinvestment.

Management monitors gross profit and margin by product line and distribution channel, analyzing trends in input costs, production efficiencies, and pricing strategies. We evaluate margin sustainability through regular reviews of procurement practices, inventory management, and product mix optimization, ensuring alignment with our product mix strategy and long-term profitability targets.

***General and administrative expenses***

General and administrative expenses consist primarily of staff costs (including salaries, messing, etc.), expenses related to trademark, lease expenses, and professional fee (including audit fee for our consolidated financial statements). These expenses affect our results of operations by reducing operating income, as they are largely fixed in nature and do not fluctuate directly with sales volume. The level of general and administrative expenses relative to revenue influences our operating margins and overall profitability, requiring careful management to ensure the efficient allocation of resources while maintaining necessary corporate functions and strategic capabilities. Management monitors and controls these costs through regular budget reviews, operational efficiency assessments, and strategic resource allocation, while ensuring we maintain the necessary corporate governance, financial reporting capabilities, and operational support required for sustainable growth.

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***Sales and distribution expenses***

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Sales and distribution expenses consist primarily of employee-related costs for sales personnel, including salaries and benefits, along with warehouse expenses directly tied to revenue generation. These costs represent the necessary investments to maintain and grow our distribution network, sales channels, and customer relationships.

Sales and distribution expenses affect our results of operations by reducing operating profit, with their efficiency directly influencing our overall profitability. As semi-variable costs, they typically scale with business expansion but can be optimized through productivity improvements. Management monitors these expenses on a regular basis, ensuring we maintain an appropriate balance between market penetration and cost discipline. The effectiveness of our sales and distribution network is evaluated based on its ability to support revenue growth while maintaining competitive cost structures.

***Income tax expenses***

Income tax expenses represent the corporate income tax we are required to pay to relevant tax authorities based on our taxable income. As a Taiwan-based company, we are subject to profit tax governed by local tax laws and regulations. The expense is calculated by applying applicable tax rates to taxable income, after accounting for all allowable deductions, credits, and adjustments under the tax code.

Income tax expenses directly impact our net income and overall profitability, as they represent the final allocation of pre-tax earnings to tax obligations. The effective tax rate, which may differ from statutory rates due to available incentives and deductions, serves as our primary performance metric for tax efficiency. Management actively monitors this rate through ongoing review of tax positions, compliance with regulatory changes, and optimization of available tax planning opportunities within legal frameworks.

**<u>Results of Operations</u>**

<u>For the six months ended June 30, 2025 and 2024</u>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | | |
|  | **2024** | **2024** | **2025** | **2025** | **Variance** | **Variance** |
|  | **US$** | **% of<br> total<br> revenue** | **US$** | % **of <br> total<br> revenue** | **Amount <br> US$** | % |
| Revenue | 1382345 |  | 1883548 |  | 501203 | 36.3% |
| Cost of revenue | (692305) | 50% | (1021373) | 54% | (329068) | 47.5% |
| Gross profit | 690040 | 50% | 862175 | 46% | 172135 | 24.9% |
| Operating expenses: |  |  |  |  |  |  |
| – General and administrative expenses | (70007) | 5% | (319764) | 17% | (249757) | 356.8% |
| – Sales and distribution expenses | (35773) | 3% | (29043) | 2% | 6730 | (18.8)% |
| Total operating expenses | (105780) | 8% | (348807) | 19% | (243027) | 229.7% |
| Income from operations | 584260 | 42% | 513368 | 27% | (70892) | (12.1)% |
| – Interest income | 53 | 0% | 329 | 0% | 276 | 520.8% |
| – Interest expense | (987) | 0% | (1769) | 0% | (782) | 79.2% |
| – Foreign exchange gains (losses), net | 548 | 0% | (4136) | 0% | (4684) | (854.7)% |
| – Sundry income | 5166 | 0% | 33366 | 2% | 28200 | 545.9% |
| Total income before tax expense | 589040 | 43% | 541158 | 29% | (47882) | (8.1)% |
| – Income tax expenses | (123237) | 9% | (111086) | 6% | 12151 | (9.9)% |
| Net income | 465803 | 34% | 430072 | 23% | (35731) | (7.7)% |

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***Revenue***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Raw cask <br> whisky sales** | **Bottled <br> whisky sales** | **Proprietary<br> brand whisky<br> packaging and<br> distribution** | **Total** |
|  | **US$** | **US$** | **US$** | **US$** |
| For the six months ended June 30, 2024 |  |  |  |  |
| – Taiwan sales |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Third parties | 765264 | 466223 |  | 1231487 |
| &nbsp;&nbsp;&nbsp;&nbsp;– Related parties |  | 67360 |  | 67360 |
| – International sales |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– China (related parties) |  | 83498 |  | 83498 |
|  | 765264 | 617081 |  | 1382345 |
| For the six months ended June 30, 2025 |  |  |  |  |
| – Taiwan sales |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Third parties |  | 271688 | 94633 | 366321 |
| &nbsp;&nbsp;&nbsp;&nbsp;– Related parties |  |  | 23659 | 23659 |
| – International sales |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Hong Kong (third parties) |  | 472149 |  | 472149 |
| &nbsp;&nbsp;&nbsp;&nbsp;– Macau (third parties) |  | 32342 |  | 32342 |
| &nbsp;&nbsp;&nbsp;&nbsp;– Canada (third parties) |  | 182262 |  | 182262 |
| &nbsp;&nbsp;&nbsp;&nbsp;– Japan (third parties) |  | 806815 |  | 806815 |
|  |  | 1765256 | 118292 | 1883548 |

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For the six months ended June 30, 2025, we achieved total revenue of US$1,883,548, representing a 36% increase compared to US$1,382,345 for the six months ended June 30, 2024. This growth demonstrates the successful execution of our strategic initiatives to diversify both geographically and across product lines.

A transformation occurred in our geographic revenue mix for the six months ended June 30, 2025. International sales grew to dominate our business, contributing 80% of total revenue compared to just 6% for the six months ended June 30, 2024. This remarkable shift was led by strong performance in several key markets: Japan emerged as our largest international market at 43% of total revenue, followed by Hong Kong at 25%, Canada at 10%, and Macau at 2%. While maintaining our established presence in Taiwan, domestic sales now represent 20% of revenue as we strategically rebalance our market focus.

Our product portfolio strategy has evolved in response to market dynamics. For the six months ended June 30, 2025, we deliberately shifted our commercial focus toward bottled whisky sales and our new proprietary brand whisky packaging and distribution business. This is reflected in bottled whisky sales generating US$1,765,256 in revenue, maintaining their position as our core offering, while our proprietary brand whisky packaging and distribution business contributed US$118,292 in their initial period. This compares to the six months ended June 30, 2024, where raw cask whisky sales contributed US$765,264.

This strategic pivot was a response to intensified competition and margin pressure in the raw cask whisky market for the six months ended June 30, 2025. While raw cask whisky sales delivered a healthy 61% gross margin for the six months ended June 30, 2024, we believe greater value is unlocked by bottling and branding our casks. We maintain our existing raw whisky inventory and intend to resume sales should market conditions and margins recover sufficiently to achieve improved overall results.

This strategic repositioning has created a more diversified business mix with several important characteristics. First, our international expansion has reduced geographic concentration risk. Second, the focus on bottled and proprietary brand products supports stronger customer relationships and brand equity development. Third, while the current product mix transition has temporarily diluted overall margins, our new business lines demonstrate the potential growth we expect to realize more fully as these operations scale and become a larger portion of revenue.

The 36% revenue growth was achieved alongside these structural business changes, highlighting our ability to implement strategic transformation while maintaining commercial momentum. Looking forward, we anticipate continued revenue expansion through several key drivers: further penetration in our current international markets, scaling of our proprietary brand whisky packaging and distribution business, and the potential reintroduction of raw cask whisky sales under improved margin conditions.

For the six months ended June 30, 2025, our trade volume totaled 6,001 bottles compared to 3,206 bottles (for bottled whisky sales) and 2 barrels equivalent to 35,000 bottles (for raw cask whisky sales) for the six months ended June 30, 2024. This change primarily reflects our strategic transition to focus on bottled products, with the total volume split between our traditional bottled whisky sales (3,001 bottles) and our new proprietary brand whisky packaging and distribution business (3,000 bottles).

Our current product mix, comprising 94% bottled whisky sales and 6% proprietary brand whisky packaging and distribution business, reflects our deliberate strategy to focus on different segments in response to market conditions. While intensified competition in the raw cask whisky sales segment led us to focus on bottled and proprietary products in the period, this has enabled enhanced product value and quality control. The complementary contribution from both our traditional bottled sales and new proprietary brand whisky packaging and distribution business demonstrates the successful execution of our diversification strategy. We expect this approach, i.e. combining our core bottled whisky business with proprietary brand offerings, will continue to drive stronger revenue per bottle and improved profitability. We maintain the flexibility to recommence raw cask whisky sales from our existing inventory should market margins recover.

Our pricing strategy for the six months ended June 30, 2025, reflected a deliberate focus on premiumization, with selling prices ranging from US$26 to US$91,298 compared to US$14 to US$16,274 for the six months ended June 30, 2024. This expanded price architecture supports our positioning as a purveyor of exceptional whisky experiences, particularly through our new proprietary brand whisky packaging and distribution business which contributes significantly to the upper tier of our price spectrum.

At the premium end, our US$91,298 expressions cater to discerning collectors through exclusive collaborations and rare aged stock, while maintaining accessible entry points near US$26 preserves our connection with emerging whisky enthusiasts. The 50/50 volume distribution between core and proprietary brands provides both stability and premium growth potential moving forward.

We anticipate further average price elevation as aged inventory reaches peak maturation and new proprietary brand collaborations launch in the second half of 2025. This pricing strategy, combined with our geographic expansion into luxury markets like Japan and Hong Kong, creates multiple pathways for continued revenue quality improvement.

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***Cost of revenue***

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| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Raw cask whisky sales | 297027 |  |
| Bottled whisky sales | 395278 | 997187 |
| Proprietary brand whisky packaging and distribution business |  | 24186 |
|  | 692305 | 1021373 |

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Our cost of revenue for the six months ended June 30, 2025 reached US$1,021,373, representing a 48% increase from US$692,305 for the six months ended June 30, 2024. This growth, while significant, was outpaced by our 55% revenue expansion, demonstrating our ability to scale operations efficiently despite a strategic business transformation.

The cost increase was primarily driven by growth in our core bottled whisky sales segment, which incurred US$997,187 in costs for the six months ended June 30, 2025. The rise in costs was proportionate to the segment's revenue growth, reflecting our ability to maintain operational discipline amid expansion. This performance was particularly noteworthy given global inflationary pressures on glass, packaging materials, and transportation costs that affected the broader spirits industry during the period.

We are already seeing early signs of cost optimization as our new business model matures. The proprietary brand whisky packaging and distribution business segment's margin performance is beginning to offset transitional cost pressures, and we expect further improvements as we achieve greater scale in material procurement and distribution. Our bottled whisky sales segment also continues to identify efficiency gains through distributor consolidation and production process refinements.

Looking ahead, we anticipate further cost optimization as our proprietary brand whisky packaging and distribution business scale and benefit from greater economies of scale in production and distribution. The current cost profile reflects our deliberate focus on building a more diversified revenue mix while maintaining disciplined cost control across all operations.

***Gross profit and gross margin***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2024** | **2025** | **2025** |
|  | **GP (US$)** | **GP (%)** | **GP (US$)** | **GP (%)** |
| Raw cask whisky sales | 468237 | 61% |  |  |
| Bottled whisky sales | 221803 | 36% | 768068 | 44% |
| Proprietary brand whisky packaging and distribution business |  |  | 94107 | 80% |
|  | 690040 | 50% | 862175 | 46% |

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For the six months ended June 30, 2025, we reported gross profit of US$862,175, representing a 25% increase compared to US$690,040 for the six months ended June 30, 2024. This growth was achieved despite a 4-percentage-point contraction in gross margin, which declined from 50% for the six months ended June 30, 2024 to 46% for the six months ended June 30, 2025. This performance reflects both the successful execution of our strategic initiatives and the transitional impacts of reallocating focus toward different segments in response to margin pressure in the raw cask market.

The gross profit expansion was primarily driven by strong performance in our bottled whisky sales segment, which generated US$768,068 at a 44% gross margin for the six months ended June 30, 2025, compared to US$221,803 at a 36% margin for the six months ended June 30, 2024. This 8-percentage-point margin improvement demonstrates the effectiveness of initiatives including optimized pricing, an enhanced product mix, and operational efficiencies. These gains substantially offset the strategic decision to pause raw cask whisky sales, which had contributed US$468,237 at a 61% margin for the six months ended June 30, 2024.

Our new proprietary brand whisky packaging and distribution business, launched in 2025, contributed US$94,107 at 80% gross margin for the six months ended June 30, 2025. While currently representing a modest portion of total gross profit, this business model combines our distribution expertise with partnerships with renowned distilleries, creating a revenue stream with scalability potential.

We are particularly encouraged by the resilient performance of our core business segments during this period of strategic transition. The 8-percentage-point expansion in bottled whisky sales margins and the 80% margin profile of our proprietary brand whisky packaging and distribution business demonstrate the earnings potential of our transformed business model. These gains were achieved while simultaneously executing a major strategic shift in our operations and geographic focus, underscoring the resilience of our business.

Looking forward, we expect gross margins to stabilize and potentially expand as our proprietary brand whisky packaging and distribution business scales and our international operations mature. With our bottled whisky sales segment demonstrating strong margin progression and our proprietary brand whisky packaging and distribution business establishing its potential growth profile, we are well-positioned to deliver both profit growth and margin expansion in future periods.

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***General and administrative expenses***

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| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| General and administrative expenses |  |  |
| – Professional fees |  | 172.832 |
| – Staff costs | 23148 | 69744 |
| – Trademark | 31329 |  |
| – Lease expenses | 4822 | 28247 |
| – Others | 10708 | 48941 |
|  | 70007 | 319764 |

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For the six months ended June 30, 2025, general and administrative expenses increased to US$319,764, representing a 357% increase from US$70,007 for the six months ended June 30, 2024. As a percentage of revenue, these expenses rose from 5% for the six months ended June 30, 2024 to 17% for the six months ended June 30, 2025, reflecting our accelerated investments in public company readiness and operational scaling.

The substantial increase was primarily driven by three strategic initiatives: professional fees of US$172,832 for enhanced financial reporting and audit services, personnel costs of US$69,744 from strengthening our financial leadership team (including onboarding a CFO), and expanded operational infrastructure costs. These investments were essential to meet evolving compliance requirements and support our growing international operations, while establishing the governance framework needed for our next growth phase.

While these expenditures have temporarily elevated our operating cost ratio, they coincided with our 36% revenue growth for the six months ended June 30, 2025, demonstrating our ability to balance strategic investments with business expansion. The majority of these costs represent transitional expenditures related to establishing foundational capabilities that will support more efficient scaling in future periods.

We anticipate the growth rate of these expenses will moderate in subsequent periods as many of these critical infrastructure investments are now operational. Our focus remains on optimizing these new capabilities while maintaining disciplined cost management across all operations.

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***Sales and distribution expenses***

For the six months ended June 30, 2025, sales and distribution expenses decreased 19% to US$29,043, compared to US$35,773 for the six months ended June 30, 2024, reflecting further improvement in our sales and distribution efficiency, with these expenses decreasing to 2% of total revenue compared to 3% of total revenue for the six months ended June 30, 2024. This enhancement demonstrates the scalability of our sales model and the effective leverage of our existing infrastructure and personnel as we grow.

While the overall sales and distribution expenses remained stable at 2-3% of total revenue, we continuously evaluate opportunities to enhance efficiency and productivity within these areas, ensuring that our resources are allocated effectively to support our growth objectives.

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***Income from Operations***

Income from operations reached US$513,368 for the six months ended June 30, 2025, compared to US$584,260 for the six months ended June 30, 2024, while revenue grew 36% to US$1,883,548 for the six months ended June 30, 2025 from US$1,382,345 for the six months ended June 30, 2024. However, the general and administrative expense increased to US$319,764 for the six months ended June 30, 2025 compared to US$70,007 for the six months ended June 30, 2024.

This performance reflects our continued revenue expansion for the six months ended June 30, 2025, partially offset by increases in general and administrative expenses. These additional expenditures represent our increased investments in public company readiness, which included enhanced financial reporting through our first consolidated audit, the onboarding of an experienced CFO and finance team to strengthen our leadership capabilities, etc. While these initiatives temporarily reduced operating margins, they represent essential investments to build the infrastructure required for our next stage of development.

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***Income tax expenses***

Our income tax expenses for the six months ended June 30, 2025 was US$111,086, reflecting an estimated provision based on interim period profitability. This compares to US$123,237 recorded for the six months ended June 30, 2024, with both periods now recognizing interim tax provisions in accordance with our enhanced financial reporting practices. The full-year tax expense for the year ended December 31, 2024 totaled US$238,935, consistent with our stable effective tax rate when calculated on an annual basis.

As a company operating in Taiwan, our income tax obligations are governed by the local tax authorities and regulations. We are subject to income tax only in Taiwan, where our business operations are based.

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***Net Income***

For the six months ended June 30, 2025, we reported net income of US$430,072, compared to US$465,803 for the six months ended June 30, 2024. The modest decrease primarily reflects our strategic investments in public company readiness initiatives, which were partially offset by improved gross profit in our core bottled whisky sales and brand whisky packaging and distribution business launched in 2025.

**<u>cash flows</u>**

Our cash flow is primarily derived from our operating, investing, and financing activities.

For the six months ended June 30, 2025, we achieved a significant improvement in operating cash flows, with net cash inflows of US$228,890 compared to net outflows of US$497,185 for the six months ended June 30, 2024. This positive reversal was primarily driven by favorable working capital movements, including increases in amounts due to related parties and accounts payables. Our financing activities generated net cash inflows of US$530,827, representing a 31% increase from US$404,020 for the six months ended June 30, 2024, primarily due to proceeds from the issuance of new shares to investors. Consistent with the prior year interim period, we recorded no investing cash flows for the six months ended June 30, 2025, or for the comparable period in 2024. The strengthened cash position reflects both improved operational efficiency and successful execution of our equity financing strategy in preparation for our public listing.

We have established robust liquidity management processes, including cash flow forecasting, working capital optimization, and proactive inventory management strategies. These measures ensure that we maintain sufficient liquidity to meet our obligations as they come due. We are currently evaluating our business strategy, including potential adjustments to our product mix, pricing strategies, and market focus, to enhance profitability and cash flow generation from our core operations.

Please refer to the statements of cash flows in our audited combined financial statements and unaudited combined and consolidated financial statements for further details on our cash flow movements during the reporting periods.

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| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **US$** | **US$** |
| Cash flows provided by (used in): |  |  |
| – Operating activities | (497185) | 228890 |
| – Investing activity |  |  |
| – Financing activities | 404020 | 530827 |
| Net increase (decrease) in cash | (93165) | 759717 |

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**<u>liquidity and capital resources</u>**

We have not engaged in any significant equity transactions since our initial incorporation and issuance of share capital. Our operations have been primarily funded through internally generated cash flows from our whisky trading business activities and borrowings from related parties.

As of June 30, 2025, our cash position strengthened significantly to US$825,343, reflecting improved liquidity management and successful capital raising activities. This improvement reflects both enhanced operational performance and successful capital management, supported by our strong working capital position of US$2,663,522 as of June 30, 2025 as compared to US$1,745,572 as of December 31, 2024. For the six months ended June 30, 2025, we generated net cash inflows from operations of US$228,890, a notable reversal from the net outflow of US$497,185 for the six months ended June 30, 2024. This positive development was driven primarily by favorable working capital movements, including increased amounts due to related parties and accounts payables.

Additionally, we strengthened our balance sheet through financing activities, which generated net cash inflows of US$530,827 compared to US$404,020 for the six months ended June 30, 2024. The increase was attributable to proceeds from the issuance of new shares to investors as part of our pre-IPO capital raising efforts. These developments have significantly enhanced our liquidity position and provide substantial financial flexibility as we execute our growth strategy and prepare for our public listing.

We believe our working capital is sufficient to meet our current operational and working capital requirements. We continue to monitor our liquidity position closely and actively manage our working capital to ensure we have adequate resources to support our business operations and growth initiatives.

Going forward, we expect our liquidity and capital resources to be primarily derived from our operating activities, supplemented by financing activities as needed. We remain committed to optimizing our inventory management and working capital efficiency to improve our operating cash flow generation.

**<u>commitments and contingencies</u>**

We have entered into long-term operating leases for office premises, warehouses and motor vehicles in Taiwan. These lease commitments are a regular part of our business operations and are necessary to secure the required facilities for our operations.

In the ordinary course of business, we may be subject to legal proceedings regarding contractual relationships and a variety of liabilities. When a loss is assessed to be probable, and the amount of the loss is reasonably estimable, appropriate provisions are made in accordance with applicable accounting standards. As of June 30, 2025 and through the date of this report, we are not aware of any pending or threatened claims and litigation that could have a material impact on our financial position or results of operations.

The Company actively monitors and manages our commitments and contingencies to mitigate potential risks and liabilities. We maintain appropriate accounting policies and procedures to ensure that all significant commitments and contingencies are properly recognized, measured, and disclosed in our combined financial statements and related disclosures.

**<u>seasonality</u>**

While our whisky products enjoy consistent demand from a dedicated customer base of collectors, connoisseurs, and enthusiasts, we recognize that the broader whisky market experiences seasonal fluctuations. Historically, the industry sees heightened demand during the holiday season, particularly in November and December, driven by increased social gatherings, gift-giving, and celebratory consumption. Additionally, the summer months, typically June through August, may also see elevated sales due to outdoor events and social occasions where whisky is a popular choice.

Although we benefit from a stable core demand for premium whisky, these seasonal trends can influence our quarterly sales and operating results. As a result, our financial performance may vary from quarter to quarter, and the results of any single period may not be indicative of full-year performance. Should sales during these key seasonal periods fall below historical trends, our annual revenues and earnings could be adversely affected.

To mitigate the impact of seasonality, we employ strategic inventory management, marketing initiatives, and distribution planning to align with peak demand periods while maintaining sufficient supply to serve our year-round customer base. Nevertheless, fluctuations in consumer behavior, macroeconomic conditions, or other external factors could amplify or disrupt these seasonal patterns, potentially affecting our financial results.

**<u>tREND INFORMATION</u>**

Other than as described elsewhere in this Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information to not necessarily be indicative of future operating results or financial condition.

**<u>inflation</u>**

Our business operations and financial results can be influenced by inflationary pressures, which can impact various aspects of our cost structure and profitability. Inflation can lead to higher prices for raw materials, energy, transportation, and labor, potentially increasing our overall operating costs.

For the six months ended June 30, 2025, Taiwan experienced inflation rates of 1.9%, as measured by the Consumer Price Index (CPI). These inflationary pressures manifested in the form of higher prices for raw materials, energy, transportation, and labor, potentially increasing our overall operating costs. We experienced inflationary pressures on certain key input costs, including procurement costs of our whisky products and labor costs. These inflationary pressures resulted in an increase in our overall cost of goods sold and operating expenses.

We continuously review our operational processes and supply chain to identify opportunities for cost savings and efficiency improvements, helping offset the impact of rising input costs.

While inflationary pressures can have an adverse impact on our profitability in the short term, we remain committed to implementing proactive measures to manage these challenges effectively.

**<u>Market risks</u>**

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***Currency risk***

As a company engaged in international trade, our operations are exposed to fluctuations in exchange rates. With customers and suppliers located in various countries, our revenue and expenses are denominated in multiple currencies. Fluctuations in exchange rates can have a direct impact on our reported financial results, cash flows, and overall profitability.

In addition to the transactional currency risks arising from our international trade operations, we are also exposed to translation risks due to the differences between our reporting currency, i.e. the U.S. dollar (USD), functional currency, i.e. New Taiwan dollar (NTD), and the currencies in which our transactions are denominated. While our functional currency is the NTD, which is the currency of the primary economic environment in which we operate, our combined financial statements are presented in USD for reporting purposes. Fluctuations in the exchange rate between the NTD and the USD can impact the translation of our financial results, leading to potential gains or losses on translation. These translation effects can influence our reported financial performance and position, even in the absence of any underlying changes in our operating results or cash flows denominated in NTD.

While we continue to monitor and evaluate our exposure to foreign currency risk, as of the date of this report, we have not implemented any formal hedging policy or entered into any derivative instruments to mitigate such risk. We may consider adopting appropriate risk management strategies in the future as our business operations and exposure to foreign exchange fluctuations evolve.

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***Concentration and credit risks***

Financial instruments that potentially expose us to concentration of credit risk consist primarily of account receivables. We conduct credit evaluations of our customers and generally do not require collateral or other security from them. We evaluate our collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. We conduct periodic reviews of financial conditions and payment practices of our customers to minimize collection risk on account receivables.

<u>Concentration of customers</u>

We have the following customers accounted for 10% or more of sales for the six months ended June 30, 2024 and 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **US$** | **%** | **US$** |  | **%** |
| Customer A | 919581 | 66.52% |  | # |  |
| Customer B | 271940 | 19.67% |  | # |  |
| Customer C | — \* | — \* | 489854 |  | 26.01 |
| Customer D | — \* | — \* | 456489 |  | 24.24 |
| Customer E | — \* | — \* | 197595 |  | 10.49 |

---

\* Less than 10% of the sales for the six months ended June 30, 2024.

# Less than 10% of the sales for the six months ended June 30, 2025.

We have the following customers accounted for 10% or more of account receivables as of December 31, 2024 and June 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** |
|  | **US$** | **%** | **US$** |  | **%** |
| Customer A | 250587 | 34.92% |  | # |  |
| Customer B | 105786 | 14.74% | 160804 |  | 11.83 |
| Customer C | 104107 | 14.51% |  | # |  |
| Customer D | 73272 | 10.21% |  | # |  |
| Customer E | — \* | — \* | 546630 |  | 40.20 |
| Customer F | — \* | — \* | 220497 |  | 16.22 |
| Customer G | — \* | — \* | 154004 |  | 11.33 |

---

\* Less than 10% of the account receivables as of December 31, 2024.

# Less than 10% of the account receivables as of June 30, 2025.

<u>Concentration of suppliers</u>

We have the following suppliers accounted for 10% or more of purchases for the six months ended June 30, 2024 and 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **US$** | **%** | **US$** |  | **%** |
| Supplier A | 533652 | 50.15% |  | # |  |
| Supplier B | 271171 | 25.48% |  | # |  |
| Supplier C | 153092 | 14.39% | 676392 |  | 71.62 |

---

# Less than 10% of the purchases for the six months ended June 30, 2025.

We have the following suppliers accounted for 10% or more of account payables as of December 31, 2024 and June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of June 30, 2025** | **As of June 30, 2025** |
|  | **US$** | **%** | **US$** | **%** |
| Supplier A | 191200 | 57.22% | 211974 | 26.00% |
| Supplier B | 142905 | 42.77% | 158431 | 19.43% |
| Supplier C | — \* | — \* | 399395 | 48.99% |

---

\* Less than 10% of the account payables as of December 31, 2024.

***Interest rate risk***

As part of our financing strategy, we have obtained borrowings from a local bank in Taiwan. These borrowings are subject to fluctuations in interest rates, which can directly impact our financial expenses and profitability. An increase in interest rates can lead to higher borrowing costs, while a decrease in interest rates can result in lower financing costs.

As of the date of this report, we have not implemented any formal hedging policy or entered into any derivative instruments to mitigate our interest rate risk.

***Other market risks***

In addition to currency and interest rate risks, our business operations may be exposed to other market risks, such as commodity price fluctuations, changes in customer demand, or shifts in market conditions. We continuously monitor these risks and implement appropriate risk management strategies to mitigate their potential impact on our financial performance and operations.

**<u>critical accounting policies and estimates</u>**

Management uses estimates and assumptions in preparing these combined financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

While all significant accounting policies are more fully described in Note 2 (Summary of significant accounting policies) in our audited combined financial statements and unaudited combined and consolidated financial statements, we believe that the following accounting estimates are critical to our business operations and understanding of our financial results.

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***Expected credit losses on account receivables***

The determination of the appropriate level of expected credit loss on accounts receivables is a critical accounting estimate that requires significant judgment and consideration of various factors.

We recognize an allowance for expected credit losses on our accounts receivables based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. We use the simplified approach permitted by the accounting standards, which requires lifetime expected credit losses to be recognized from the initial recognition of the receivables.

In estimating the expected credit loss, we consider several factors, including the aging of the accounts receivables, the credit quality and payment history of our customers, current and forecasted economic conditions, and any specific customer or industry-related risks. We also evaluate the need for specific reserves against individual exposures based on the customer's creditworthiness, past collection history, and other relevant information.

The assessment of expected credit losses involves significant judgments and estimates, and actual results may differ from our estimates. We regularly review and update our assumptions and methodologies used in calculating the expected credit loss allowance to ensure they appropriately reflect changes in circumstances and economic conditions.

Given the inherent uncertainties and judgments involved in estimating expected credit losses, a change in our assumptions or estimates could result in a material adjustment to the allowance for credit losses and consequently impact our financial results.

As of December 31, 2024, and June 30, 2025, there was no expected credit loss on account receivables.

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***Inventory Provision***

The determination of the appropriate level of inventory provision is a critical accounting estimate that requires significant judgment and consideration of various factors.

Our inventory consists primarily of aged whisky products, which are subject to potential obsolescence, deterioration, or other factors that may affect their net realizable value. We regularly review our inventory levels, aging, and turnover to identify slow-moving or obsolete items.

In estimating the inventory provision, we consider several factors, including:

● Aging and maturation of the whisky products: As whisky ages, it may become more valuable, but it is also susceptible to evaporation and other factors that could affect its quality and salability.

● Market demand and pricing trends: We assess the current and forecasted market demand for our whisky products, as well as pricing trends, to determine if any adjustments to the net realizable value are necessary.

● Physical condition and quality: We evaluate the physical condition and quality of our inventory, taking into account any issues related to storage conditions, packaging, or other factors that may impact the salability of the products.

● Historical and forecasted inventory turnover: We analyze historical inventory turnover rates and forecasted sales patterns to identify slow-moving or potentially obsolete inventory items.

The assessment of inventory provisions involves significant judgments and estimates, and actual results may differ from our estimates. We regularly review and update our assumptions and methodologies used in calculating the inventory provision to ensure they appropriately reflect changes in circumstances and market conditions.

Changes in our estimates and assumptions related to inventory provisions could have a material impact on our financial results. An increase in the inventory provision would decrease the carrying value of our inventory and result in a corresponding increase in cost of sales and a decrease in gross profit.

**<u>off-balance sheet arrangements</u>**

There were no off-balance sheet arrangements for the six months ended June 30, 2025, that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

**<u>Accounting standards and REcently accounting pronouncements</u>**

See Note 3 (Recent Accounting Pronouncements) in our unaudited combined and consolidated financial statements for a discussion of recent accounting pronouncements.