# EDGAR Filing Document

**Accession Number:** 0001947861
**File Stem:** 0001213900-26-061507
**Filing Date:** 2026-5
**Character Count:** 247096
**Document Hash:** caf0f81dc33546d13295be8f98d28fd8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-061507.hdr.sgml**: 20260527

**ACCESSION NUMBER**: 0001213900-26-061507

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 100

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260527

**DATE AS OF CHANGE**: 20260527

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Nature's Miracle Holding Inc.
- **CENTRAL INDEX KEY:** 0001947861
- **STANDARD INDUSTRIAL CLASSIFICATION:** FARM MACHINERY & EQUIPMENT [3523]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41977
- **FILM NUMBER:** 261026286

**BUSINESS ADDRESS:**
- **STREET 1:** 858 NORTH CENTRAL AVENUE
- **CITY:** UPLAND
- **STATE:** CA
- **ZIP:** 91786
- **BUSINESS PHONE:** 888-420-3694

**MAIL ADDRESS:**
- **STREET 1:** 858 NORTH CENTRAL AVENUE
- **CITY:** UPLAND
- **STATE:** CA
- **ZIP:** 91786

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LBBB Merger Corp.
- **DATE OF NAME CHANGE:** 20220922

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

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM** **10-Q**

**(Mark One)**

**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026**

**or**

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**FOR THE TRANSITION PERIOD FROM _________ to __________**

**COMMISSION FILE NUMBER 001-41977**

**NATURE'S MIRACLE HOLDING INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **88-3986430** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **3281 E. Guasti Rd. #704<br> Ontario, CA 91761** | **(909) 218-4601** |
| (Address of principal executive offices) (Zip Code) | (Registrant's telephone number, including area code) |

---

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

---

| | |
|:---|:---|
| **Title of each class** | **Trading symbol(s)** |
| Common Stock, par value $0.0001 per share | NMHI\* |
| Warrants to purchase Common Stock, at an exercise price of $11.50 per share | NMHIW\* |

---

\* The securities of Nature's Miracle Holding Inc. have been suspended from trading on The Nasdaq Stock Market and are currently trading on the OTC Market.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of May 26, 2026, the registrant had a total of 606,629,892 shares of its common stock, par value $0.0001 per share, issued and outstanding.

**INDEX**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| [PART I. FINANCIAL INFORMATION](#a_001) | [PART I. FINANCIAL INFORMATION](#a_001) | 1 |
| Item 1. | [Consolidated Condensed Financial Statements (unaudited)](#a_002) | 1 |
|  | [Consolidated Condensed Balance Sheets](#a_003) | 1 |
|  | [Consolidated Condensed Statements of Operations and Comprehensive Loss](#a_004) | 2 |
|  | [Consolidated Condensed Statements of Changes in Stockholders' Deficit](#a_005) | 3 |
|  | [Consolidated Condensed Statements of Cash Flows](#a_006) | 4 |
|  | [Notes to Financial Statements](#a_007) | 5 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 43 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_009) | 52 |
| Item 4. | [Controls and Procedures](#a_010) | 52 |
| [PART II. OTHER INFORMATION](#a_011) | [PART II. OTHER INFORMATION](#a_011) | 53 |
| Item 1. | [Legal Proceedings](#a_012) | 53 |
| Item 1A. | [Risk Factors](#a_013) | 54 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_014) | 55 |
| Item 3. | [Defaults Upon Senior Securities](#a_015) | 55 |
| Item 4. | [Mine Safety Disclosures](#a_016) | 55 |
| Item 5. | [Other Information](#a_017) | 55 |
| Item 6. | [Exhibits](#a_018) | 56 |
| [SIGNATURES](#a_019) | [SIGNATURES](#a_019) | 57 |

---

i

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "intend," "seek," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," "might," "forecast," "continue," or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:

● Our ability to effectively operate our business segments;

● Our ability to manage our research, development, expansion, growth and operating expenses;

● Our ability to evaluate and measure our business, prospects and performance metrics;

● Our ability to compete, directly and indirectly, and succeed in a highly competitive and evolving industry;

● Our ability to respond and adapt to changes in technology and customer behavior; and

● Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

ii

**PART I - FINANCIAL INFORMATION**

**ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NATURE'S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE**

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,**<br>**2026** | **As of<br> December 31,**<br>**2025** |
|  | **(Unaudited)** | |
| ASSETS |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $45695 | $97694 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 146491 | 153043 |
| &nbsp;&nbsp;&nbsp;Prepayments and other current assets | 236410 | 100027 |
| &nbsp;&nbsp;&nbsp;Loan receivable - related party | 605000 | 605000 |
| &nbsp;&nbsp;&nbsp;Other receivable - related party | 224873 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 1258469 | 955764 |
| NON-CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 931000 | 951000 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | 109711 | 133889 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 19223993 | 18370033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $21523173 | $20410686 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Short-term loans | $4636043 | $4192646 |
| &nbsp;&nbsp;&nbsp;Short-term loans - related parties | 194000 | 194000 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debts | 175066 | 466331 |
| &nbsp;&nbsp;&nbsp;Convertible notes | 1566553 | 1712875 |
| &nbsp;&nbsp;&nbsp;Convertible notes - related party | 321161 | 64414 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 3475437 | 9684893 |
| &nbsp;&nbsp;&nbsp;Accounts payable - related parties | 367937 | 366437 |
| &nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | 5756703 | 5178395 |
| &nbsp;&nbsp;&nbsp;Other payables - related parties | 907407 | 514891 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities - current | 113645 | 101327 |
| &nbsp;&nbsp;&nbsp;Commitment shares to be issued | 3112 | 171160 |
| &nbsp;&nbsp;&nbsp;Debt settlement shares to be issued | 750000 | - |
| &nbsp;&nbsp;&nbsp;Tax accrual | 471055 | 471731 |
| &nbsp;&nbsp;&nbsp;Deferred income - Contract liabilities | 56128 | 49731 |
| &nbsp;&nbsp;&nbsp;Deferred income - Contract liabilities - related party | 86468 | 86468 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 18880715 | 23255299 |
| NON-CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Long-term debts, net of current portion | 7426138 | 5402186 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, net of current portion | 8996 | 35684 |
| &nbsp;&nbsp;&nbsp;Long-term convertible notes - related party | 3000000 | 3000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Non-Current Liabilities | 10435134 | 8437870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | 29315849 | 31693169 |
| COMMITMENTS AND CONTINGENCIES |  |  |
| &nbsp;&nbsp;&nbsp;Redeemable convertible preferred stock ($0.0001 par value, 698 and 754 issued and outstanding at March 31, 2026 and December 31, 2025, respectively), at redemption value | 1467108 | 1458233 |
| SHAREHOLDERS' DEFICIT |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock ($0.0001 par value, 1,000,000 shares authorized, 5,000 and 5000 shares issued and outstanding; at March 31, 2026 and December 31, 2025, respectively) | - | - |
| &nbsp;&nbsp;&nbsp;Common stock ($0.0001 par value,1,000,000,000 shares authorized,308,306,016 and 112,852,596 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively) | 30833 | 11287 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 24691724 | 24049579 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (33981677) | (36800876) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (664) | (706) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Stockholders' Deficit | (9259784) | (12740716) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities and Stockholders' Deficit | $21523173 | $20410686 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**NATURE'S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS**)

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months<br> Ended**<br>**March 31,**<br>**2026** | **For the<br> Three Months<br> Ended**<br>**March 31,**<br>**2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| REVENUE (including related party revenue of nil and $17,422 for the three months ended March 31, 2026 and 2025) | $41605 | $1106819 |
| COST OF REVENUE | 38685 | 931519 |
| GROSS PROFIT | 2920 | 175300 |
| OPERATING EXPENSES: |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 1089802 | 1313111 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | 982 | 23283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1090784 | 1336394 |
| LOSS FROM OPERATIONS | (1087864) | (1161094) |
| OTHER INCOME (EXPENSE) |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (780714) | (897017) |
| &nbsp;&nbsp;&nbsp;Gain on loan extinguishment | - | 40000 |
| &nbsp;&nbsp;&nbsp;Gain on debt settlement | 5070520 | - |
| &nbsp;&nbsp;&nbsp;Change in fair value of commitment shares to be issued | 168048 | - |
| &nbsp;&nbsp;&nbsp;Other expense | (524716) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 3933138 | (857017) |
| INCOME (LOSS) BEFORE INCOME TAXES | 2845274 | (2018111) |
| PROVISION FOR INCOME TAXES | - | 1700 |
| NET INCOME (LOSS) | $2845274 | $(2019811) |
| OTHER COMPREHENSIVE INCOME (LOSS) |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 42 | 394 |
| COMPREHENSIVE INCOME (LOSS) | $2845316 | $(2019417) |
| BASIC WEIGHTED AVERAGE NUMBER OF COMMON STOCK | 159090737 | 4649263 |
| BASIC EARNINGS (LOSS) PER SHARE | $0.02 | $(0.43) |
| DILUTED WEIGHTED AVERAGE NUMBER OF COMMON STOCK | 270380478 | 4649263 |
| DILUTED EARNINGS (LOSS) PER SHARE | $0.01 | $(0.43) |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**NATURE'S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common stock** | **Common stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional paid in**<br>**capital** | **Accumulated**<br>**Deficit** | **Accumulated<br> other<br> comprehensive**<br>**loss** |<br>**Total** |
| BALANCE, December 31, 2025 | 5000 | $- | 112852596 | $11287 | $24049579 | $(36800876) | $(706) | $(12740716) |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  | - |  | - | 104795 | - | - | 104795 |
| &nbsp;&nbsp;&nbsp;Shares issued through convertible notes conversion |  | - | 169250919 | 16925 | 371146 | - | - | 388071 |
| &nbsp;&nbsp;&nbsp;Shares issued under equity line of credit |  | - | 14636713 | 1464 | 77288 | - | - | 78752 |
| &nbsp;&nbsp;&nbsp;Shares issued for purchase of convertible note |  | - | 360000 | 36 | 22837 | - | - | 22873 |
| &nbsp;&nbsp;&nbsp;Shares issued through preferred shares conversion |  | - | 11205788 | 1121 | 66079 | - | - | 67200 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  | - |  | - | - | - | 42 | 42 |
| &nbsp;&nbsp;&nbsp;Cumulative dividend for Series A, D and F preferred stock |  | - |  | - | - | (26075) | - | (26075) |
| &nbsp;&nbsp;&nbsp;Net income | - | - | - | - | - | 2845274 | - | 2845274 |
| BALANCE, March 31, 2026 (Unaudited) | 5000 | $- | 308306016 | $30833 | $24691724 | $(33981677) | $(664) | $(9259784) |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common stock** | **Common stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional paid in**<br>**capital** | **Accumulated**<br>**Deficit** | **Accumulated<br> other comprehensive**<br>**loss** |<br>**Total** |
| BALANCE, December 31, 2024 |  | $&nbsp;&nbsp;&nbsp;&nbsp;- | 2445364 | $246 | $10396274 | $(24734689) | $(981) | $(14339150) |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  |  | 84091 | 8 | 84928 |  |  | 84936 |
| &nbsp;&nbsp;&nbsp;Shares to be issued for stock compensation |  |  | (834) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shares issued through warrants exercises |  |  | 1839023 | 184 | 865239 |  |  | 865423 |
| &nbsp;&nbsp;&nbsp;Shares issued through debt-to-equity conversion |  |  | 568182 | 57 | (57) |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  |  |  |  |  |  | 394 | 394 |
| &nbsp;&nbsp;&nbsp;Net loss |  | - | - | - | - | (2019811) | - | (2019811) |
| BALANCE, March 31, 2025 (Unaudited) |  | $- | 4935826 | $495 | $11346384 | $(26754500) | $(587) | $(15408208) |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**NATURE'S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months <br> Ended**<br>**March 31,**<br>**2026** | **For the<br> Three Months <br> Ended**<br>**March 31,**<br>**2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $2845274 | $(2019811) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation expense | 146040 | 39860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 982 | 23283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of operating right-of-use asset | 24178 | 114226 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance cost | 279578 | 53303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on loan extinguishment | - | (40000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on debt settlement | (5070520) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock compensation expenses | 104795 | 84936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of commitment shares to be issued | (168048) | - |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 5570 | 305254 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | - | 911468 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayments and other current assets | (136384) | 29130 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivable - related party | (224873) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit | 20000 | (40748) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (87435) | (910664) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | 578309 | 979496 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable - related parties | 85569 | 2579 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (14370) | (12656) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax accrual | (677) | (22111) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income - Contract liabilities | 6397 | (91716) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1605615) | (594171) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Deposit from investment of Future Tech | - | (300000) |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (1000000) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1000000) | (300000) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Capital contribution in advance | 50000 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of warrants | - | 865423 |
| &nbsp;&nbsp;&nbsp;Payments of deferred offering costs | - | (58053) |
| &nbsp;&nbsp;&nbsp;Proceeds from shares issued under equity line of credit | 78752 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from long-term loan borrowing | 4981823 | - |
| &nbsp;&nbsp;&nbsp;Repayments on long-term loan | (7215) | - |
| &nbsp;&nbsp;&nbsp;Short-term loan borrowing from third parties | - | 447555 |
| &nbsp;&nbsp;&nbsp;Repayments on short-term loan from third parties | (2771341) | (483758) |
| &nbsp;&nbsp;&nbsp;Repayments on short-term loan from related parties | - | (150000) |
| &nbsp;&nbsp;&nbsp;Convertible notes borrowing | 240042 | 115000 |
| &nbsp;&nbsp;&nbsp;Repayments on convertible notes | (25433) | (264870) |
| &nbsp;&nbsp;&nbsp;Borrowings from other payables - related parties | 6946 | 20000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 2553574 | 491297 |
| EFFECT OF FOREIGN EXCHANGE ON CASH | 42 | 395 |
| CHANGES IN CASH | (51999) | (402479) |
| CASH AND CASH EQUIVALENTS, beginning of period | 97694 | 420131 |
| CASH AND CASH EQUIVALENTS, end of period | $45695 | $17652 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for income tax | $- | $1700 |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $391744 | $286593 |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: |  |  |
| &nbsp;&nbsp;&nbsp;Conversion of convertible notes into shares | $388071 | $- |
| &nbsp;&nbsp;&nbsp;Debt settlement of third party's debt | $6120520 | $- |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**Nature's Miracle Holding Inc., Subsidiaries and VIE Notes to Unaudited Condensed Consolidated Financial Statements**

**Note 1 — Nature of business and organization**

Nature's Miracle Holding Inc., which until March 11, 2024 was known as LBBB Merger Corp. (the "Company", "Nature's Miracle") is a company incorporated on August 1, 2022 under Delaware law as a wholly owned subsidiary of the Lakeshore Acquisition II Corp., a Cayman Islands exempted company ("Lakeshore").

On March 11, 2024, Lakeshore merged with and into the Company for the sole purpose of reincorporating Lakeshore into the State of Delaware ("Reincorporation"). Immediately after the Reincorporation, the Company consummated the merger contemplated by the Merger Agreement between the Company and Nature's Miracle, Inc., a Delaware corporation ("NMI"), resulting in the stockholders of NMI becoming 84.7% stockholders of the Company and the Company becoming the 100% stockholder of NMI. ("the Merger").

Pursuant to the Merger Agreement, at the effective time of the Merger, each share of NMI common stock issued and outstanding immediately prior to the effective time was canceled and automatically converted into the right to receive the applicable pro rata portion of shares of the Company common stock, the aggregate value of which was equal to: (a) $230,000,000 minus (b) the estimated Closing Net Indebtedness (as defined in the Merger Agreement) (the "Merger Consideration").

The Merger is considered as a reverse recapitalization in accordance with Accounting Standards Codification ("ASC") 805-40. Under this method of accounting, Lakeshore will be treated as the "acquired" company for financial reporting purposes. This determination is primarily based on NMI's stockholders comprise 84.7% of the voting power of the Company, directors appointed by NMI constituting three of the five members of the Company's board of directors, NMI's operations prior to the Merger comprising the only ongoing operations of the Company, and NMI's senior management comprising all of the senior management of the Company.

Accordingly, for accounting purposes, the financial statements of the Company will represent a continuation of the financial statements of NMI with the Merger treated as the equivalent of NMI issuing stock for the net assets of Lakeshore, accompanied by a recapitalization. The net assets of Lakeshore will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be presented as those of NMI in financial statements of the Company. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements in accordance with ASC 805-50-45-5.

The Company is a growing agriculture technology company focusing on the greenhouse and cultivation industry and providing products to indoor growers in a CEA (Controlled Environment Agriculture) setting in North America.

Reorganization under NMI

NMI is a holding company incorporated on March 31, 2022 in Delaware. NMI has no substantial operations other than holding all the outstanding share capital of its subsidiaries. NMI, its subsidiaries and variable interest entity ("VIE").

On June 1, 2022, NMI entered into the Share Exchange Agreements with the stockholders of Visiontech Group, Inc., a California Company ("Visiontech"), resulting in the stockholders of Visiontech becoming 56.3% stockholders of NMI and NMI becoming the 100% stockholder of Visiontech.

The transaction was accounted as a reverse recapitalization in accordance with ASC 805. The process of identifying the accounting acquirer began with a consideration of the guidance in ASC 810-10 related to determining the existence of a controlling financial interest. The general rule provided by ASC 810-10 is that the party that holds directly or indirectly greater than 50% of the voting shares has a controlling financial interest. As such, NMI is treated as the "acquired" company for financial reporting purposes. This determination was primarily based on the stockholders of Visiontech to have a majority of the voting power of the post-combination company, Zhiyi (Jonathan) Zhang, former president of Visiontech, became the President of NMI, the relative size of Visiontech compared to NMI. Accordingly, for accounting purposes and the combination was treated as the equivalent of Visiontech issuing shares for the net assets of NMI, accompanied by a recapitalization. The net assets of NMI are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination would be those of Visiontech.

On June 1, 2022, NMI also entered into the Share Exchange Agreements with the stockholders of Hydroman, Inc. ("Hydroman", a California Company) to acquire 100% of Hydroman by issuing 6,844,000 shares of NMI's common stock to the stockholders of Hydroman. The transaction was accounted for as a business combination according with ASC 805 where NMI (post combination with Visiontech) is both the legal and accounting acquirer. On November 11, 2024, Hydroman, Inc. changed its name to Hydroman Electric Corporation and will focus on business of electric vehicles distribution.

On July 28, 2022, Nature's Miracle (California), Inc., ("NMCA"), a California corporation wholly owned by NMI was incorporated. NMCA focuses on greenhouse development services and started providing container grow sales in first quarter of 2024.

On August 27, 2021, Visiontech and Upland 858 LLC ("Upland"), who share common stockholders with Visiontech, entered into a promissory note agreement. Upland is a special purchase entity set up to purchase and hold a warehouse located in California. Upland promised to pay to Visiontech the sum of $1,574,079, together with simple interest thereon at the rate of 4.9% per annum. All sums of principal and unpaid interest thereon shall be due and payable in full to Visiontech on August 28, 2026. On January 10, 2022, Upland entered into a $3,000,000 commercial loan at a fixed rate of 3.79% with Bank of the West. With the funding from Visiontech and the bank, Upland purchased a warehouse located in California at the price of $4,395,230. On February 1, 2022, Upland leased the warehouse to Visiontech through a single lease agreement. As such, Visiontech is exposed to the variability of the building owned by Upland and Upland is a VIE of Visiontech. Visiontech is the primary beneficiary of Upland since Visiontech has a controlling financial interest in Upland and it has both (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE.

On August 27, 2022, Upland entered into an assignment and assumption of unsecured promissory note with Zhiyi (Jonathan) Zhang, Vartor Vahe Doudakian and Yang Wei (collectively "Assignees"). Upland transferred to Assignees all of its right, title, duties, liabilities and obligation under the promissory note signed by and among Visiontech and Upland on August 27, 2021 in the original principal amount of $1,574,079. Visiontech also provided the consent to surrender its right to collect from Upland. As the stockholders are de facto agents of Visiontech, Visiontech and its de facto agents continue to bear the risk of losses or the rights to receive benefits from Upland. As such, in accordance with ASC 810, Upland is considered variable interest entity("VIE") of Visiontech and the financial statements of Upland was consolidated from the date of control and variable interest existed. See Note 4 for details.

On May 10, 2024, NM Data, Inc. ("NM Data"), a Nevada corporation wholly owned by the Company was incorporated. NM Data is a shell company and has no operations.

On October 18, 2024, NM Rebate, Inc. ("NM Rebate"), a California corporation wholly owned by the Company was incorporated. NM Rebate focus on energy rebate solutions combined with the supply of LED lights that qualify for energy-saving rebates provided by large utility companies throughout the U.S.

On November 18, 2024, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect a one-for-thirty (1-for-30) reverse split (the "Reverse Split"). The Reverse Split became effective on November 21, 2024. As a result of the Reverse Split, every 30 shares of the Company's issued and outstanding common stock were automatically converted into one share of common stock, with no change to the par value per share. All share and per share data has been retroactively restated to reflect the current capital structure and the Reverse Split of the Company.

On September 18, 2025, the Company entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Big Lake Capital LLC ("Big Lake"), pursuant to which, the Company agreed to purchase from Big Lake all of the membership interests of Zak Properties, LLC, an Ohio limited liability company ("Zak Properties"), which in turn owns certain real property located in the State of Ohio, commonly known as 405 Madison Ave. The Company's Chief Executive Officer and Chairman, Tie (James) Li, is the sole member of Zak Properties prior to the sale. For details see related party transaction in Note 6 – Asset acquisition under common control.

**Note 2 — Going concern**

In assessing liquidity, the Company monitors and analyzes cash on-hand and operating expenditure commitments. The Company's liquidity needs are to meet working capital requirements and operating expense obligations. To date, the Company financed its operations primarily through cash flows from operations, debt financing from financial institution and related parties. As of March 31, 2026 and December 31, 2025 the Company had approximately $46,000 and $98,000 in cash which primarily consists of bank deposits, which are unrestricted as to withdrawal and use. The Company's working capital deficit was approximately $17.6 million and $22.3 million as of March 31, 2026 and December 31, 2025. The Company's accumulated deficit and negative operating cash flow for the three months ended March 31, 2026 amounted to $33,981,677 and $1,605,615, respectively.

The Company has experienced recurring losses from operations and negative cash flows from operating activities since 2022. Although the Company reported net income of approximately $2.8 million for the three months ended March 31, 2026, such net income was primarily attributable to a non-recurring gain on debt settlement of approximately $5.1 million recognized during the period. The Company continued to incur losses from operations of approximately $1.1 million and negative cash flows from operating activities of approximately $1.6 million for the three months ended March 31, 2026. In addition, the Company had, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund its expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company's cost structure. In connection with the Company's assessment of going concern considerations in accordance with the Financial Accounting Standard Board's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that these conditions raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources:

● financial support from the Company's related parties and stockholders;

● other available sources of financing from banks and other financial institutions;

● equity financing through capital market.

The Company has a $20 million equity financing program ("ELOC") with GHS Investments, LLC and this was declared effective by SEC. The Company can draw on this facility for its working capital needs and others. The Company received $78,752 and nil for the three months ended March 31, 2026 and 2025 under this facility, with approximately $19.7 million of credit still available.

The Company has access to investors who are providing convertible notes financing for public companies and the Company has been utilizing the convertible notes for part of its financing needs.

The shareholder of the Company also offers support for the Company. Big Lake Capital, LLC, a related party controlled by Tie Li (our Chairman and CEO) entered into a $2 million Convertible Promissory Note on April 11, 2025 with the initial tranche of $600,000. The Company has borrowed $170,000 and nil for the three months ended March 31, 2026 and 2025 under this note, with $1,016,400 of credit still available.

The Company can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Company and would materially adversely affect its ability to continue as a going concern.

The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

**Note 3 — Basis of presentation and summary of significant accounting policies**

<u>Basis of presentation</u>

The unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company's financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation.

<u>Principles of consolidation</u>

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries, which include its wholly owned subsidiaries and VIE over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries and VIE have been eliminated upon consolidation.

<u>Use of estimates and assumptions</u>

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates.

<u>Cash and cash equivalents</u>

Cash and cash equivalents consist of amounts held as cash on hand and bank deposits.

From time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $250,000 currently insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash. The amount in excess of the FDIC insurance was $0 as of March 31, 2026.

<u>Prepayments and other current assets</u>

Prepaid expenses and other current assets primarily include prepaid expenses paid to product providers, and other deposits. Management regularly reviews the aging of such balances and changes in payment and realization trends and records allowances when management believes collection or realization of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of March 31, 2026 and December 31, 2025, no allowance for doubtful account was recorded.

<u>Accounts receivable, net</u>

Starting from January 1, 2023, the Company adopted ASU No.2016-13 "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASC Topic 326"). The Company used a modified retrospective approach, and the adoption does not have an impact on our unaudited condensed consolidated financial statements. During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. An allowance for expected credit loss is recorded in the period in which loss is determined to be probable based on lifetime expected losses considering historical, current, and forecasted conditions. Amounts deemed uncollectible are written off against the allowance after all collection efforts have ceased.

<u>Inventory</u>

Inventory consists of finished goods ready for sale and is stated at the lower of cost and net realizable value. The Company values its inventory using the weighted average costing method. The Company's policy is to include as a part of cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in cost of revenue. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence.

If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also reviews inventory for slow moving inventory and obsolescence and records impairment for obsolescence. During the three months ended March 31, 2026 and 2025, the Company recorded inventory impairment losses of $0 and $0, respectively.

<u>Deposits</u>

Deposits consist of security deposits for vendors and deposits for acquisition. To maintain a stable supply for goods and build a long-term relationship, the Company may pay certain amount of funds to its vendors as security deposits which are recorded as non-current assets on the balance sheet depending on its return date. On November 22, 2024, NM Data entered into an investment agreement to acquire 51% of Future Tech Incorporated ("Future Tech"), an Ohio-based company, for the development and construction of a 50MW high density data center and a vertical farming facility in Stryker, Ohio. The closing of the acquisition of Future Tech is subject to Future Tech's executing an electricity sales and purchase agreement with a certain supplier set forth in the agreement and Future Tech entering into a ten-year lease option to purchase indoor space as set forth in the agreement. As of March 31, 2026, the deposit for acquisition of Future Tech was $721,000. The Company also made a deposit with Datavault AI for licensing fee of $200,000 for certain intellectual properties related to business in the field of tokenization of assets using cryptocurrencies. In addition, the Company had rent deposits of $10,000 as of March 31, 2026.

<u>Property and equipment</u>

Property and equipment are stated at historical cost. Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets are as follows:

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| | |
|:---|:---|
|  | **Useful Life** |
| Machinery and equipment | 5 years |
| Computer and peripherals | 3 years |
| Trucks and automobiles | 5 years |
| Building improvements | 39 years |
| Buildings | 39 years |

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The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of operations. Expenditures for maintenance and repairs are expensed as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized.

<u>Long-lived assets impairment</u>

The Company reviews the impairment of its long-lived assets on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include but are not limited to, a significant deterioration of operating results, a change in the regulatory environment, changes in business plans, or adverse changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates the recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to result from the use and eventual disposition of the assets. If the assets are determined to be impaired, the impairment recognized is the excess of the carrying amount over the fair value of the assets. Fair value is generally determined by the discounted cash flow method. The discount rate used in any estimate of discounted cash flows is the rate commensurate with a similar investment of similar risk.

In connection with the preparation of the unaudited condensed consolidated financial statements as of March 31, 2026 and December 31, 2025, the Company evaluated potential impairment indicators related to its long-lived assets, including the Company's operating results and overall business conditions. The Company determined that substantially all long-lived assets, including vehicles and real estate holdings, continue to be utilized in operations and that their carrying values are recoverable. In addition, the Company's recently acquired Zak Property building in Ohio was evaluated and management determined that the carrying value was not impaired. Furniture and fixtures were not considered material to the unaudited condensed consolidated financial statements. Accordingly, no impairment of long-lived assets was recognized as of March 31, 2026 and December 31, 2025.

<u>Fair value measurement</u>

The Company adopted ASC Topic 820, *Fair Value Measurements and Disclosures* which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.

ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. 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.

When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.

<u>Fair values of financial instruments</u>

Financial instruments include cash and cash equivalents, accounts receivable, prepayments, loan receivable, and other current assets, other payable and accrued liabilities, accounts payable — related parties, short term loans and taxes payable. The Company considers the carrying amount of short-term financial instruments to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company's long-term debts are measured at amortized cost, no fair value option is elected.

<u>Revenue recognition</u>

The Company follows Accounting Standards Codification ("ASC") 606 Revenue Recognition and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.

The Company is a growing agriculture technology company providing CEA hardware products to growers in the controlled environment agriculture industry setting in North America. Majority of the Company's products were grow lights and related products for the indoor growing settings. The Company also provides indoor grow containers to its customers.

The Company's contracts with customers where the amounts charged per product is fixed and determinable, the specific terms of the contracts were agreed on by the Company including payment terms which are typically 30 to 60 days for existing customers and prepaid for most new customers. In certain contracts involving sales to customers that entered into rebate programs who can get rebates with utility companies for using LED lighting, payment term ranges from 60 to 120 days.

The Company's performance obligation is to deliver the products to customers. For indoor grow container products, the Company also involved in customization of the products to suit customer's specific needs. The provision of customization and configuration to meet certain technical specification per US market and delivery of product is considered one performance obligation as the services provided are not distinct within the context of the contract whereas the customers can only obtain benefit when the services and products are provided together. At times, the Company may charge customers shipping and handling for delivery of products, control of goods does not transfer to the customer before shipment, therefore shipping is not a promised service to the Company and is not considered a separate performance obligation. Any fee charged for shipping would be included in the transaction price for the good.

Transaction prices are mostly fixed. In some contracts, when determining the transaction price, the Company adjusts consideration for the effects of the time value of money if the timing of payments provides the Company with a significant benefit of financing. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customers and the transfer of the promised goods or services to the licensees will be one year or less. For customers that entered into rebate programs with utility companies, transaction price may depend on level of energy saving the products achieved. The Company estimated the amount of consideration using the expected value of the most likely amount depending on which method the Company expects to better predict the amount of consideration to which it will receive with a constraint applied such that a significant reversal of revenue is not probable.

The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized at a point in time when control of product transfer to customer and the Company has no further obligation to provide services related to such product evidenced by customer signing acceptances upon receipt of goods. Return allowances, which reduce product revenue by the Company's best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the criteria of ASC 606 — Revenue Recognition Principal-Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. The Company ships the products according to shipping terms on the purchase order or sales order. Once delivery is complete, the Company then sends an invoice to the customer according to the quantity and price of shipment.

The Company evaluates the indicators of control in accordance with ASU 2016-08: 1) the Company is the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer inquiries directly and handling of product returns or refunds directly if any. For grow light products, the Company has its own brand for marketing. For indoor grow containers products, the Company is also involved in the design and technical specification of the products to meet requirement in the US market. 2) The Company assumes inventory risk either through storing the products in its own warehouses; or for drop shipments directly from vendors, the Company takes the title from vendors through inspection and acceptance and is responsible for product damage during shipment period prior to acceptance of its customers and is also responsible for product return if the customer is not satisfied with the products. 3) The Company determines the resale price of the products. 4) The Company is the party that directs the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer, after evaluating the above scenario, the Company considers itself the principal of these arrangements and records revenue on a gross basis.

The Company's disaggregated revenue stream by products are summarized below:

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| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended** | **For the Three Months<br> Ended** |
|  | **March 31,<br> 2026<br> (Unaudited)** | **March 31,<br> 2025<br> (Unaudited)** |
| Grow light | $35366 | $850899 |
| Grow Media and others | 6239 | 255920 |
| Total | $41605 | $1106819 |

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Prepayments received from customers prior to the delivery of goods to customers or picked up by the customers are recorded as contract liability under the account Deferred income — contract liabilities.

Movements of deferred income — contract liabilities (including related party) consisted of the following as of the date indicated:

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| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
| Beginning balance | $136199 | $231258 |
| Prepayments from customers | 6397 | 212751 |
| Recognized as revenues | - | (307810) |
| Ending balance | $142596 | $136199 |

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The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company's customers, are treated as a reduction to the transaction price of the related transaction.

Sales discounts are recorded in the period in which the related sales are recognized. Sales return allowances are recorded and estimated based on historical returns which were generally immaterial to the Company.

Estimated warranty is immaterial because suppliers provide a warranty period of 1-5 years for all products, varying depending on the product type. After customers provide their purchase invoices and serial numbers for the return products, the factories will issue the replacement products. Additionally, the factories will also bear the corresponding shipping costs, making the company's warranty expenses negligible.

<u>Cost of revenue</u>

Cost of revenue mainly consists of costs for purchases of products and related storage, warehouse rent, outbound freight, delivery fees and payroll related expenses.

<u>Segment reporting</u>

The Company follows ASC 280, Segment Reporting. The Company's chief operating decision maker, the Chief Executive Officer, reviews the results of operations when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company's long-lived assets are all located in California, United States, and substantially all the Company's revenues are derived from within the USA. Therefore, no geographical segments are presented.

<u>Leases</u>

The Company follows ASC 842 — Leases ("ASC 842"), which requires lessees to record right-of-use ("ROU") assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements.

ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company generally uses its 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 operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

&nbsp;&nbsp;&nbsp;&nbsp;

<u>Income taxes</u>

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.

As a result of the implementation of certain provisions of ASC 740, Income Taxes ("ASC 740"), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company follows the provisions of ASC 740 and has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Delaware, as its "major" tax jurisdictions.

The Company believes that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company's policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

<u>Stock-based compensation</u>

The Company accounts for stock-based compensation awards to employees in accordance with FASB ASC Topic 718, "Compensation – Stock Compensation", which requires that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period.

The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received.

<u>Warrants</u>

The Company evaluates the public and private warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants' specific terms and applicable authoritative guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. Pursuant to such evaluation, both public and private warrants are classified in shareholders' equity.

For issued warrants that meet all of the criteria for equity classification and issued with debt instruments, the proceeds from the sale of the debt instruments are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants is accounted for as paid-in capital. The remainder of the proceeds is allocated to the debt instrument portion of the transaction at a discount and amortized over the term of the debt instrument using the effective interest rate method.

<u>Convertible notes</u>

Upon adoption of ASU 2020-06 on January 1, 2021, the elimination of the beneficial conversion feature ("BCF") and cash conversion models in ASC 470-20 that requires separate accounting for embedded conversion features in convertible instruments results in the convertible debt instruments being recorded as a single liability (i.e., there is no separation of the conversion feature, and all proceeds are allocated to the convertible debt instruments as a single unit of account). Unless conversion features are derivatives that must be bifurcated from the host contracts in accordance with ASC 815-15 or, in the case of convertible debt, if the instruments are issued with a substantial premium, in the latter case, ASC 470-20-25-13 requires the substantial premium to be attributable to the conversion feature and recorded in additional paid-in capital (APIC).

<u>Redeemable convertible preferred stock</u>

The Company accounts for its preferred shares in accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from Equity" (ASC 480). For preferred shares subject to mandatory redemption (if any) will be classified as a liability instrument and will be measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) will be classified as temporary equity. At all other times, ordinary shares will be classified as shareholders' equity. In accordance with ASC 480-10-S99, the Company classifies the Series A, D, and F preferred shares outside of permanent equity as the shares are subject to possible redemption after 120 days of closing. The Company recorded the Series A, D, and F preferred shares as temporary equity with accrued dividend included in redemption value.

<u>Commitments and Contingencies</u>

In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.

<u>Related party transactions</u>

A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the company's securities (i) the Company's management and or their immediate family, (i) 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 operating 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 caried 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.

<u>Earnings (loss) per share</u>

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of common stock by the weighted average number of common stock outstanding during the year. Diluted earnings (loss) per share presents the dilutive effect on a per share basis of the potential common stock (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings (loss) per share.

For the three months ended March 31, 2026 and 2025, basic earnings (loss) per share were $0.02 and $(0.43), respectively. For the three months ended March 31, 2026 and 2025, diluted earnings (loss) per share were $0.01 and $(0.43), respectively.

The following table presents the computation of basic and diluted earnings (loss) per share of common stock:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026<br> (Unaudited)** | **March 31,<br> 2025<br> (Unaudited)** |
| Basic earnings (loss) per share: |  |  |
| Net income (loss) attributable to common stockholders | $2845274 | $(2019811) |
| Deduct: Preferred dividend | 26075 | - |
| Net income (loss) used in computing basic earnings (loss) per share of common stock | 2819199 | (2019811) |
| Basic weighted average number of common stock | 159090737 | 4649263 |
| Basic earnings (loss) per share | $0.02 | $(0.43) |

---

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026<br> (Unaudited)** | **March 31,<br> 2025<br> (Unaudited)** |
| Diluted earnings (loss) per share: |  |  |
| Net income (loss) attributable to common stockholders | $2845274 | $(2019811) |
| Add: Preferred dividend | 26075 | - |
| Add: Interest expenses | 373834 | - |
| Net income (loss) used in computing diluted earnings (loss) per share of common stock | $3245183 | $(2019811) |
| Weighted average shares used in computing net income per share of common stock, basic | 159090737 | 4649263 |
| Add: Convertible notes | 62558143 | - |
| Add: Preferred shares | 48731598 | - |
| Weighted average shares used in computing net income per share of common stock, diluted | 270380478 | 4649263 |
| Diluted earnings (loss) per share | $0.01 | $(0.43) |

---

The 6,098,391 warrant shares were excluded from the calculation of diluted earnings (loss) per share attributable to common stockholders because their inclusion would have been anti-dilutive.

Recently issued accounting pronouncements

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 ("ASU 2024-03"), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's unaudited condensed consolidated balance sheets, statements of operations and comprehensive income (loss), changes in stockholders' deficit and cash flows.

**Note 4 — Variable interest entity**

The Company does not have direct ownership in Upland but has been actively involved in their operations and has the power to direct the activities and significantly impact Upland's economic performance. The Company also bears the risk of losses from Upland. As such, in accordance with ASC 810, Upland is considered variable interest entity ("VIE") of the Company and the financial statements of Upland was consolidated from the date of control and variable interest existed.

Based on the loan agreement between its creditor and Upland 858 LLC, the loan is a non-recourse debt secured by the assets owned by Upland 858 LLC only and guaranteed by the stockholders of Upland 858 LLC only. Upland 858 LLC's creditor will have no-recourse to Visiontech which is considered to be the primary beneficiary of the VIE structure but not the legal owner of Upland 858 LLC:

Accordingly, the accounts of Upland were consolidated in the accompanying financial statements as VIE of Visiontech from January 2022 when Upland acquired the warehouse in California.

The carrying amount of the assets and liabilities are as follows:

---

| | |
|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** |
| Cash | $99 |
| Property and equipment, net | 4025013 |
| Total assets | $4025112 |
| Current portion of long-term debt | $109149 |
| Long-term debt, net of current portion | 2578626 |
| Accrued expenses | 27636 |
| Intercompany payable to Visiontech | 1222877 |
| Total liabilities | $3938288 |

---

The operating results of VIE included in the unaudited condensed consolidated statements of operations are as follows for the period indicated:

---

| | |
|:---|:---|
|  | **For the<br> Three Months<br> Ended<br> March 31,<br> 2026<br> (Unaudited)** |
| Revenue<sup>\*</sup> | $83210 |
| Selling, general and administrative | 33187 |
| Interest expense | 23730 |
| Net income | $26293 |

---

\* Upland generated its revenue from leasing the warehouse to Visiontech. Revenue of Upland was fully eliminated on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

**Note 5 — Debt settlement with Megaphoton**

On August 22, 2023, two separate lawsuits were filed against NMI and two of its wholly-owned subsidiaries: Visiontech Group Inc., a California corporation, and Hydroman Inc., a California corporation (collectively referred to as the "Defendants") by Megaphoton. Megaphoton, a manufacturer and producer of artificial lighting equipment for use in agriculture and industrial applications, filed the lawsuits against the Defendants in Los Angeles Superior Court, asserting that the Defendants have breached a contract/guarantee agreement by failing to pay a total of $6,857,167, as per the terms of these agreements. NMI believes that there is no merit in the complaint and has filed a counter-suit against Megaphoton in Orange County Court, California, seeking affirmative relief on September 22, 2023. On March 5, 2024, Megaphoton filed requests to dismiss the cases against Hydroman and Visiontech in the Superior Court of Los Angeles. Subsequently, in 2026, Megaphoton and the Company agreed to a Mutual Release Agreement dated February 2, 2026 removing all claims, lawsuits and other disputed amounts.

On February 2, 2026, the Company entered into a Settlement and Mutual Release Agreement with Megaphoton, Inc. to resolve previously disclosed litigation pending in the United States District Court for the Central District of California. Pursuant to the agreement, the Company agreed, among other things, to (i) issue 15,000,000 unregistered shares of its common stock and register such shares on a Form S-1 no later than July 31, 2026, (ii) appoint Megaphoton's chief executive officer to the Company's board of directors and as President under an employment agreement, (iii) pay $300,000 on or before June 30, 2026, (iv) use best efforts to uplist its common stock within 180 days or issue an additional 15,000,000 shares if such uplisting is not approved, and (v) comply with certain share issuance restrictions. The agreement includes mutual releases of claims without admission of liability. As of March 31, 2026, the $300,000 obligation was included in other payable - related party in the unaudited condensed consolidated balance sheets.

On February 2, 2026, Mr. Du became the Company's President and a member of our board of directors. The Company's shares were valued at $750,000 on February 2, 2026. As of the date of this report, the Company expects that no additional shares will need to be issued to Mr. Du based on the Company's current efforts and progress to relist.

---

| | |
|:---|:---|
| Fair value of shares to be issued: | $750000 |
| Cash to be paid: | 300000 |
| Total consideration | 1050000 |
| Debt settled | 6120520 |
| Gain from debt settlement | $5070520 |

---

As of the date of filing, board approval has been obtained but issuance of the 15 million shares has not been completed. The Company expects to issue the shares to Mr. Du once the authorized shares for the Company are increased since the current authorized shares are being used for either issuance of new shares or held in reserve.

**Note 6 — Asset acquisition under common control**

On September 18, 2025, the Company entered into a Membership Interest Purchase Agreement with Big Lake, pursuant to which, the Company agreed to purchase from Big Lake all of the membership interests of Zak Properties, which in turn owns certain real property located in the State of Ohio, commonly known as 405 Madison Ave. The Company's Chief Executive Officer and Chairman, Tie (James) Li, is the sole member of Zak Properties prior to the sale. The purchase price for Zak Properties is $17,500,000, and will be paid by the Company as follows: (i) the Company shall issue 5,000 shares of Series B Preferred Stock (valued at $5,000,000) of the Company which (a) can be converted into Common Stock, par value $0.0001 per share, of the Company at $0.1180 per share and (b) have certain voting rights equal to twenty (20) votes per one (1) share of Series B Preferred Stock; (ii) the Company shall issue 9,500 shares of Series C Preferred Stock (valued at $9,500,000) of the Company which are convertible into shares of Common Stock at $0.1180 per share; and (iii) the Company shall issue a convertible promissory note (the "Note") in the principal amount of $3,000,000 in favor of Big Lake with a term of two years from the date of issuance and interest in the amount of 10% per annum. The Purchase Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The acquisition closed on September 18, 2025.

Since Big Lake, Zak Properties and the Company are under common control of Mr. Li and the asset acquired is concentrated in a single identifiable asset which is a building, the acquisition is accounted for as asset acquisition under common control where the assets are transferred at the cost basis on September 18, 2025. The excess of consideration paid over the carrying value was recorded as a reduction in the Company's additional paid in capital.

Fair value of consideration transferred:

---

| | |
|:---|:---|
| Series B and C preferred stock | $14440000 |
| Issuance cost of preferred stock | 60000 |
| Convertible promissory note | 3000000 |
| Total | $17500000 |

---

Carrying value of assets and liabilities transferred:

---

| | |
|:---|:---|
|  | **As of<br> September 18, 2025** |
| Current assets | $671682 |
| Property and equipment, net | 13334938 |
| Total assets | 14006620 |
| Total liabilities | (1530986) |
| Net assets | $12475634 |

---

Equity in the Company as a result of the asset acquisition increased as follows:

---

| | |
|:---|:---|
|  | **As of<br> September 18,<br> 2025** |
| Net assets acquired | $12475634 |
| Less: debt incurred | (3000000) |
| Less: cost associated with issuance of Series B and C preferred stock | (60000) |
| Increase in equity | $9415634 |

---

**Note 7 — Accounts receivable, net**

Accounts receivable, net consisted of the following as of the date indicated:

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
| Accounts receivable | $2266211 | $2271781 |
| Less: allowance for credit losses | (2119720) | (2118738) |
| Accounts receivable, net | 146491 | 153043 |
| Accounts receivable - related party | 730998 | 730998 |
| Less: allowance for credit losses – related party | (730998) | (730998) |
| Accounts receivable – related party, net | - | - |
| Total accounts receivable, net | $146491 | $153043 |

---

Provision for credit losses were $982 and $23,283 for the three months ended March 31, 2026 and 2025, respectively.

Movement of allowance:

Movement of allowance for expected credit losses (including related party) consisted of the following as of the date indicated:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026<br> (Unaudited)** | **December 31,<br> 2025<br> (Audited)** |
| Beginning balance | $2849736 | $1031585 |
| Addition | 982 | 1818151 |
| Ending balance | $2850718 | $2849736 |

---

**Note 8 — Property and equipment, net**

Property and equipment, net consists of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
| Trucks & Automobiles | $326252 | $326252 |
| Machinery & Equipment | 8287 | 8287 |
| Warehouse Equipment | 29984 | 29984 |
| Computers & Peripherals | 2783 | 2783 |
| Building | 12930503 | 12930503 |
| Building improvements | 8157418 | 7157418 |
| Land | 1150000 | 1150000 |
| Subtotal | 22605227 | 21605227 |
| Less: accumulated depreciation | (3381234) | (3235194) |
| Total | $19223993 | $18370033 |

---

Depreciation expense for the three months ended March 31, 2026 and 2025 amounted to $146,040 and $39,860, respectively.

**Note 9 — Loans payable**

<u>Short-term loans:</u>

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
| Factor H <sup>(1)</sup> | $640816 | $640816 |
| Factor J <sup>(2)</sup> | 34355 | 38255 |
| Factor L <sup>(3)</sup> | 129170 | 129170 |
| Jie Zhang <sup>(4)</sup> | 50000 | 70000 |
| RedOne Investment Limited ("RedOne") <sup>(5)</sup> | 230000 | 230000 |
| Agile Capital Funding, LLC <sup>(6)</sup> | 359344 | 359344 |
| J.J. Astor & Co.<sup>(7)</sup> | - | 1581212 |
| Yan Li<sup>(8)</sup> | - | 991348 |
| Newtek Business Services Holdco 6, Inc. <sup>(9)</sup> | 3059858 | - |
| Other loans | 132500 | 152500 |
| Total short-term loans | $4636043 | $4192646 |

---

Short-term loans consist of account receivable factoring agreements, subordinated business loan and third parties loans as of March 31, 2026 and December 31, 2025.

(1) On
October 23, 2023, the Merchants entered into a standard merchant cash advance agreement with Factor H. The Company sold $768,500 of its
accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $503,500 was remitted to the
Company, after the deduction of the total fees of $26,500. The Company agreed to pay a weekly installment of $22,814.84 for 32 weeks
with a final extra payment of $38,500. The effective interest rate of this agreement was 85.36%.

On May 2, 2024, the Merchants entered into another standard merchant cash advance agreement with Factor H. The Company sold $1,240,150 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $807,500 was remitted to the Company, after the deduction of the total fees of $42,500. The Company agreed to pay a weekly installment of $41,000 for 31 weeks. The effective interest rate of this agreement was 93.05%. The Company used this loan to pay off $175,314 previous loan with Factor H that dated on October 23, 2023.

On November 18, 2024, the Merchants entered into another standard merchant cash advance agreement with Factor H. The Company sold $1,167,200 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $752,000 was remitted to the Company, after the deduction of the total fees of $48,000. The Company agreed to pay a weekly installment of $32,000 for 37 weeks. The effective interest rate of this agreement was 94.98%. The Company used this loan to pay off $566,150 previous loan with Factor H that dated on May 2, 2024. For the three months ended March 31, 2026 and 2025, the Company paid $0 and $29,194 principal of the loan, respectively.

(2) On
September 27, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor J. The Company sold $72,500 of
its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $47,470 was remitted to
the Company, after the deduction of the total fees of $2,530. The Company agreed to pay a weekly installment of $3,021 for 24 weeks.
The effective interest rate of this agreement was 88.98%. For the three months ended March 31, 2026 and 2025, the Company paid $0 and
$28,838 principal of the loan, respectively.

On February 11, 2025, the Merchants entered into another standard merchant cash advance agreement with Factor J. The Company sold $94,250 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price $61,070 was remitted to the company, after the deduction of the total fees $3,930. The Company agreed to pay a weekly installment of $6,732 for 14 weeks. The effective interest rate of this agreement was 89.54%. The Company used this loan to pay off $18,125 previous loan with Factor J that dated on February 10, 2025. For the three months ended March 31, 2026 and 2025, the Company paid $3,902 and $12,437 principal of the loan, respectively.

(3) On
February 7, 2025, the Merchants entered into a standard merchant cash advance agreement with Wave advance Inc (the "Factor L").
The Company sold $183,750 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase
price of $107,500 was remitted to the Company, after the deduction of the total fees of $8,750. The Company agreed to pay a weekly
installment of $13,125 for 14 weeks. The effective interest rate of this agreement was 113.58%. For the three months ended
March 31, 2025, the Company paid $116,250 principal of the loan.

On February 25, 2025, the Merchant entered into another standard merchant cash advance agreement with Factor L. The Company sold $280,770 of its accounts receivable balance on a recourse basis for credit approved accounts. The net purchase price $177,630 was remitted to the company, after the deduction of the total fees of $13,370. The Company agreed to pay a weekly installment of $17,550 for 16 weeks. The effective interest rate of this agreement was 95.63%. The Company use this loan to pay off $157,500 previous loan with Factor L that dated on February 7, 2025 resulting in $20,000 of gain on debt settlement.

On August 1, 2025, the Company and Factor L signed a settlement agreement that required payments from August 5 to October 27, 2025, for an aggregate amount of $201,170. The Company agreed to pay a weekly installment of $18,000 for 11 weeks from August 5, 2025 to October 20, 2025, followed by a final installment of $3,170 on October 27, 2025. The Company use this settlement agreement to pay off a $198,670 previous loan with Factor I dated on February 25, 2025, resulting in a $2,500 loss on debt settlement. For the three months ended March 31, 2026 and 2025, the Company paid $0 and $22,068 principal of the loan, respectively.

These receivable purchase agreements were accounted for as secured borrowing under ASC 860 since there is no legal, actual, effective transfer of the receivables to the Factors. Rather, the Factors only have generally claim against the receivable pools not a particular receivable. As of March 31, 2026 and December 31, 2025, outstanding balance amounted to $804,340 and $808,241, respectively.

(4) On
October 30, 2023, NMI entered into a loan agreement with an independent third party pursuant to which the Company borrowed a principal
amount of $100,000 with an annual interest rate of 12% for a term of one year. The loan was originally extended to April 15,
2025, subsequently extended to July 16, 2025, then extended to November 16, 2025. On January 30, 2026, the third party entered into another
agreement under which both parties agreed that a final payment of $20,000 would be made, and the remaining balance and accrued interest
would be converted into the Company's stock. The final payment of $20,000 was made on January 30, 2026. The loan balance as of
March 31, 2026 and December 31, 2025 was $50,000 and $70,000, respectively. The shares were not issued as of March 31, 2026.

(5) On
February 10, March 28, June 5, June 27, September 22, December 22, 2023 and February 20, 2024, Lakeshore entered into seven promissory
notes with RedOne to which Lakeshore borrowed an aggregate principal amount of $380,000 with zero interest rate. On July 11, 2023,
Lakeshore entered into a loan agreement with Deyin Chen (Bill) to which Lakeshore borrowed a principal amount of $125,000 with an annual
interest rate of 8%. This loan was extended to March 11, 2024 with interest waived pursuant to a Side Letter to the loan agreements dated
December 8, 2023. A payment of $75,000 was made upon close of the Merger on March 11, 2024 and the loan balance of $50,000 owed to Deyin
Chen (Bill) was assigned to RedOne and the Company assumed the outstanding balance. The loan bears interest of 8% per annum. $50,000
was paid on July 29, 2024 and $150,000 was paid on November 11, 2024.

The balance of $230,000, originally due by December 11, 2024, was revised to be paid in two equal installments: the first installment of $115,000 no later than March 31, 2025, and the second installment of $115,000 no later than June 30, 2025. Both installments were extended to July 15, 2025, subsequently extended to September 10, 2025, and then extended to April 16, 2026. The loan matured on April 16, 2026 and has not been repaid as of the date of filing. Management assessed the matter and determined that no additional action is warranted at this time, as the loan is unsecured and the lender, a founder of the predecessor SPAC, has indicated no intention to take legal action.

(6) On
June 6, 2024, the Merchants entered into a subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile
Lending, LLC for the principal amount of $288,750, including the administrative agent fee of $13,750. The Company agreed to pay a weekly
installment of $15,056 for 28 weeks. The effective interest rate of this agreement was 90.22%. The collateral consists of the Company's
right, title and interest in and to including the Company's financial assets, goods, accounts, equipment, inventory, contract rights
or rights to payment of money. The Company received the net proceeds on June 7, 2024.

On September 25, 2024, the Merchants entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $315,000, including the administrative agent fee of $15,000. The Company agreed to pay a weekly installment of $16,425 for 28 weeks. The effective interest rate of this agreement was 90.22%. The Company used this loan to pay off $195,806 previous loan with Agile Capital Funding, LLC and Agile Lending, LLC that dated on June 6, 2024.

On November 21, 2024, the Merchants entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $575,000, including the administrative agent fee of $28,750. The Company agreed to pay a weekly installment of $29,982 for 28 weeks. The effective interest rate of this agreement was 90.80%. The Company used this loan to pay off $331,388 previous loan with Agile Capital Funding, LLC and Agile Lending, LLC dated on September 25, 2024. For the three months ended March 31, 2026 and 2025, the Company paid $0 and $76,776 principal of the loan, respectively.

(7) On
April 11, 2025, Zak Properties entered into a loan agreement with J.J. Astor & Co. ("JJ Astor"). Under the agreement,
JJ Astor loaned $1,650,000 to Zak Properties, which included a $66,000 origination fee, a $99,000 debt broker fee, a $15,000 legal fee,
and additional closing, title, and recording charges. The loan has a contractual maturity date of September 26, 2025. At closing, $480,000
of interest was withheld as an interest holdback and applied to the weekly payment structure. The effective interest rate was 43.39%.
In January 2026, Zak Properties paid off the outstanding loan balance along with an additional $236,000 of interest. For the three months
ended March 31, 2026, Zak Properties made principal payments of $1,650,000 on the loan.

(8) On
October 8, 2025, Zak Properties entered into a loan agreement with Yan Li. Under the agreement, Yan Li loaned $1,000,000 to Zak Properties.
The interest rate was 18.00% per annum and the maturity date was April 8, 2026. In January 2026, Zak Properties paid off the outstanding
loan balance along with an additional $46,200 of interest. For the three months ended March 31, 2026, Zak Properties made principal payments
of $1,000,000 on the loan.

(9) On
June 14, 2023, the Company's subsidiaries Visiontech and Hydroman entered into a secured business loan agreement with Newtek Business
Services Holdco 6, Inc. for a principal sum of up to $3,700,000 with a maturity date of July 1, 2033. The loan is secured by the Company's
building and guaranteed by the Company's major stockholders. During the three months ended March 31, 2026 and 2025, the Company
made total payments of $0 and $28,164 towards the loan, respectively. Since the Company is in default of the loan, the long term debt
is subject to recall by the lender, hence the balance of $3,059,858 long term portion of the debt was reclassified to short term loan.

Interest expense for short term loans amounted to $638,044 and $652,721 for the three months ended March 31, 2026 and 2025, respectively.

Short-term loans — related parties: refer to Note 11 Related Party transactions.

<u>Long-term debts:</u>

Long-term debts consist of four auto loans, one building loan, one secured business loan and one promissory note as of March 31, 2026 and December 31, 2025.

The outstanding amount of the auto loans were $113,668 and $113,668 as of March 31, 2026 and December 31, 2025, respectively. On February 27, 2021, the Company purchased a vehicle for $68,802 and financed $55,202 of the purchase price through an auto loan. The loan requires monthly installment payment of $1,014 with the last installment due on February 28, 2026. The Company subsequently sold the auto and paid off the loan on September 18, 2025. On June 8, 2021, the Company purchased the second vehicle for $86,114 and financed $73,814 of the purchase price through auto loan. The loan requires monthly installment payment of $1,172 with the last installment due on June 23, 2027. On September 28, 2022, the Company purchased the third vehicle for $62,230 and financed $56,440 of the purchase price through auto loan. The loan requires a monthly installment payment of $1,107 with the last installment due on September 28, 2027. On July 20, 2024, the Company purchased the fourth vehicle for $113,263 and financed $97,163 of the purchase price through auto loan. The loan requires a monthly installment payment of $2,403 with the last installment due on August 3, 2028. During the three months ended March 31, 2026 and 2025, the Company made total payments of $0 and $8,865 towards the auto loans, respectively.

Minimum required principal payments towards the Company's auto loans as of March 31, 2026 are as follows:

---

| | |
|:---|:---|
| **Twelve months ended March 31,** | **Repayment** |
| 2027 | $65917 |
| 2028 | 36458 |
| 2029 | 11293 |
| Total | $113668 |

---

The outstanding amount of the building loan was $2,687,776 and $2,694,990 as of March 31, 2026 and December 31, 2025, respectively. On January 10, 2022, the Company purchased one building and land for $4,395,230 and financed $3,000,000 of the purchase price through Bank of the West. The loan requires monthly installment payments of $15,165 with the last installment due on January 10, 2032. During the three months ended March 31, 2026 and 2025, the Company made total payments of $7,214 and $21,024 towards the loan, respectively.

Minimum required principal payments towards the Company's building loan as of March 31, 2026 are as follows:

---

| | |
|:---|:---|
| **Twelve months ended March 31,** | **Repayment** |
| 2027 | $109149 |
| 2028 | 90654 |
| 2029 | 94207 |
| 2030 | 97644 |
| Thereafter | 2296122 |
| Total | $2687776 |

---

The outstanding amount of the secured business loan was $3,059,858 and $3,059,858 as of March 31, 2026 and December 31, 2025, respectively. On June 14, 2023, the Company's subsidiaries Visiontech and Hydroman entered into a secured business loan agreement with Newtek Business Services Holdco 6, Inc. for a principal sum of up to $3,700,000 with a maturity date of July 1, 2033. The loan is secured by the Company's building and guaranteed by the Company's major stockholders. During the three months ended March 31, 2026 and 2025, the Company made total payments of $0 and $28,164 towards the loan, respectively. Since the Company is in default of the loan, the long term debt is subject to recall by the lender, hence the remaining balance of $3,059,858 long term debt was reclassified to short term loan, see Note 9 — short term loan for details.

The outstanding amount of the promissory note was $4,799,760 and $0 as of March 31, 2026 and December 31, 2025, respectively. On January 29, 2026, Zak Properties entered into a promissory note agreement with American Savings Life Insurance Company (the "Lender"), pursuant to which Zak Properties issued a promissory note in the principal amount of $5,000,000. The note bears interest at an annual rate of 8.50% and requires monthly payments of $35,416.67 commencing on March 1, 2026. The note matures on February 1, 2028, at which time the remaining unpaid principal and accrued interest are due, resulting in a balloon payment. Proceeds from the loan were primarily used to repay existing indebtedness, including the JJ Astor loan of $1,886,000, and the Yan Li loan of $1,046,200 (refer to Note 9 – Loans Payable). In connection with the financing, the Company incurred loan origination and related fees, including a $50,000 origination fee, $5,500 underwriting fee, $50,000 mortgage broker fee, and other closing costs, which are recorded as debt issuance costs and amortized over the term of the loan. During the three months ended March 31, 2026, the Company made total payments of $0 towards the loan.

Minimum required principal payments towards the Company's promissory note as of March 31, 2026 are as follows:

---

| | |
|:---|:---|
| **Twelve months ended March 31,** | **Repayment** |
| 2027 | $- |
| 2028 | 4799760 |
| Total | $4799760 |

---

Interest expenses for long term loans amounted to $99,065 and $152,993 for the three months ended March 31, 2026 and 2025, respectively.

**Note 10 — Convertible notes**

The Company entered into a series of convertible note agreements with investors as described below. The Company also determined that the embedded conversions in the notes meets the scope exception to be considered indexed to a reporting's own stock based on the two-step approach in accordance with ASC 815-40-15 and does not require to be separately accounted for as a derivative. As a result, the Company classified all the convertible notes as a debt instrument in its entirely.

On July 3, 2024, the Company entered into four convertible note agreements total of $410,000 from four investors. Each note bears 12% interest per annum and matures in six months. The Company shall repay the principal and accumulated interest after six months. If the investors choose to convert, the number of shares will be calculated by dividing the principal plus accumulated interest by $13.26. On November 19, 2024, the Company entered into four debt-to-equity conversion agreements, under which four investors agreed to convert a total of $410,000 into 155,303 shares of the Company's common stock at a conversion price of $2.64 per share. However, the Company failed to complete the registration of the converted shares within 45 calendar days as require by the conversion agreements, the investors has elected to decline the conversion and has elected to reinstate the original debt liability in accordance with the original agreement and extended the maturity date to June and September 2025, with two maturing in each month, subsequently extended to July 11, 2026. The balance of these notes are $410,000 and $410,000 as of March 31, 2026 and December 31, 2025.

On November 18, 2024, the Company signed one convertible note agreement of $90,000 from one investor. The note bears 12% interest per annum and matures in 6 months. The Company shall repay the principal and accumulated interest after six months. If the investors choose to convert, the number of shares will be calculated by dividing the principal plus accumulated interest by $29.31. On November 19, 2024, the Company entered into a debt-to-equity conversion agreement, under which the investor agreed to convert the $90,000 into 34,091 shares of the Company's common stock at a conversion price of $2.64 per share. However, the Company failed to complete the registration of the converted shares within 45 calendar days as required by the conversion agreements, the investors has elected to decline the conversion and has elected to reinstate the original debt liability in accordance with the original agreement and extended the maturity date to September 2025, then subsequently extended to July 11, 2026. As of March 31, 2026 and December 31, 2025, the balance of this note was $90,000 and $90,000.

During the third and fourth quarters of 2025, the Company entered into another five securities purchase agreements with Diagonal pursuant to which the Company issued the following convertible promissory notes to the Diagonal: i) principal amount of $97,350 issued on July 23, 2025 with an original issue discount of $14,850 and closing expenses of $7,500 deducted from funding amount, which bears an annual interest charge of 12% and matures on April 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. As of March 31, 2026, the principal and accrued interest of the note were paid off; ii) principal amount of $90,200 issued on July 30, 2025 with an original issue discount of $8,200 and closing expenses of $7,000 deducted from funding amount, which bears an annual interest charge of 14% and matures on May 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. For the three months ended March 31, 2026, an aggregate of $88,130 of convertible note principal and accrued interest were converted into 50,342,932 shares of common stock. As of March 31, 2026 and December 31, 2025, the balance of this note was $9,570 and $82,700, respectively; iii) principal amount of $155,610 issued on September 19, 2025 with an original issue discount of $22,610 and closing expenses of $8,000 deducted from funding amount, which bears an annual interest charge of 13% and matures on July 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. As of March 31, 2026 and December 31, 2025, the balance of this note was $143,814 and $135,041, respectively; iv) principal amount of $112,800 issued on October 1, 2025 with an original issue discount of $18,800 and closing expenses of $9,000 deducted from funding amount. The note bears an annual interest charge of 15% and maturity date of June 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. As of March 31, 2026 and December 31, 2025, the balance of this note was $44,486 and $56,701, respectively; v) principal amount of $126,360 issued on December 10, 2025 with an original issue discount of $18,360 and closing expenses of $8,000 deducted from funding amount. The note bears an annual interest charge of 13% and maturity date of September 15, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. As of March 31, 2026 and December 31, 2025, the balance of this note was $110,487 and $101,984, respectively.

During the third quarter of 2025, the Company entered into the following two convertible promissory notes with CFI Capital LLC: i) principal amount of $120,000 issued on July 10, 2025 with an original issue discount of $12,000 and closing expenses of $4,000 deducted from funding amount. The note bears 6% interest per annum and matures on July 10, 2026, and ii) principal amount of $130,000 issued on September 18, 2025 with an original issue discount of $13,000 and closing expenses of $4,000 deducted from funding amount. The note bears 6% interest per annum and matures on September 18, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of these two convertible notes. The notes can be prepaid within 6 months at 105% of principal and accrued interest. For the three months ended March 31, 2026, an aggregate of $70,307 of convertible note principal and accrued interest were converted into 10,852,666 shares of common stock. As of March 31, 2026, the aggregate balance of the two convertible promissory notes was $47,573 and $122,036. As of December 31, 2025, the aggregate balance of the two convertible promissory notes was $111,627 and $117,844.

On July 30, 2025, the Company entered into a securities purchase agreement with Labrys Fund II, L.P., pursuant to which the Company sold to Labrys Fund II, L.P. a convertible promissory note in the aggregate principal amount of $230,000 with an original issue discount of $30,000 and closing expenses of $4,250 deducted from funding amount. The note bears an annual interest charge of 14% and matures on July 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 25% of the market price. For the three months ended March 31, 2026, an aggregate of $57,779 of convertible note principal were converted into 22,706,500 shares of common stock. As of March 31, 2026 and December 31, 2025, the balance of this note was $156,847 and $187,097, respectively.

On August 5, 2025, the Company entered into a securities purchase agreement with FirstFire Global Opportunities Fund LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $172,500 with an original issue discount of $22,500 and closing expenses of $6,000 deducted from funding amount. The note bears an annual interest charge of 10% and matures on August 5, 2026. As consideration for entering into the securities purchase agreement, the Company issued a total of 200,000 shares to the investor on August 5, 2025. Principal and accrued interest can be converted into shares of common stock of the Company at a 25% discount to lowest trading price with a 10 day look back at any time on or following the issue date of the convertible note. For the three months ended March 31, 2026, an aggregate of $55,325 of convertible note principal and accrued interest were converted into 26,000,000 shares of common stock. As of March 31, 2026 and December 31, 2025, the balance of this note was $114,012 and $137,622, respectively.

On August 4, 2025, the Company entered into a securities purchase agreement with AES Capital Management LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $37,500 with an original issue discount of $3,750 and closing expenses of $3,000 deducted from funding amount. The note bears an annual interest charge of 8% and matures on August 4, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of the convertible note. For the three months ended March 31, 2026, an aggregate of $16,996 of convertible note principal and accrued interest were converted into 10,839,568 shares of common stock. As of March 31, 2026, the balance of this note was $21,170 and $33,505, respectively.

On August 4, 2025, the Company entered into a securities purchase agreement with Lambda Venture Partners LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $82,500 with an original issue discount of $7,250 and closing expenses of $3,000 deducted from funding amount. The note bears an annual interest charge of 8% and matures on August 4, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 35% discount to the average of the three lowest trading prices with a 10 day look back at any time on or following the issue date of the convertible note. For the three months ended March 31, 2026, an aggregate of $61,347 of convertible note principal and accrued interest were converted into 34,617,498 shares of common stock. As of March 31, 2026, the balance of this note was $21,325 and $76,286, respectively.

On August 15, 2025, the Company entered into a securities purchase agreement with Actus Fund LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $100,000 with closing expenses of $9,000 deducted from funding amount and a warrant to purchase up to 500,000 shares of common stock at an exercise price of $0.20 per share. The note bears an annual interest charge of 12% and matures on August 15, 2026. The warrant was exercisable from August 15, 2025 through August 15, 2030. Approximately $46,664 from the convertible note proceeds was allocated to the issuance of warrants based on relative fair value. Principal and accrued interest can be converted into shares of common stock of the Company at a 30% discount to the volume-weighted average price of a 5 day look back at any time on or following the issue date of the convertible note. For the three months ended March 31, 2026, an aggregate of $9,491 of convertible note principal and accrued interest were converted into 13,891,755 shares of common stock. As of March 31, 2026 and December 31, 2025, the balance of this note was $77,161 and $65,381, respectively.

On October 16, 2025, the Company entered into a securities purchase agreement with AES Capital Management LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $37,500 with an original issue discount of $3,750 and closing expenses of $1,500 deducted from funding amount. The note bears an annual interest charge of 8% and matures on October 16, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of the convertible note. As of March 31, 2026 and December 31, 2025, the balance of this note was $34,638 and $33,343, respectively.

On December 10, 2025, the Company entered into a securities purchase agreement with Boot Capital LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $58,500 with an original issue discount of $8,500 deducted from funding amount. The note bears an annual interest charge of 13% and matures on September 15, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 35% discount to lowest trading price with a 10 day look back at any time after the sixth monthly anniversary of the convertible note. As of March 31, 2026 and December 31, 2025, the balance of this note was $53,382 and $52,050, respectively.

On December 26, 2025, the Company entered into a securities purchase agreement with Quick Capital, LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $55,556 with an original issue discount of $5,556 and closing expenses of $4,500 deducted from funding amount, along with 360,000 shares of Common Stock to be issued as additional consideration for the purchase of the note. The shares were issued in January 2026. The note bears an annual interest charge of 12% and matures nine months from the issuance date. The principal and accrued interest are convertible into shares of the Company's common stock at a conversion price equal to a 30% discount to the lowest trading price during the 20 trading days preceding the conversion date. The funding was received in January 2026. As of March 31, 2026 and December 31, 2025, the balance of this note was $33,443 and $0, respectively.

On December 29, 2025, the Company entered into a securities purchase agreement with AES Capital Management LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $37,500 with an original issue discount of $3,750 and closing expenses of $1,500 deducted from funding amount. The note bears an annual interest charge of 8% and matures on December 29, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of the convertible note. The funding was received in January 2026. As of March 31, 2026 and December 31, 2025, the balance of this note was $33,545 and $0, respectively.

On February 23, 2026, the Company entered into another securities purchase agreement with Lambda Venture Partners, LLC, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $27,500. The Note was issued with an original issue discount of $2,500, and an additional $3,000 was withheld from the funding proceeds for legal costs of the Lambda, resulting in net cash proceeds to the Company of $22,000. The note bears interest at a rate of 10% per annum and matures on February 23, 2027. Principal and accrued interest can be converted into shares of common stock of the Company at a 39% discount to lowest trading price with a 10 day preceding the conversion date. As of March 31, 2026, the balance of this note was $22,542.

On February 23, 2026, the Company entered into another securities purchase agreement with Lambda Venture Partners, LLC, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $25,300. The Note was issued with an original issue discount of $2,300, and an additional $3,000 was withheld from the funding proceeds for legal costs of the Lambda, resulting in net cash proceeds to the Company of $20,000. The note bears interest at a rate of 10% per annum and matures on February 23, 2027. Principal and accrued interest can be converted into shares of common stock of the Company at a 39% discount to lowest trading price with a 10 day preceding the conversion date. As of March 31, 2026, the balance of this note was $20,523.

Interest expense in connection with the convertible notes for the three months ended March 31, 2026 and 2025 amounted to $278,930 and $85,257.

**Note 11 — Related party transactions**

<u>Purchases and accounts payable – related parties:</u>

On April 11, 2023, one of the Company's customers and vendors, Iluminar Lighting LLC ("Iluminar") entered into Debt Conversion Agreement with the Company pursuant to which it will convert $1,000,000 of accounts receivable to 1,033,333 shares of Iluminar which is 10% of Iluminar's outstanding shares. For the three months ended March 31, 2026 and 2025, the purchases made from Iluminar were $1,500 and $58,031, respectively. As of March 31, 2026 and December 2025, the accounts payable amount due to Iluminar was $367,937 and $366,437, respectively.

<u>Revenue - related party:</u>

During the three months ended March 31, 2026 and 2025, the sales revenue from Iluminar was $0 and $17,422, respectively.

<u>Other receivable - related party:</u>

As of March 31, 2026, other receivable – related party from Mr. Tie (James) Li, a shareholder of the Company, was $12,319, primarily related to advances made for employee reimbursements. Other receivable – related party from Big Lake, a related party entity, was $212,554, primarily related to working capital advances.

<u>Loan receivable – related party:</u>

As of March 31, 2026 and December 31, 2025, loan receivable from Big Lake amounted to $605,000 and $605,000, respectively. The receivable relates to a promissory note dated April 11, 2025, issued to Big Lake, which bears interest at 0% per annum and matures on June 30, 2026. The promissory note includes a debt-forgiveness provision whereby the outstanding principal may be forgiven if the borrower invests an amount equal to or greater than the loan proceeds into the Company. If such condition is met, the borrower will have no further repayment obligation under the note.

<u>Deferred income – contract liabilities - related party:</u>

As of March 31, 2026 and December 31, 2025, the deferred income - contract liabilities from Iluminar was $86,468 and $86,468, respectively.

<u>Other payables — related parties</u>

In 2022, Nature's Miracle Inc. (Cayman) ("NMCayman"), former stockholders of NMI, currently under common control of Mr. Tie (James) Li, the Company's CEO, paid a total amount of $345,000 of legal and audit fees for the Company. As of March 31, 2026 and December 31, 2025, the outstanding amount due to NMCayman was $158,000 and $170,000, respectively.

In 2021, Yang Wei, former shareholder of the Visiontech and current shareholder of the Company, paid a total amount of $23,813 of normal business operating fee for the Company. During the three months ended March 31, 2026, an additional $285 of operating expenses was paid by Yang Wei on behalf of the Company. As of March 31, 2026 and December 31, 2025, the outstanding amount due to Yang Wei was $24,098 and $23,813, respectively.

In 2022, Zhiyi (Jonathan) Zhang, paid a total amount of $27,944 of normal business operating fee for the Company. On May 19, 2023, September 4, 2023, and July 1, 2024, Zhiyi (Jonathan) Zhang paid another $1,000, $557, $8,184 for normal business operating expenses, respectively. Furthermore, in 2024, Mr. Zhang contributed an additional $10,936 toward Company expenses. On October 11, 2023, the Company paid off $28,501 of the balance. In 2025, the Company paid another $3,000 of the balance. During the three months ended March 31, 2026, Mr. Zhang advanced an additional $24,460 to the Company for operating expenses. As of March 31, 2026 and December 31, 2025, the outstanding amount due to Zhiyi (Jonathan) Zhang was $41,580 and $26,533.

As of March 31, 2026 and December 31, 2025, Nature's Miracle Holding Inc. has an outstanding amount due to James Li for $25,100 and $25,100 of board fees paid by Mr. Li on behalf of the Company.

As of March 31, 2026 and December 31, 2025, Nature's Miracle Holding Inc. has an outstanding amount due to Zhiyi (Jonathan) Zhang for $25,000 and $25,000 of board fees paid by Mr. Zhang on behalf of the Company.

As of March 31, 2026 and December 31, 2025, Visiontech had outstanding amounts due to Xi Liu of $5,129 and $0, respectively, related to consulting services, and to Lina Xu of $4,844 and $0, respectively, related to contractor services.

<u>Short-term loans — related parties</u>

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| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025** |
| Zhiyi Zhang <sup>(1)</sup> | $60000 | $60000 |
| Tie Li <sup>(2)</sup> | 85000 | 85000 |
| Big Lake<sup>(3)</sup> | 49000 | 49000 |
| Total short-term loans – related parties | $194000 | $194000 |

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(1) On
November 29, 2022, Visiontech signed a loan with Zhiyi (Jonathan) Zhang, one of the stockholders of the Company, for the principal
amount of $100,000 with 8% interest rate. This loan is originally required to be paid in full before May 29, 2023, the Company initially
extended it to November 15, 2023, further extended to February 15, 2024, subsequently further extended to August 15, 2024, April
15, 2025 and October 16, 2025 and finally extended to December 1, 2025. During the year ended December 31, 2023, the Company paid $40,000
to Zhiyi Zhang. The loan balance as of March 31, 2026 and December 31, 2025 was $60,000 and $60,000. As of March 31, 2026 and December
31, 2025, the accrued interest of this loan was $18,237 and $17,053, respectively. As of the submission date, this loan has not been
extended. Mr. Zhang recently resigned as President and Director and has not finalized a repayment plan with the Company.

(2) On
December 18, 2025, the Company signed one loan with Tie (James) Li for the principal amount of $70,000 with 5% interest rate. This loan
is required to be paid in full before May 16, 2026, and then extended to August 16, 2026. The loan balance as of March 31, 2026 and December
31, 2025 was $70,000 and $70,000. The accrued interest of this loan as of March 31, 2026 and December 31, 2025 was $997 and $134.

On December 30, 2025, the Company signed one loan with Tie (James) Li for the total principal amount of $15,000 with 5% interest rate. This loan is required to be paid in full before April 1, 2026, originally extended to May 16, 2026, and then extended to August 16, 2026. The loan balance as of March 31, 2026 and December 31, 2025 was $15,000 and $15,000. The accrued interest of this loan as of March 31, 2026 and December 31, 2025 was $185 and $0, respectively.

(3) On
December 22, 2025, the Company signed a loan agreement with Big Lake Capital, LLC for a total principal amount of $49,000 with a 10%
interest rate. The loan is unsecured and accrues interest from December 22, 2025. The Company is required to repay the loan in full by
June 22, 2026. All payments are applied first to accrued interest and then to principal. In the event of default, the outstanding principal
and accrued interest may be accelerated and become immediately due at the lender's option. Additionally, the loan includes a debt
forgiveness provision, whereby the loan may be forgiven in full if the Company invests an amount equal to or greater than the loan proceeds
into the Company. The loan balance as of March 31, 2026 and December 31, 2025 was $49,000 and $49,000, and the accrued interest as of
March 31, 2026 and December 31, 2025 was $1,329 and $121.

Interest expense for short-term loans - related parties amounted to $3,440 and $2,579 during the three months ended March 31, 2026 and 2025, respectively.

<u>Convertible notes — related party</u>

On April 11, 2025, the Company signed a convertible promissory note agreement with Big Lake. Big Lake is a related party controlled by Tie "James" Li, Chairman and CEO of the Company. The agreement calls for up to $2,000,000 in financing with an initial tranche of $600,000. The amount funded can be converted into shares of the Company at a conversion price equal to 110% of the end of the trading date. The rate of interest is 10% and the note matures in one year. As consideration for entering into the convertible promissory note agreement, the Company issued warrants to purchase up to 10,101,010 shares of common stock at an exercise price the same as conversion price of $0.198 - the price equal to 110% of the reported closing price of the Company's Common Stock on the closing date of the Initial Tranche, if the Company draws down the full amount of the note. As of March 31, 2026, the balance of this note was $321,161 and the balance of accrued interest was $94,904.

In connection with the acquisition of Zak Properties as stated in Note 6 – Asset acquisition under common control, the Company issued a convertible promissory note in the aggregate principal amount of $3,000,000 as consideration of the acquisition of Zak Properties. The note bears an annual interest charge of 10% with a maturity date of September 18, 2027. Principal and accrued interest can be converted into shares of common stock of the Company at a 20% discount to lowest trading prices with a 20 day look back at any time on or following the issue date of the convertible note. As of March 31, 2026 and December 31, 2025, the principal balance of this note was $3.0 million and $3.0 million, respectively, and accrued interest was $160,274 and $86,301, respectively.

Interest expense for convertible notes - related party amounted to $168,877 and $0 during the three months ended March 31, 2026 and 2025, respectively.

**Note 12 — Income taxes**

As of March 31, 2026 and December 31, 2025, the Company's deferred tax asset had a full valuation allowance recorded against it. The effective tax rate for the three months ended March 31, 2026 and 2025 were 0.0% and (0.1)%, respectively. The effective tax rate differs from the federal and state statutory tax rate of 21.0% primarily due to the valuation allowance on the deferred tax assets. The Company continues to maintain a full valuation allowance against its deferred tax assets due to historical losses and uncertainty around future taxable income.

**Note 13 — Series A, D, and F preferred shares subject to possible redemption**

On May 7, 2025, the Company entered into a Securities Purchase Agreement (the "SPA") where the Company sold to GHS Investments, LLC, a Nevada limited liability company (the "Investor") 250 shares of Series A Preferred Stock, $0.0001 par value per share (the "Series A Shares") at a purchase price of $1,000 per Series A Share for an aggregate purchase price of $250,000. The Series A Shares have a face value of $1,200 per share and are convertible into shares of Common Stock (the "Conversion Shares") at a conversion price of $0.112 in accordance with the certificate of designations to be filed with the State of Delaware. The Series A Shares carry cumulative dividends of twelve percent (12%) per annum, payable quarterly. On the earlier of the (1) 120th calendar day following the Closing and (2) the date the Common Stock is listed on a national exchange (the "<u>Corporation Redemption Payment Date</u>"), the Corporation shall have the obligation to redeem the preferred stock for an amount equal to 100% of the outstanding stated value of the preferred stock, plus any accrued but unpaid dividends, plus all other amounts due to the Holder.

On September 19, 2025, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with Y. K. Capital Management, Inc. (the "Series D Investor"), whereby the Series D Investor agreed to purchase 2,000 shares of Series D preferred stock, $0.0001 par value per share (the "Series D Shares"), at a purchase price of $1,000 per Series D Share. On the initial closing, the Series D Investor purchased five hundred (500) Series D Shares for a purchase price of $500,000. The second closing will be for the purchase of five hundred (500) Series D Shares for the aggregate purchase price of $500,000 before October 30, 2025 and the third and final closing will be for the purchase of one thousand (1,000) Series D Shares for the aggregate purchase price of $1,000,000 prior to the Company's application for uplisting to the NYSE or Nasdaq.

The Series D Shares have a stated value of $1,000 per share (the "Stated Value") and shall bear dividends at the rate of 8% per annum, for so long as the Series D Shares have not been redeemed or converted. The Series D Shares are convertible into shares of Common Stock of the Company at a conversion price of $0.1180 (the "Conversion Price") as set forth in in the Certificate of Designations, to be filed with the State of Delaware (the "Certificate of Designations"). The Series D Investor shall not convert into Common Stock any amount of Series D Shares which would render the holder having more than 4.99% of the total outstanding shares of common stock of the Company. On the earlier of the (1) 120th calendar day following the Closing and (2) the date the Common Stock is listed on a national exchange (the "<u>Corporation Redemption Payment Date</u>"), the Corporation shall have the obligation to redeem the Preferred Stock for an amount equal to 100% of the outstanding Stated Value of the Preferred Stock, plus any accrued but unpaid dividends, plus all other amounts due to the Holder.

On October 10, 2025, the Company entered into another Securities Purchase Agreement (the second SPA) with the Investor, whereby the Investor agreed to purchase 50 shares of the Company's existing Series A Shares, in consideration of the Series A Investor's consent for the Company to enter into previously disclosed transactions including: (A) creating the Series B Convertible Preferred Stock, Series C Convertible Preferred Stock and Series D Convertible Preferred Stock, (B) issuing 5,000 shares of the Series B Stock (which contain 20-1 super voting rights), 9,500 shares of the Series C Stock in a transaction pursuant to which the Company will acquire certain assets owned by James Li, the Company's Chief Executive Officer, and (C) issuing a convertible promissory note in favor of an affiliate of James Li in the aggregate principal amount of $3,000,000.

The Series A Shares have a stated value of $1,200 per share, and bear dividends at the rate of 12% per annum, for so long as the Series A Shares have not been redeemed or converted. The Series A Shares are convertible into shares of Common Stock of the Company at a conversion price of $0.112.

On October 29, 2025, the Company entered into a Securities Purchase Agreement with a third party ("Series F Investor"), whereby the Series F Investor agreed to purchase 500 shares of Series F preferred stock, $0.0001 par value per share (the "Series F Shares"), at a purchase price of $1,000 per Series F Share. On the initial closing, the Series F Investor purchased five hundred (500) Series F Shares for a purchase price of $500,000. As of March 31, 2026, the Company had received $450,000 of the purchase proceeds; however, no Series F Shares had been issued as of that date, and the amount received is presented as redeemable convertible stock on the unaudited condensed consolidated balance sheets.

The Series F Shares have a stated value of $1,000 per share, and bear dividends at the rate of 8% per annum, for so long as the Series F Shares have not been redeemed or converted. The Series F Shares are convertible into shares of Common Stock of the Company at a conversion price of $0.2813.

The Company accounts for its Series A, D, and F preferred shares in accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from Equity" (ASC 480). Series A, D, and F preferred shares subject to mandatory redemption (if any) will be classified as a liability instrument and will be measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) will be classified as temporary equity. At all other times, ordinary shares will be classified as shareholders' equity. In accordance with ASC 480-10-S99, the Company classifies the Series A, D, and F preferred shares outside of permanent equity as the shares are subject to possible redemption after 120 days of closing. The Company recorded the Series A, D, and F preferred shares as temporary equity with accrued dividend included in redemption value.

As of March 31, 2026, the Series A, D, and F preferred shares subject to possible redemption reflected in the unaudited condensed consolidated balance sheets are reconciled in the following table:

---

| | |
|:---|:---|
| Balance as of January 1, 2026 | $1458233 |
| Series A preferred shares | (67200) |
| Series D preferred shares | - |
| Series F preferred shares | 50000 |
| Cumulative dividend | 26075 |
| Balance as of March 31, 2026 | $1467108 |

---

On October 28, 2025, the Investor converted 46 Series A preferred shares into 690,000 shares of common stock at a conversion price of $0.08 per share.

On January 2, 2026, the Investor converted 50 Series A preferred shares into 1,205,788 shares of common stock at a conversion price of $0.04 per share.

On March 16, 2026, the Investor converted 6 Series A preferred shares into 10,000,000 shares of common stock at a conversion price of $0.0006 per share.

**Note 14 — Equity**

<u>Reverse recapitalization</u>

The total number of shares which the Company shall have the authority to issue is one billion and one million (1,001,000,000) shares of two classes of capital stock to be designated respectively preferred stock ("Preferred Stock") and common stock ("Common Stock"). The total number of shares of Common Stock the Company shall have authority to issue is 1,000,000,000 shares, par value $0.0001 per share. The total number of shares of Preferred Stock the Company shall have authority to issue is 1,000,000 shares, par value $0.0001 per share. The Preferred Stock authorized by this Certificate of Incorporation may be issued in series. As a result of the Merger as described in note 1, all share and per share data has been retroactively restated to reflect the current capital structure of the Company.

Shares issued in connection with the Company's Merger on March 11, 2024:

---

| | |
|:---|:---|
|  | **Common<br> Stock** |
| Lakeshore's shares outstanding prior to reverse recapitalization | 74717 |
| Shares issued to private rights | 1172 |
| Conversion of the Lakeshore's public shares and rights | 26337 |
| Shares issued to service providers | 26717 |
| Shares issued for commitment fee | 5114 |
| Bonus shares issued to in connection with Lakeshore loans \* | 2200 |
| Bonus shares issued to in connection with NMI loans \* | 3333 |
| Conversion of NMI's shares into the Company's ordinary shares | 742416 |
| Total shares outstanding | 882006 |

---

\* In connection with the Merger, the Company, Lakeshore and NMI further entered into a Letter Agreement on November 15, 2023, a total of 4,168 shares of the Company's common stock will be issued upon closing of the Merger in connection with certain transactions relating to the Merger: (i) 1,667 shares to Tie (James) Li and 1,667 shares to Zhiyi (Jonathan) Zhang (or 3,334 shares in the aggregate) in connection with their guarantees of the repayment of the Newtek Loan, which was loaned to a subsidiary of NMI with the principal amount of $3,700,000; (ii) 417 shares to Tie (James) Li and 417 shares to Deyin (Bill) Chen (or 834 shares in the aggregate) in connection with their loans to Lakeshore, each with the principal amount of $125,000 under separate but similar loan agreements); At the Close of Merger, additional shares of 533 and 833 were issued to Tie (James) Li and Prosperity Spring International Investment Management in connection with their loans to Lakeshore.

The shares were valued $300 per share, of which $1.0 million (3,334 shares awarded pertaining to loan guarantee for the Newtek loan) was expensed as finance expense in the Company consolidated statements of operations during the year ended December 31, 2024. $660,000 was expensed in Lakeshore's statements of operations and carried over as retained deficit after the Merger. The shares in connection with the loans have been issued during the close of the Merger.

\* On April 10, 2023, Lakeshore entered into a standby equity purchase agreement (as amended by amendment No. 1 to the agreement dated June 12, 2023 and amendment No. 2 to the agreement dated December 11, 2023, the "SEPA") with YA II PN, Ltd. ("Yorkville"). Pursuant to the SEPA, Lakeshore has the right, but not the obligation, to sell to Yorkville up to $60,000,000 of shares of common stock at Lakeshore's request any time during the commitment period commencing on the sixth (6th) trading day following the date of closing of the reverse recapitalization and terminating on the earliest of (i) the first day of the month following the 36-month anniversary of the effective date and (ii) the date on which Yorkville will have made payment of any advances requested pursuant to the SEPA for the shares of common stock equal to the commitment amount of $60,000,000.

The Company has paid YA Global II SPV, LLC, a subsidiary of Yorkville, a structuring fee in the amount of $25,000. In addition, no later than ten trading days following the closing of the reverse recapitalization, Lakeshore agreed to pay a commitment fee in an amount equal to $300,000 by the issuance to Yorkville of such number of shares of common stock that is equal to the commitment fee divided by the lower of (i) the average VWAP for the seven consecutive trading days immediately after the close of the reverse recapitalization and (ii) $10.00 per share. The 5,114 shares at $58.66 per share had been issued on November 22, 2024.

<u>Stock compensation</u>

In connection with the Merger, the Company adopted the Equity Incentive Plan (the "2024 Incentive Plan").

The 2024 Incentive Plan will provide for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or equity-related cash-based awards. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting or advisory services for the Company, will be eligible for grants under the 2024 Incentive Plan.

The 2024 Incentive Plan provides for the future issuance of shares of the Company's Common Stock, representing 10% of the number of shares of the Company's Common Stock outstanding following the Business Combination (after giving effect to the Redemption). The 2024 Incentive Plan also provides for an annual increase on January 1 for each of the first ten (10) calendar years during the term of the 2024 Incentive Plan by the lesser of (a) Five percent (5%) of all classes of the Company's common stock outstanding on each December 31 immediately prior to the date of increase or (b) such number of Shares determined by the Board.

Pursuant to board resolution dated August 23, 2023, the Company is to grant a one-time award of 333 shares of common stock of the company to Charles Hausman, a Director of the Company; a one-time award of 1,667 shares of the company to Tie "James" Li and a one-time award of 1,667 shares of the company to Zhiyi Zhang, both executives of the Company. The above awards are vested immediately upon consummation of the business combination with Lakeshore.

Pursuant to board resolution dated September 20, 2023, the Company approved a stock grant to Mr. Darin Carpenter, Chief Operating Officer of the Company, pursuant to which Mr. Carpenter will be issued 3,334 shares of the Company's common stock over a two-year service period upon consummation of the business combination Lakeshore.

On August 1, 2024, the Company and Darin Carpenter entered into the mutual termination of employment agreement and intent to transition to project-based work (the "Agreement"), in which it was agreed that Mr. Carpenter shall resign from his position as Chief Operating Officer of the Company effective as of July 31, 2024. Pursuant to the Agreement, the Company and Mr. Carpenter agreed that Mr. Carpenter will provide services as a consultant to the Company on a per project basis as needed. In addition, the Company agreed to fully vest 3,334 shares of common stock that was issuable to Mr. Carpenter pursuant to the Employment Agreement dated as of September 17, 2023, by and between the Company and Mr. Carpenter. The Company also agreed to pay Mr. Carpenter the equivalent of two months of salary.

Shares award to Mr. Hausman and Mr. Carpenter per Letter Agreement stated above has a fair value of $1.1 million and were expensed as compensation expenses according to vesting terms.

Pursuant to board resolution dated March 24, 2024, certain key employees were approved for stock incentives including George Yutuc (Chief Financial Officer), Kirk Collins (Director of Sales), and Amber Wang (Controller). Each can receive shares that vest over time of 3,334, 1,667 and 1,667 shares, respectively. Each of these employees have signed an employment agreement that reflects such shares and unique vesting schedules. The fair value of the shares to be issued was approximately $178,000 at $26.70 per share.

On April 2, 2024, the Company entered into an investor relations consulting agreement with MZHCI LLC ("MZHCI") pursuant to which MZHCI will provide investor relations services to the company and the agreement has a term of six months. The Company will pay $14,000 cash per month and to issue MZHCI 5,000 shares of restricted common stock, 2,500 shares will be vested immediately upon signing the agreement and 2,500 shares will vest on October 1, 2024. The fair value of the shares was approximately $143,000 at $28.50 per share. The 5,000 shares were issued on May 7, 2024.

Pursuant to board resolution dated October 25, 2024, the Company approved the issuance of 13,334 restricted shares of common stock, par value $0.0001 per share to Alta Waterford LLC for service provided related to digital advertising and social media platform. The shares shall be issued pursuant to the 2024 Incentive Plan. The fair value of the shares was approximately $58,000 at $4.37 per share. The shares were issued on November 21, 2024.

Pursuant to board resolution dated November 18, 2024, the Company approved the issuance of 75,757 restricted shares of common stock, par value $0.0001 per share to PX SPAC Capital Inc. for one- year service to be provided related to business consulting and advisory. The shares shall be issued pursuant to the 2024 Incentive Plan. The fair value of the shares granted was approximately $200,000 at $2.64 per share. Stock compensation expenses for the three months ended March 31, 2026 and 2025 amounted to $0 and $49,315, respectively.

On July 22, 2025, the Company entered into a two-month consulting agreement with Root Ventures LLC. In exchange for curation services to be provided under the agreement, the Company issued 439,833 restricted shares of common stock (valued at approximately $22,519 based on a fair value of $0.0512 per share) on July 25, 2025, as consideration for the services.

On October 29, 2025, the Company entered into a consulting agreement with Huanfu Cui (the "Consultant"), pursuant to which the Consultant agreed to provide financing advisory services, including presenting tailored financing options, reviewing deal-related documents, and coordinating with lenders to facilitate financing transactions. As compensation, the Company agreed to issue the Consultant 1,000,000 shares of restricted common stock, which vested in full upon execution of the agreement. The fair value of the shares granted was approximately $425,000 at $0.425 per share. Stock compensation expenses for the three months ended March 31, 2026 amounted to $104,795.

For the three months ended March 31, 2026 and 2025, the Company recorded stock compensation expenses of $104,795 and $84,936. Those stock compensation expenses are included in the Company's operating expenses.

<u>Common stock issued with private placement</u>

On July 19, 2024, the Company issued a total of 6,000 shares to the investor pursuant to a securities purchase agreement (See Note 10 on Convertible notes for detail). The fair value of the shares was approximately $81,000 at $13.5 per share.

<u>Public Offering</u>

On July 29, 2024, the Company closed an underwriting public offering for the sale of 166,667 units at a public offering price of $7.2 per unit, with each unit consisting of: (i) one share of common stock and (ii) one warrant to purchase one share of common stock, for aggregate net proceeds of $1.0 million after deducting underwriting discounts and other offering expenses. Pursuant to the terms of an underwriting agreement dated as of the offering date, the Company agreed to grant EF Hutton LLC, the underwriter, 25,000 warrants, representing 15% of the warrants sold as part of the units in this offering.

On November 7, 2024, the Company entered into an underwriting agreement with D. Boral Capital LLC as the underwriter, relating to a firm commitment underwritten public offering of (i) 837,788 units at a public offering price of $3.354 per Unit, with each Unit consisting of one share of common stock, par value $0.0001 per share, of the Company, one Series A warrant to purchase one share of common stock at an exercise price of $3.354 per share and one Series B warrant to purchase such number of shares of common stock as determined on the reset date, at an exercise price of $0.003 per shares, and (ii) 56,667 pre-funded units (the "Pre-Funded Units") at a public offering price of $3.351 per Pre-Funded Unit, with each Pre-Funded Unit consisting of one pre-funded warrant (the "Pre-Funded Warrants") exercisable for one share of common stock at an exercise price of $0.003 per share, one Series A Warrant and one Series B Warrant. The Pre-Funded Warrants was exercised on November 12, 2024. Net proceeds to the Company amounted to approximately $2.5 million.

On May 7, 2025, the Company entered into the equity financing agreement (or the "EPFA"), with GHS Investments, LLC, a Nevada limited liability company (the "Investor"), in connection with an equity line of credit ("ELOC") for up to $20,000,000 (the "Commitment Amount"), pursuant to the EPFA. On July 25, 2025, the Company entered into the (the "Amended EPFA") with the "investor, which amends and supersedes the previously disclosed Equity Financing Agreement ("EPFA"), dated as of May 6, 2025, by and between the Company and the Investor, in connection with an equity line of credit ("ELOC") for up to $20,000,000 (the "Commitment Amount"), for a period of 24 months from the effective date of the registration statement (the "Registration Statement") registering the shares of Common Stock relating to the EPFA (the "Term"), or July 15, 2027. During the Term, the Company has the right, but not the obligation, from time to time at its sole discretion, to direct Investor, by delivery of an irrevocable written notice ("Purchase Notice") to purchase shares of the Company's Common Stock (each a "Purchase"). The maximum dollar amount of each Purchase will not exceed two hundred percent (200%) of the average daily trading dollar volume for the Common Stock during the ten (10) consecutive trading days preceding the Purchase Notice. Prior to the Amended EPFA, no Purchase would be made in an amount equaling less than ten thousand dollars ($10,000) or greater than five hundred thousand dollars ($500,000). The parties entered into the Amended EPFA solely to increase such Purchase amount from $500,000 to $2,000,000. The Company also agrees to issue one percent (1%) of the total Commitment Amount at a fixed price equaling ninety-five (95%) of the VWAP for the trading day preceding the execution of Agreements as an equity incentive ("Commitment Shares"). The Company accounted for the Commitment Shares as finance expense to obtain the ELOC. The Company has not issued the shares as of March 31, 2026. The change in fair value of the shares to be issued on July 25, 2025 to March 31, 2026 is recorded in the Company's consolidated statements of operations and comprehensive income (loss). Fair value is determined using the quoted market price of the Company's shares which is a level 1 input.

---

| | |
|:---|:---|
| Commitment shares to be issued: |  |
| Beginning balance as of December 31, 2025 | $171160 |
| Change in fair value of commitment shares to be issued | (168048) |
| Ending balance as of March 31, 2026 | $3112 |

---

For the three months ended March 31, 2026, the Company sold 14,636,713 shares of its common stock, net proceeds to the Company amounting to $78,752.

<u>Preferred shares</u>

In connection with the acquisition of Zak Properties as stated in Note 6– Asset acquisition under common control, the purchase price for Zak Properties is $17,500,000, and paid by the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company shall issue 5,000 shares of Series B Preferred Stock (valued at $5,000,000) of the Company which (a) can be converted into Common Stock, par value $0.0001 per share, at $0.1180 per share and (b) have certain voting rights equal to twenty (20) votes per one (1) share of Series B Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company shall issue 9,500 shares of Series C Preferred Stock (valued at $9,500,000) of the Company which (a) convertible into shares of Common Stock at $0.1180 per share, and (b) same voting right as common stock.

The Company issued 5,000 Series B and 9,500 Series C shares in October 2025.

On December 9, 2025, Big Lake converted 9,500 Series C shares into 80,508,475 shares of the Company's common stock at $0.1180 per share.

<u>Shares issued through debt-to-equity conversion</u>

Refer to Note 9 — Loans payable and Note 11 — Related party transactions for detail.

On July 24, 2025, the Company entered into separate debt-to-equity conversion agreements with Tie Li, George Yutuc, and Jonathan Zhang pursuant to which each individual agreed to convert certain accrued and unpaid wages and salaries into shares of the Company's common stock at a conversion price of $0.1305 per share, or the closing market price on the date of the agreement. Specifically, Tie Li agreed to convert $673,476 of unpaid salary into 5,160,739 shares; George Yutuc agreed to convert $52,083 into 399,106 shares; and Jonathan Zhang agreed to convert accrued $406,691 into 3,111,408 shares. The share issuances pursuant to these agreements were completed on December 7, 2025.

<u>Shares issued through convertible notes conversion</u>

Refer to Note 10 — Convertible notes for detail.

<u>Warrants:</u>

*<u>Warrants issued prior to reverse recapitalization</u>*

In connection with the reverse recapitalization, the Company has assumed 120,858 warrants outstanding, which consisted of 115,000 public warrants and 5,858 private warrants. Both of the public warrants and private warrant met the criteria for equity classification.

Each whole warrant entitles the holder to purchase one ordinary share at a price of $345 per share, subject to adjustment as described below, commencing 30 days after the completion of its initial business combination, and expiring five years from after the completion of an initial business combination. No fractional warrant will be issued and only whole warrants will trade.

The Company may redeem the warrants at a price of $0.3 per warrant upon 30 days' notice, only in the event that the last sale price of the ordinary shares is at least $540 (as adjusted for share sub-divisions, share dividends, reorganizations and recapitalizations) per share for any 20 trading days within a 30-trading day period ending on the third day prior to the date on which notice of redemption is given. If the Company redeems the warrants as described above, management will have the option to require all holders that wish to exercise warrants to do so on a "cashless basis."

*<u>Warrant issued with July convertible notes</u>*

On July 17, 2024, the Company issued a total of 7,250 warrants in connection with a securities purchase agreement, granting the option to purchase up to 7,250 shares of common stock at an exercise price of $26.10 per share. The warrant is exercisable on July 17, 2024 until five years from July 17, 2024. The fair value of the warrants was approximately $4,600 at $0.60 per warrant.

The issuance of the warrants described above were deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

The total number of these warrant shares is subject to adjustments for stock splits, recapitalizations and reorganizations. If the Company issues or sells any shares of common stock or other securities for a price per share, exercise price, or conversion price, as the case may be, that is less than the current exercise price of the warrant, subject to exceptions, the exercise price of the warrant will be adjusted to match the price per share, exercise price, or conversion price, in the issuance, as applicable.

*<u>Series A Warrants issued in July Public offering</u>*

On July 29, 2024, the Company issued a total 191,667 Series A warrant, each entitling the holder to purchase one share of common stock at a public offering price of $7.2 per unit.

The Series A warrant is immediately exercisable on the date of issuance at an exercise price of $7.2 per share and expires five years from the closing date of the offering (See above Public Offering for detail).

The Series A warrants are exercisable at any time after their original issuance up to the date that is five years after their original issuance. The Series A warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full in immediately available funds for the number of shares of Common Stock subscribed for upon such exercise (except in the case of a cashless exercise as discussed below). If a registration statement registering the issuance of the shares of Common Stock underlying the Series A warrants under the Securities Act is not effective or available, the holder may, in its sole discretion, elect to exercise the Series A warrants through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Series A warrants.

The exercise price per whole share of Common Stock issuable upon exercise of Series A warrants is $7.2 per share. The exercise price and number of shares of Common Stock issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications, dilutive issuances or similar events. In addition, with respect to Series A warrants, subject to certain exemptions outlined in the Series A warrants, if we sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock, at an effective price per share less than the exercise price of the Series A warrants then in effect, the exercise price of the Series A warrants shall be reduced to equal the effective price per share in such dilutive issuance, provided, however, in no event shall the exercise price of the Series A warrants be less than $1.5.

In November 2024, a total of 46,800 Series A warrants were exercised to subscribe for common stocks for a total consideration of approximately $0.3 million.

*<u>Warrants and Pre-Funded Warrants issued in November Public offering</u>*

On November 12, 2024, the Company issued a total 894,454 Series A warrants, including 56,667 Series A warrants from Pre-Funded Unit, 894,454 Series B warrants, including 56,667 Series B warrants from Pre-Funded Unit, and 56,667 Pre-Funded warrants.

The Series A Warrants was exercisable commencing upon warrant stockholder approval ("Warrant Stockholder Approval", see define below), have an exercise price of $3.354 per share (subject to certain anti-dilution and share combination event protections) and have a term of 5 years from the date of the Warrant Stockholder Approval.

The Series B Warrants were exercisable commencing upon Warrant Stockholder Approval, will have an exercise price of $0.003 per share and will have a term of 2 years from the date of Warrant Stockholder Approval.

The purchase price of each Pre-Funded Unit is $3.351, and the exercise price of each Pre-Funded Warrant included in the Pre-Funded Unit is $0.003 per share. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. This offering also relates to the shares of common stock issuable upon exercise of any Pre-Funded Warrants and Warrants sold in this offering. (See above Public Offering for detail).

The exercise price and number of shares of common stock issuable under the Series A Warrants are subject to adjustment and the number of shares of common stock issuable under the Series B Warrants will be determined following the 10th trading day after the date of Warrant Stockholder Approval (the "Reset Date"), and to be determined pursuant to 80% of the lowest daily average trading price of the common stock during the reset period ("Reset Period"), the period commencing on the first (1<sup>st</sup>) Trading Day after the date of Stockholder Approval and ending on the tenth (10<sup>th</sup>) trading day after the date of stockholder approval, subject to a minimum price of $0.6708 per share, such that the maximum number of shares of common stock underlying the Series A Warrants would be an aggregate of approximately 4,472,272 (determined by dividing the offering amount of $3,000,000 by the minimum exercise price of $0.6708) and the maximum number of shares of common stock underlying the Series B Warrants would be an aggregate of approximately 3,577,818 (determined by subtracting the 837,788 Units and 56,667 Pre-Funded Units offered from 4,472,272).

*Warrant Stockholder Approval.* Under Nasdaq listing rules, the Warrants may not be exercised unless and until the Company obtain the approval of its stockholders. While the Company intends to promptly seek stockholder approval, there is no guarantee that the Warrant Stockholder Approval will ever be obtained. If the Company is unable to obtain the Warrant Stockholder Approval, the Warrants may not be exercised and will have substantially less value. In addition, the Company will incur substantial cost, and management will devote substantial time and attention, in attempting to obtain the Warrant Stockholder Approval.

*<u>Warrants issued with convertible note – related party</u>*

In connection with the convertible note issued to Big Lake, the Company has issued to the note holder and an investor of the holder, warrants to purchase up to 10,101,010 shares of common stock at an exercise price of $0.198 pursuant to the warrant agreement dated April 11, 2025, if the Company draws down the full amount of the note. The warrants can be exercised in whole or in part, via cash or cashless exercise, until April 11, 2027, unless extended with holder's consent. The warrants were valued at a fair value of $1,516,325 at $0.150 per share.

*<u>Warrants issued with August 2025 convertible note</u>*

In connection with the convertible note issued to Auctus Fund, LLC on August 15, 2025, the Company granted the note holder warrants to purchase 500,000 shares of common stock at an initial exercise price of $0.20 per share, adjustable under certain conditions, with an exercise period of five years. The warrants were valued at a fair value of $87,492 at $0.175 per share.

In December 2024, a total of 430,859 Series B warrants were exercised to subscribe for common stocks for a total consideration of approximately $43.

On January 13, 2025, the exercise price for the Series A warrant has been reset to $0.6708. Total number of issued shares for Series A warrants and Series B warrants had been adjusted to 4,472,270 and 3,577,817.

In January 2025, a total of 1,289,916 Series A warrants and 549,107 Series B warrants were exercised for 1,839,023 shares of common stocks for a total consideration of $865,423.

The summary of warrants activity is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants <br> Outstanding** | **Common Stock<br> Issuable** | **Weighted <br> Average <br> Exercise <br> Price** | **Average <br> Remaining <br> Contractual <br> Life <br> (in years)** |
|  | | | **US$** | |
| December 31, 2025 | 6098391 | 6098391 | $11.42 | 3.93 |
| Adjustment | - | - | - | - |
| Granted | - | - | - | - |
| Forfeited | - | - | - | - |
| Exercised | - | - | - | - |
| March 31, 2026 | 6098391 | 6098391 | $11.42 | 3.68 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants <br> Outstanding** | **Common Stock<br> Issuable** | **Weighted <br> Average <br> Exercise <br> Price** | **Average <br> Remaining <br> Contractual <br> Life <br> (in years)** |
|  | | | **US$** | |
| December 31, 2024 | 1631025 | 1631025 | $28.21 | 3.94 |
| Adjustment | 1039258 | 1039258 | 0.47 | 4.37 |
| Granted | - | - | - | - |
| Forfeited | - | - | - | - |
| Exercised | (1839023) | (1839023) | 0.47 | - |
| March 31, 2025 | 831260 | 831260 | $52.09 | 4.47 |

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**Note 15 — Concentration of risk**

<u>Credit risk</u>

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

As of March 31, 2026 and December 31, 2025, $44,660 and $90,786, respectively, were deposited with various major financial institutions in the United States. The amount in excess of the FDIC insurance was $0 as of March 31, 2026 and December 31, 2025.

Accounts receivable is typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company's assessment of its customers' creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations.

<u>Customer and vendor concentration risk</u>

During the three months ended March 31, 2026 and 2025, the major customers of the Company are as below. Iluminar is a related party of the Company since April 11, 2023, as disclosed in Note 11— Related party transactions.

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| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> March 31,<br> 2026<br> (Unaudited)** |
|  | **Percentage of <br> Revenue** | **Percentage of <br> Accounts <br> Receivable** |
| Customer C | -% | 84% |
| Pharm Fresh LLC | 46% | -% |
| Elevated Equipment Supply – MI | - | 14% |
| Hydrotek Arizona LLC | 22% | -% |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2025<br> (Audited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
|  | **Percentage of <br> Revenue** | **Percentage of <br> Accounts <br> Receivable** |
| Customer C | 32% | 28% |
| RapidGrow LED Technologies | <10% | 23% |
| SAC Projects, Inc. | <10% | 18% |
| Concentrated Services LLC | <10% | 13% |
| House of Clones, Inc | <10% | 11% |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> March 31,<br> 2025 (Unaudited)** | **As of<br> March 31,<br> 2025<br> (Unaudited)** |
|  | **Percentage of <br> Revenue** | **Percentage of <br> Accounts <br> Receivable** |
| Customer A | <10% | 33% |
| Customer C | 42% | <10% |
| Customer K | <10% | 10% |
| Customer L | 14% | <10% |
| Iluminar | <10% | 30% |

---

During the three months ended March 31, 2026 and 2025, the major vendors of the Company are as below. Iluminar is a related party of the Company. Megaphoton was not a related party prior to February 2, 2026, but became a related party following the debt settlement transaction disclosed in Note 5 and Note 17, as a result of Mr. Du becoming the President and a member of the board of directors of the Company.

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> March 31,<br> 2026<br> (Unaudited)** |
|  | **Percentage of<br> Purchases** | **Percentage of<br> Accounts<br> Payable** |
| Iluminar | 40% | 10% |
| HangZhou HanGuang Illumination | 60% | -% |
| Vendor C | -% | 36% |
| Vendor A | -% | 26% |
| Vendor B | -% | 10% |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2025 <br> (Audited)** | **As of<br> December 31,<br> 2025 <br> (Audited)** |
|  | **Percentage of<br> Purchases** | **Percentage of<br> Accounts<br> Payable** |
| Vendor A | <10% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10% |
| Vendor C | <10% | 14% |
| Vendor D | 51% | <10% |
| Iluminar | 40% | <10% |
| Megaphoton Inc. | <10% | 53% |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months<br> Ended<br> March 31,<br> 2025<br> (Unaudited)** | **As of<br> March 31,<br> 2025<br> (Unaudited)** |
|  | **Percentage of<br> Purchases** | **Percentage of<br> Accounts<br> Payable** |
| Vendor A | <10% | 12% |
| Vendor E | 42% | <10% |
| Iluminar | 33% | <10% |
| Megaphoton Inc. | <10% | 53% |

---

**Note 16 — Lease**

The Company follows ASC 842 Leases. The Company has entered into lease agreements for an office in California. $109,711 and $133,889 of operating lease right-of-use assets and $122,641 and $137,011 of operating lease liabilities were reflected on the March 31, 2026 and December 31, 2025 consolidated balance sheets, respectively.

On April 11, 2024, the Company entered into a lease agreement for an office located in California. The lease term was from May 1, 2024 to April 30, 2027. The lease payments are $8,528 per month for the period commencing May 1, 2024 and ending April 30, 2025, $8,784 per month for the period commencing May 1, 2025 and ending April 30, 2026, $9,047 per month for the period commencing May 1, 2026 and ending April 30, 2027. During the three months ended March 31, 2026, the Company paid two months' rent totaling $17,567; one month's payment of $8,784 was deferred and remains accrued.

As of March 31, 2026 and December 31, 2025, the weighted-average remaining operating lease term of its existing leases is approximately 1.08 years and 1.33 years, respectively. As of March 31, 2026 and December 31, 2025, the average discount rate of its existing leases is approximately 6.76% and 6.76%, respectively.

---

| | | |
|:---|:---|:---|
| **Lease cost** | **March 31,<br> 2026<br> (Unaudited)** | **March 31,<br> 2025<br> (Unaudited)** |
| Operating lease cost (included in Cost of Revenue and Other Expense in the Company's Statement of Operations and Comprehensive Income (Loss)) | $26358 | $121945 |
| <u>Other information</u> |  |  |
| Cash paid for amounts included in the measurement of lease liabilities | 17567 | 26487 |
| Weighted average remaining term in years | 1.08 | 1.92 |
| Average discount rate – operating leases | 6.76% | 6.98% |

---

The supplemental balance sheet information related to leases for the period is as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,<br> 2026<br> (Unaudited)** | **As of<br> December 31,<br> 2025<br> (Audited)** |
| Operating leases |  |  |
| Right of use asset | 109711 | 133889 |
| Lease Liability – current portion | 113645 | 101327 |
| Lease Liability – net of current portion | 8996 | 35684 |
| Total operating lease liabilities | $122641 | $137011 |

---

Maturities of the Company's lease liabilities are as follows:

---

| | |
|:---|:---|
| **Twelve months ended March 31,** | **Operating <br> Lease** |
| 2027 | $118103 |
| 2028 | 9047 |
| Thereafter | - |
| Less: Imputed interest/present value discount | (4509) |
| Present value of lease liabilities | $122641 |

---

**Note 17 — Commitments and Contingencies**

Except as disclosed below, the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business. While the Company does not believe any currently pending legal proceedings, other than those disclosed below, will have a material adverse effect on its business, financial condition, or results of operations, there can be no assurance that future matters will not arise or that any such matters will not at some point proceed to litigation and have a material adverse effect on the Company.

On March 1, 2024 NMI was notified of a complaint in San Bernardino Superior Court by Vien Le, its former CFO, who was employed approximately 2 months. The lawsuit claims wrongful discharge, untimely payment of wages and other related items. The Company has retained counsel and believes it will successfully defend against this lawsuit.

On October 22, 2024, Growterra, LLC ("Growterra") filed a complaint against the Company and the Company's chief executive officer in the Court of Common Pleas, Hamilton County, Ohio, alleging that it purchased lighting products from the Company, under which the Company would provide Growterra software, IP, and design documentation related to hydroponic containers and identify Growterra as an additional insured on the Company's product liability insurance. Growterra alleges the Company failed to perform these obligations. Growterra is alleging breach of contract, fraud, and misappropriation of trade secrets as well as related causes of action. On March 27, 2026 the above-mentioned Court has denied Growterra's motion for summary judgement. The Court has also denied the Company's counterclaim for breach of contract without the opportunity to conduct discovery. The trial is rescheduled for November 9 to 12, 2026.

On October 30, 2024, Visiontech filed a cross-complaint against Beverly Hills View, Inc. ("BHV") in Los Angeles Superior Court. This action responded to an initial lawsuit filed by BHV on August 29, 2024, in which BHV claimed that the lighting products received were unsuitable for its cannabis growing operation and claiming damages of $2,500,000. The case is set for trial in November 2026.

On February 2, 2026, in connection with the Settlement and Mutual Release Agreement with Megaphoton and the related employment agreement with Jinlong Du as President of the Company, the Company agreed to issue i)15 million shares of its common stock to Mr. Du, ii) $300,000 in cash and iii) use best efforts to uplist its common stock within 180 days or issue an additional 15,000,000 shares if such uplisting is not approved. Refer to Note 5 — Debt Settlement with Megaphoton for further details. For the three months ended March 31, 2026, the Company has accrued the 15 million shares for a fair value of $750,000 for shares to be issued and $300,000 payable in cash. Management and legal counsel have evaluated the agreement, including the uplisting requirement and related alternative share issuance provision, and concluded that the potential issuance of the additional 15,000,000 shares represents a reasonably possible contingency as of March 31, 2026. Accordingly, no liability has been recorded for the additional shares at this time.

On March 30, 2026 858 Upland LLC, the owner of the warehouse and offices leased by Visiontech Group Inc. (100% subsidiary of the Company), gave a notice to pay past due rent or to vacate the premises. The Company holds inventory in that warehouse and is seeking an extension of the lease or time to relocate the inventory. In turn, on March 31, 2026, the Company gave notice to 858 Upland LLC that it is accelerating the collection of its $1.57 million loan provided to Visiontech in August 2021.

As of May 22, 2026, the mortgage loan owed by Upland 858 LLC to BMO Bank, is past due. Upland 858 LLC is the landlord to Visiontech Group LLC. On April 5, 2026 BMO Bank closed the bank account associated with Upland 858 LLC. The Law Offices of Richard G. Witkin APC, on behalf of the Lender and Beneficiaries, have sent a notice of default letter to the principals of Upland 858 LLC.

Originally filed March 11, 2026 and served afterwards, Bloc Dispensary LLC, a customer of Visiontech Group Inc., filed in the Superior Court of California, County of San Bernardino, a complaint relating to its prior order of LED lights. The complaint alleges breach of express warranty and breach of implied warranty of merchantability and includes a request for a jury trial. The Company has retained counsel to defend against the complaint.

On April 30, 2026, 1800 Diagonal Lending LLC ("1800 Diagonal") filed an action against the Company in the U.S. District Court for the Eastern District of Virginia alleging defaults under certain convertible promissory notes. On May 8, 2026, the Court granted a temporary restraining order requiring the Company to restore and maintain required share reserves and restricting the issuance or transfer of shares pending compliance with the reserve requirements. On May 19, 2026, the Company and 1800 Diagonal entered into a Settlement Agreement resolving the litigation, pursuant to which the parties agreed to settle approximately $791,323 of claimed indebtedness for $575,000 through a combination of cash payments and note conversions. In connection with the settlement, the Company agreed to maintain share reserves for the exclusive benefit of 1800 Diagonal, including placing 222,000,000 shares in reserve with the transfer agent upon execution of the agreement, and to increase authorized shares as necessary to satisfy future conversion and reserve requirements by July 31, 2026. The Settlement Agreement permits 1800 Diagonal to continue exercising conversion rights under the applicable notes, and upon full satisfaction of the settlement amount, the notes will be cancelled and related share reserves released to the Company. Refer to Note 10 Convertible Notes and Note 14 Equity for additional information.

<u>Nasdaq Stock Market Delisting, Move to OTCQB and OTCID</u>

After receiving various notification letters from Nasdaq for non-compliance on certain continued listing requirements since April 2024, the Company was delisted by Nasdaq on January 15, 2025. The Company commenced trading immediately on OTC Markets Group as an OTCQB stock. OTCQB stocks are required to maintain a minimum trade price of $0.01. The Company was issued a warning of trading below such threshold on March 17, 2026. On April 24, 2026 OTC markets notified the Company on non-compliance and moved its status to OTCID. If the Company can achieve a bid price of $0.05 for 30 consecutive days, it can be reinstated back to OTCQB.

**Note 18 — Segment Information**

The Company conducts business as a single operating segment for indoor agriculture technology that provides products to indoor growers which is based upon the Company's organizational and management structure, as well as information used by the Chief Executive Officer ("CODM") to allocate resources and other factors. The accounting policies of the segment are the same as those described in Note 3.

The key measure of segment profitability that the CODM uses to allocate resources and assess performance is segment profit or loss, as reported on the statements of operations and comprehensive income (loss). The following table presents the significant revenue and expense categories of the Company's single operating segment:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> March 31,** | **Three Months Ended<br> March 31,** |
|  | **2026<br> (Unaudited)** | **2025<br> (Unaudited)** |
| Revenues | $41605 | $1106819 |
| Less: |  |  |
| Cost of revenues | 38685 | 931519 |
| Operating expenses: |  |  |
| Salary and benefits expenses | 286079 | 385803 |
| Professional fees | 393456 | 535122 |
| Stock-based compensation | 104795 | 82537 |
| Other selling, general and administrative | 305472 | 309649 |
| Provision for credit losses | 982 | 23283 |
| Other income (expense): |  |  |
| Interest expense, net | (780714) | (897017) |
| Gain on loan extinguishment | - | 40000 |
| Gain on debt settlement | 5070520 | - |
| Income taxes | - | (1700) |
| Change in fair value of commitment shares to be issued | 168048 |  |
| Other segment expense | (524716) | - |
| Net Income (loss) | $2845274 | $(2019811) |

---

**Note 19 — Subsequent events**

The Company evaluated subsequent events through the date the financial statements were available to be issued and identified the following subsequent events for disclosure.

Originally filed March 11, 2026 and served afterwards, Bloc Dispensary LLC, a customer of Visiontech Group Inc., filed in the Superior Court of California, County of San Bernardino, a complaint on relating to its prior order of LED lights. The complaint alleges breach of express warranty and breach of implied warranty of merchantability and includes a request for a jury trial. The Company has retained counsel to defend against the complaint.

On April 24, 2026, The OTC Markets Group notified the Company that it is being moved from OTCQB to OTCID on market open starting April 27, 2026. If the bid price for the Company stock can meet or exceed $0.05 for 30 consecutive days, the Company can be reinstated back to OTCQB.

On April 30, 2026, 1800 Diagonal Lending LLC ("1800 Diagonal") filed an action against the Company in the U.S. District Court for the Eastern District of Virginia alleging defaults under certain convertible promissory notes. On May 8, 2026, the Court granted a temporary restraining order requiring the Company to restore and maintain required share reserves and restricting the issuance or transfer of shares pending compliance with the reserve requirements. On May 19, 2026, the Company and 1800 Diagonal entered into a Settlement Agreement resolving the litigation, pursuant to which the parties agreed to settle approximately $791,323 of claimed indebtedness for $575,000 through a combination of cash payments and note conversions. In connection with the settlement, the Company agreed to maintain share reserves for the exclusive benefit of 1800 Diagonal, including placing 222,000,000 shares in reserve which was recorded by the transfer agent on May 18, 2026, and to increase authorized shares as necessary to satisfy future conversion and reserve requirements by July 31, 2026. Another term requires the Company to pay $50,000 within five business days after the execution of the Settlement Agreement. The Settlement Agreement permits 1800 Diagonal to continue exercising conversion rights under the applicable notes, and upon full satisfaction of the settlement amount, the notes will be cancelled and related share reserves released to the Company.

As of May 27, 2026, the mortgage loan owed by Upland 858 LLC to BMO Bank, is past due. Upland 858 LLC is the landlord to Visiontech Group LLC. On April 5, 2026 BMO Bank closed the bank account associated with Upland 858 LLC. The Law Offices of Richard G. Witkin APC, on behalf of the Lender and Beneficiaries, have sent a notice of default letter to the principals of Upland 858 LLC.

The Company has restated its condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025, to appropriately include the recording of certain short-term loan and related party receivable. The original financial statements were included in the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2025, and the restated financial statements were filed in the Company's Amendment No.1 on Form 10-Q/A filed with the SEC on April 14, 2026.

On May 26, 2026, George Yutuc resigned as the CFO of the company, effective May 27, 2026. Tie (James) Li subsequently has been appointed as the interim CFO of the company, effective immediately.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following Management's Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere herein. The Management's Discussion and Analysis ("MD&A") contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect," and the like, and/or future-tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this form. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors.*

 

*Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. Unless otherwise indicated or the context otherwise requires, references in this section to "we," "us," "our," and other similar terms refer to Nature's Miracle Holding Inc. and its consolidated subsidiaries and VIE.*

 ****

***Overview***

We are a growing agriculture technology company providing products to indoor growers in a CEA (Controlled Environment Agriculture) setting in North America. Our main products are commercial grade LED lights and related equipment designed for indoor growers. For over 10 years, the Company has utilized manufacturing relationships in China to provide quality and cost-efficient products in this space. In the 4<sup>th</sup> quarter 2024, we renamed a subsidiary to Hydroman Electric Inc. for the purpose of entering electric vehicle ("EV") market as we aim to distribute EV medium sized trucks to customers in Latin America and also develop indoor growing systems within these EV trucks. In 2024, the Company also started investments in Future Tech Inc., a Bitcoin mining and data center business.

We focus on the greenhouse and cultivation industry and aim at providing integrated greenhouse solutions, including grow lights, dehumidifiers, coco and grow media for vertical farming and multiple growing system. These systems enable year-round cultivation of crops, avoids harsh environments with very cold or hot climate. Many states focused on farming are limited to grow crops are certain months such as Spring to Fall only, and or are too far from production states too have fresh produce year-round. There are cost advantages also as vertical farming systems produces a much higher yield per acre of land. In most cases, water consumption is much lower, up to 90%. Many indoor growers can locate closer to large population centers which can significantly reduce cost of trucking, and lead time whilst reducing carbon emissions as well.

The Company acquired a commercial office building in Toledo, Ohio in September 2025. The building is the highest office tower in Toledo and is rented to a local court, major law firms and other tenants. We started recognizing office rental income and related espenses starting in the fourth quarter of 2025.

We operate mainly through three subsidiaries in California, Visiontech, Hydroman and Zak Properties LLC. Visiontech is known for the brand "eFinity" and provides high-efficiency and high-quality grow lights, grow media, fixtures and other related equipment; Hydroman supplies commercial greenhouse developers and owners with professional lighting technology and equipment. On November 11, 2024, Hydroman, Inc. changed its name to Hydroman Electric Corporation and will focus on business of electric vehicles distribution. Zak Proprties LLC owns the building in Toledo Ohio.

In its first expansion plan, the Company has added additional products to our offering. These include organic and non-organic fertilizers, organic plant growth additives, and dehumidifiers. We have diverse suppliers including from countries such as India, Holland and Turkey. Additional equipment is being considered as well. These are value add components that will help growers increase yield, but more importantly reduce failures and dramatically improve growing environments such. The new products are a natural complement to its our base of LED grow lights.

The Company also seeks to enter the joint ventures in other industry verticals to utilize excess space available for vertical farming.

 ****

 ****

***Trends and Expectations***

The following factors have been important to our business, and we expect them to impact our results of operations and financial condition in future periods:

 

*Product and Brand Development*

We plan to increase investments in product and brand development. We actively evaluate and pursue acquisitions of product brand names and improvements on existing products. We continue to work with our suppliers in improving lighting products to be both of the highest quality and simultaneously cost effective for the customer. The Company invests in trips abroad to source and partner with manufacturing companies. We expect to develop additional manufacturing relationships and suppliers in Europe in the near future.

The Company is also developing proprietary "all in one" automated and robotic indoor growing systems that are under design and testing phases.

The Company utilizes its vast network in the industry and recent publicity in listing on Nasdaq in acquiring leads for potential partnerships in sourcing, research and development of new product and business acquisitions. 

 

*Regulatory Environment*

The importation of LED lighting and distribution of such equipment in the United States and Canada does not require strict government disclosures and technical inspections. The Company obtains local business permits to store in our main warehouses, obtain licenses to resell, and follows guidelines on packaging. Certain utility companies in the U.S. have programs that award rebates to heavy usage customers, some of which are in the indoor farming business. These customers are required to install LED lights with a minimum 50,000 hours life. There is also a performance requirement set by DesignLights Consortium, a non-profit energy improvement agency.

 

*Sourcing*

The Company has long-term relationships with suppliers in Asia. Our top three suppliers of LED equipment are American Agricultural Innovation Technology Inc., Solislike-Tech Co., Ltd., Dongguan ZSC Lighting Co., Ltd. Each supplier provides us net 30 to net 90-day terms. The Company has also been approached by established lighting companies based in Japan and Germany. On grow feed, fertilizers and nutrients, our potential suppliers are based in Europe and some in Asia. Our grow container product was jointly developed and manufactured by a company based in Shenzhen, China.

On April 24, 2023, we entered into a strategic cooperation agreement with Sinoinnovo Technology (Guangdong) Co., Ltd. ("Sinoinnovo"), a company incorporated under the laws of China, pursuant to which Nature's Miracle will source from Sinoinnovo its grow light systems for distribution in the U.S. and Europe. Both companies will also cooperate jointly to set up advanced manufacturing capabilities in China and the U.S.

On October 28, 2025 we entered into a licensing agreement with Datavault AI (Nasdaq: DVLT), a leader in patented data tokenization and monetization. This agreement calls for Nature's Miracle to license Datavault AI's Carbon Credit Tokenization System.

 

*Asset acquisition of Zak Properties, LLC*

On September 18, 2025, the Company entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Big Lake Capital LLC ("Big Lake"), pursuant to which, the Company agreed to purchase from Big Lake all of the membership interests of Zak Properties, LLC, an Ohio limited liability company ("Zak Properties"), which in turn owns certain real property located in the State of Ohio, commonly known as 405 Madison Ave. with equity and debt financing. The Company's Chief Executive Officer and Chairman, Tie (James) Li, is the sole member of Zak Properties prior to the sale. As such we recorded the acquisition of the property at cost. Nature's Miracle issued 5,000 Series B and 9,500 Series C Preferred Shares to Big Lake, assumed 2.6 million in loans and also signed a new note of $3 million.

We acquired Zak Properties in order to strengthen our balance sheet, generate rental income to provide us a steadier stream of cashflow, and to have the ability to obtain real estate loans to augment our capital needs.

**RESULTS OF OPERATIONS**

 ****

***For the Three Months ended March 31, 2026 and 2025***

The following table presents certain combined statement of operations information and presentation of that data as a percentage of change from year to year.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | | |
|  | **2026** | **2025** |<br>**Change** | **Percentage**<br>**Change** |
| Revenues | 41605 | 1106819 | (1065214) | (96.2)% |
| Cost of revenues | 38685 | 931519 | (892834) | (95.8)% |
| Gross profit | 2920 | 175300 | (172380) | (98.3)% |
| Selling, general and administrative expenses | 1089802 | 1313111 | (223309) | (17.0)% |
| Provision for credit losses | 982 | 23283 | (22301) | (95.8)% |
| Loss from operation | (1087864) | (1161094) | 73230 | 6.3% |
| Total other income (expense), net | 3933138 | (857017) | 4790155 | (558.9)% |
| Income (loss) before income taxes | 2845274 | (2018111) | 4863385 | (241.0)% |
| Total provision for income taxes | - | 1700 | (1700) | (100.0)% |
| Net income (loss) | 2845274 | (2019811) | 4865085 | (240.9)% |
| Gross profit % of revenues | 7.0% | 15.8% |  |  |
| Net income (loss) % of revenues | 6838.6% | (182.5)% |  |  |
| Basic earnings (loss) per share | 0.02 | (0.43) |  |  |
| Diluted earnings (loss) per share | 0.01 | (0.43) |  |  |

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***Revenue***

Revenue for the three months ended March 31, 2026 decreased by 96.2% to $41,605 as compared to $1,106,819, for the three months ended March 31, 2025. Revenue declined due to cash constraints that restricted inventory purchases; as we were mainly selling our inventory on hand. The Company is seeking additional financing in second quarter to replenish inventory, and management expects the revenue situation to improve once inventory levels are restored.

For the three months ended March 31, 2026 and 2025, we had 6 and 47 customers, respectively. Average revenue per customer for the three months ended March 31, 2026 and 2025 were $6,934 and $23,549, respectively. Our revenue from top 5 customers for the three months ended March 31, 2026 was $41,330 compared to $831,086 for the three months ended March 31, 2025, representing a decrease of 95.0%. The lower average sale and decreased revenue from top 5 customer are reflective the impact of limited inventory availability.

***Costs of Revenue***

Costs of revenue for the three months ended March 31, 2026 decreased 95.8% to $38,685 as compared to $931,519 for the three months ended March 31, 2025. Cost of revenue decreased primarily due to the decrease in revenue, which was in turn primarily driven by lower sales volume of our products due to limited inventory availability.

 ****

***Gross Profit***

Gross profit was $2,920 for the three months ended March 31, 2026, compared to $175,300 for the three months ended March 31, 2025. Gross margin decreased to 7.0% for the three months ended March 31, 2026 from 15.8% for the three months ended March 31, 2025. The decrease in gross profit was primarily attributable to the significant decline in revenue during the period. The decrease in gross margin was primarily due to limited working capital, which restricted the Company's ability to purchase higher-margin products.

***Operating expenses***

Operating expenses for the three months ended March 31, 2026 decreased 18.4% to $1,090,784 as compared to $1,336,394 for the three months ended March 31, 2025. The decrease was mainly due to following reasons:

 

*Selling, General and Administrative Expenses*

Selling, general and administrative expenses for the three months ended March 31, 2026 decreased 17.0% to $1,089,802 as compared to $1,313,111 for the three months ended March 31, 2025. The decrease was mainly due to decrease in professional fees of $148,018, mainly related to lower spending on public relations and SEC filing activities; and a decrease in payroll expenses of $146,760 resulting from a reduced headcount, which offset by increase in depreciation expenses of $106,180, resulting from increased building improvement from acquisition of Zak Properties.

*Provision for credit losses*

Provision for credit losses for the three months ended March 31, 2026 decreased 95.8% to $982 as compared to $23,283 for the three months ended March 31, 2025. The decrease was primarily due to the full allowance of long-aged accounts receivable previously deemed uncollectible, resulting in lower incremental credit loss provisions during the current period.

***Other Income (Expense)***

Other income (Expense) primarily consist of net interest expense, gain on loan extinguishment, gain on debt settlement and change in fair value of commitment shares to be issued. Other Income for the three months ended March 31, 2026 was $3,933,138 as compared to other expense of $857,017 for the three months ended March 31, 2025, representing an increase of $4,790,155, or 558.9%. The increase was mainly due to the increase in gain on debt settlement of $5,070,520; the increase in change in fair value of commitment shares to be issued of $168,048, offset by the increase in other expense of $524,716, the decrease in gain on loan extinguishment of $40,000.

Interest expense for the three months ended March 31, 2026 and 2025 were $780,714 and $897,017, respectively; decreased due to multiple high interest loans got terminated in 2025. As of March 31, 2026 and 2025, the short-term loan balances were approximately $4.8 million and $2.6 million, respectively. As of March 31, 2026 and 2025, the high-rate factoring loans balances were approximately $0.8 million and $1.1 million, respectively. The decrease in higher-rate factoring loans in the current period and the decrease in overall loan balances contributed to the decrease in interest expense.

Gain on loan extinguishment for the three months ended of March 31, 2026 and 2025 were $0 and $40,000, respectively. The decrease was due to the extinguishment of a short-term loan, which was paid off with a new loan, and the cancellation of a convertible note in 2025.

Gain on debt settlement for the three months ended of March 31, 2026 and 2025 were $5,070,520 and $0, respectively. The increase was due to a gain recognized in connection with the settlement of litigation with Megaphoton, Inc., whereby the Company issued equity, made cash payments, and entered into related arrangements to resolve outstanding obligations.

Change in fair value of commitment shares to be issued for the three months ended of March 31, 2026 and 2025 were $168,048 and $0, respectively

Other expenses for the three months ended March 31, 2026 and 2025 were $524,716 and $0, respectively, primarily consisting of rental expense from Zak Properties.

***Income Tax Expense***

Our income tax expense was amounted to $0 and $1,700 for the three months ended March 31, 2026 and 2025, respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 were 0.0% and (0.1)%. The effective tax rate differs from the federal and state statutory tax rate of 21.0% primarily due to the valuation allowance on the deferred tax assets from our operating losses.

***Basic and Diluted Earnings (Loss) Per Share***

 ****

Basic earnings per share for the three months ended March 31, 2026 was $0.02, compared to basic loss per share of $(0.43) for the three months ended March 31, 2025. Diluted earnings per share for the three months ended March 31, 2026 was $0.01, compared to diluted loss per share of $(0.43) for the three months ended March 31, 2025. The improvement in both basic and diluted earnings per share was primarily attributable to net income recognized during the three months ended March 31, 2026, which was mainly driven by the non-recurring gain on debt settlement. The difference between basic and diluted earnings per share for the three months ended March 31, 2026 was primarily due to the inclusion of potentially dilutive securities, including convertible notes and preferred shares, which increased the diluted weighted average number of common shares outstanding.

***Net Income (Loss)***

Net Income for the three months ended March 31, 2026 was $2,845,274 as compared to net loss of $2,019,811 for the three months ended March 31, 2025, representing an increase of $4,865,085. The increase was primarily due to a gain on debt settlement.

**LIQUIDITY AND CAPITAL RESOURCES**

***Sources of Liquidity***

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our liquidity needs are to meet working capital requirements and operating expense obligations. To date, we financed our operations primarily through debt financing from financial institution and related parties. As of March 31, 2026, we had $45,695 in cash which primarily consists of bank deposits, which are unrestricted as to withdrawal and use. Our working capital deficit was $17,685,917 as of March 31, 2026.

We have experienced recurring losses from operations and negative cash flows from operating activities since 2022. Although the Company reported net income of $2,845,274 for the three months ended March 31, 2026, primarily due to a gain on debt settlement of $5,070,520, the Company continues to incur operating losses and negative cash flows from operating activities. These conditions raise substantial doubt about the our ability to continue as a going concern. Our actual revenue for the three months ended March 31, 2026 and 2025 was approximately $42,000 and $1.1 million, respectively. Such volume and relatively low gross profit margins are not enough to support high administrative costs relating to our going public and expenses as a public company. We have raised equity capital twice in 2024 but utilized most proceeds towards repayment of debt incurred in the going-public merger, higher corporate costs and paying interest and principal on short-term loans. Due to the negative cash flow, our financial position is under pressure, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund our expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. If we are unable to realize our assets within the normal operating cycle of a twelve (12) month period, we may have to consider supplementing our available sources of funds through the following sources:

● financial support from our related parties and shareholders;

● other available sources of financing from banks and other financial institutions;

● equity financing through capital market

We have a $20 million equity financing program ("ELOC") with GHS Investments, LLC and this was declared effective by SEC. The Company can draw on this facility for its working capital needs and others. The Company received $78,752 and nil for the three months ended March 31, 2026 and 2025 under this facility, with approximately $19.7 million of credit still available.

We have access to investors who are providing convertible note financing for public companies and we have been utilizing the convertible note for part of our financing needs.

Our shareholder also offers support for the Company. Big Lake Capital, LLC, a related party controlled by Tie Li (our Chairman and CEO) entered into a $2 million Convertible Promissory Note on April 11, 2025 with the initial tranche of $600,000. We have borrowed $170,000 and nil for the three months ended March 31, 2026 and 2025 under this note, with $1,016,400 of credit still available.

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on us and would materially adversely affect our ability to continue as a going concern.

The unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

Cash Flows

The following tables set forth our selected unaudited condensed consolidated cash flow data for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **For the Three Months Ended <br> March 31,** | **For the Three Months Ended <br> March 31,** |
|  | **2026** | **2025** |
|  | **US$** | **US$** |
| Net cash used in operating activities | (1605615) | (594171) |
| Net cash used in investing activities | (1000000) | (300000) |
| Net cash provided by financing activities | 2553574 | 491297 |
| Effect of exchange rate changes | 42 | 395 |
| Net change in cash | (51999) | (402479) |
| Cash and cash equivalents, at the beginning of period | 97694 | 420131 |
| Cash and cash equivalents, at the end of period | 45695 | 17652 |

---

*Operating Activities*

Net cash used in operating activities was approximately $1.6 million for the three months ended March 31, 2026. The Company reported net income of approximately $2.8 million for the period; however, this included a non-cash gain on debt settlement of approximately $5.1 million related to the Megaphoton debt settlement, which was deducted in the reconciliation of net income to net cash used in operating activities. Cash outflows from operating activities were primarily driven by an increase in other receivables—related parties of approximately $0.2 million, partially offset by non-cash adjustments totaling approximately $0.6 million, including depreciation expense, provision for credit losses, amortization of debt issuance costs, stock-based compensation expense, and amortization of operating right-of-use assets, as well as an increase in other payables and accrued liabilities of approximately $0.6 million primarily related to accrued professional fees and accrued interest on long-term loans and convertible notes.

Net cash used in operating activities was approximately $0.6 million for the three months ended March 31, 2025, which was mainly due to our net loss of approximately $2.0 million with non-cash items, including depreciation expense, provision for credit losses, amortization of debt issuance cost, stock compensation expense, and amortization of operating right-of-use asset of approximately $0.3 million. Our cash outflow is mainly due to decrease in accounts payable of approximately $0.9 million due to decrease in our purchase from vendor. Our cash outflow is offset by cash inflow of approximately $0.9 million of inventory due to sold more on hand inventory, increase from other payable and accrued liabilities of approximately $1.0 million accrued professional fees and accrued interest on short term loans, long term loans and convertible notes. Additionally, approximately $0.3 million decreased in accounts receivable as our sales decreased.

*Investing Activities*

For the three months ended March 31, 2026, net cash used in investing activities amount to $1,000,000 which was primarily for increased building improvement of $1,000,000.

For the three months ended March 31, 2025, net cash used in investing activities amount to $300,000 which was primarily for deposit from investment of Future Tech.

*Financing Activities*

Net cash provided by financing activities was approximately $2.6 million for the three months ended March 31, 2026. The increase in net cash provided was primarily a result of increase long-term loan borrowing of approximately $5.0 million, proceeds from capital contribution in advance of approximately $0.05 million, proceeds from shares issued under equity line of credit of approximately $0.08 million, net proceeds from convertible notes borrowing of approximately $0.2 million offset by repayments on short-term loan from third parties of approximately $2.8 million.

Net cash provided by financing activities was approximately $0.5 million for the three months ended March 31, 2025. The increase in net cash provided was primarily a result of net proceeds from exercise of warrants of approximately $0.9 million, net proceeds from short-term loan from third parties of approximately $0.4 million, net proceeds from convertible notes borrowing of approximately $0.1 million offset by repayments on short-term loan from third parties of approximately $0.5 million, repayments on convertible notes of approximately $0.3 million, repayments on short-term loan from related parties of approximately $0.2 million.

*Non-cash transactions*

Non-cash transactions primarily consisted of conversion of convertible notes into shares of $388,071 and debt settlement of third party's debt of $6,120,520.

**OFF-BALANCE SHEET ARRANGEMENTS**

We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

**CRITICAL ACCOUNTING POLICIES AND ESTIMATES**

We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP and pursuant to the rules and regulations of the Securities Exchange Commission ("SEC"). The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition and results of operations will be affected. We base our estimates on experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies, which we discuss further below. While our significant accounting policies are more fully described in Note 3 to our unaudited condensed consolidated financial statements, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements.

<u>Revenue recognition</u>

We follow Accounting Standards Codification ("ASC") 606 Revenue Recognition and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.

We are a growing agriculture technology company providing CEA hardware products to growers in the controlled environment agriculture industry setting in North America. Majority of our products were grow lights and related products for the indoor growing settings. Starting from first quarter of 2024, we also provide indoor grow containers to our customers.

Our contracts with customers where the amounts charged per product is fixed and determinable, the specific terms of the contracts were agreed on by us including payment terms which are typically 30 to 60 days for existing customers and prepaid for most new customers. In certain contracts involving sales to customers that entered into rebate programs who can get rebates with utility companies with utility companies for using LED lighting, payment term ranges from 60 to 120 days.

Our performance obligation is to deliver the products to customers. For indoor grow container products, we also involved in customization of the products to suit customer's specific needs. The provision of customization and configuration to meet certain technical specification per US market and delivery of product is considered one performance obligation as the services provided are not distinct within the context of the contract whereas the customers can only obtain benefit when the services and products are provided together. At times, we may charge customers shipping and handling for delivery of products, control of goods does not transfer to the customer before shipment, therefore shipping is not a promised service to us and is not considered a separate performance obligation. Any fee charged for shipping would be included in the transaction price for the good.

Transaction prices are mostly fixed. In some contracts, when determining the transaction price, we adjust consideration for the effects of the time value of money if the timing of payments provides us with a significant benefit of financing. We does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customers and the transfer of the promised goods or services to the licensees will be one year or less. For customers that entered into rebate programs with utility companies, transaction price may depend on level of energy saving the products achieved. We estimated the amount of consideration using either the expected value of the most likely amount depending on which method we expects to better predict the amount of consideration to which it will receive with a constraint applied such that a significant reversal of revenue is not probable.

We transfer the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized at a point in time when control of product transfer to customer and we have no further obligation to provide services related to such product evidenced by customer signing acceptances upon receipt of goods. Return allowances, which reduce product revenue by our best estimate of expected product returns, are estimated using historical experience.

We evaluate the criteria of ASC 606 — Revenue Recognition Principal-Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs, or the net amount earned as commissions. We ship the products according to shipping terms on the purchase order or sales order. Once delivery is complete, we then send an invoice to the customer according to the quantity and price of shipment.

We evaluate the indicators of control in accordance with ASU 2016-08: 1) We are the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer inquiries directly and handling of product returns or refunds directly if any. For grow light products, we have our own brand for marketing. For indoor grow containers products, we are also involved in the design and technical specification of the products to meet requirement in the US market. 2) We assume inventory risk either through storing the products in our own warehouses; or for drop shipments directly from vendors, we take the title from vendors through inspection and acceptance and are responsible for product damage during shipment period prior to acceptance of our customers and are also responsible for product return if the customer is not satisfied with the products. 3) We determine the resale price of the products. 4) We are the party that direct the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer, after evaluating the above scenario, we consider ourselves the principal of these arrangements and records revenue on a gross basis.

Payments received prior to the delivery of goods to customers or picked up by the customers are recorded as contract liabilities.

We periodically provide incentive offers to our customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers.

Current discount offers, when accepted by our customers, are treated as a reduction to the transaction price of the related transaction.

Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are recorded upon recognizing the related sales.

<u>Accounts receivable, net</u>

Starting from January 1, 2023, the Company adopted ASU No.2016-13 "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASC Topic 326"). The Company used a modified retrospective approach, and the adoption does not have an impact on our unaudited condensed consolidated financial statements. During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. An allowance for expected credit loss is recorded in the period in which loss is determined to be probable based on lifetime expected losses considering historical, current, and forecasted conditions. Amounts deem uncollectible are written off against the allowance after all collection efforts have ceased.

<u>Inventory</u>

Inventory consists of finished goods ready for sale and is stated at the lower of cost and net realizable value. We value our inventory using the weighted average costing method. We include a part of cost of goods sold any freight incurred to ship the product from our vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered period costs and reflected in cost of revenue. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.

If the estimated realizable value of the inventory is less than cost, we make provisions in order to reduce our carrying value to our estimated market value. We also review inventory for slow moving and obsolescence and records allowance for obsolescence.

Long-lived assets impairment

The Company reviews the impairment of its long-lived assets on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include but are not limited to, a significant deterioration of operating results, a change in the regulatory environment, changes in business plans, or adverse changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates the recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to result from the use and eventual disposition of the assets. If the assets are determined to be impaired, the impairment recognized is the excess of the carrying amount over the fair value of the assets. Fair value is generally determined by the discounted cash flow method. The discount rate used in any estimate of discounted cash flows is the rate commensurate with a similar investment of similar risk. As of March 31, 2026 and 2025, we determined there was no impairment as we estimated disposal value of our assets (mainly two buildings) exceed carrying value.

<u>Recently issued accounting pronouncements</u>

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 ("ASU 2024-03"), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures.

Except as mentioned above, we do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

**ITEM 4. CONTROLS AND PROCEDURES.**

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's ("SEC") rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

***Evaluation of Disclosure Controls and Procedures***

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of March 31, 2026, due solely to the material weakness in our internal control over financial reporting related to (i) a lack of effective risk assessment process; (ii) a lack of effective overall control environment; (iii) a lack of controls over monitoring; (iv) a lack of human resources within finance and accounting functions leading to lack of segregation of duties; (v) a lack of information technology control design and operating effectiveness; (vi) a lack of controls or ineffectively designed controls impacting financial reporting; (vii) an inadequate control over proper revenue recognition and purchase cutoff; and (viii) a lack of controls over income tax. We plan to continue to take remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. generally accepted accounting principles ("GAAP") and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (iv) appointing independent directors, and strengthening corporate governance.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

***Changes in Internal Control Over Financial Reporting***

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II. OTHER INFORMATION**

**ITEM 1.**

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities.

On March 1, 2024 NMI was notified of a complaint in San Bernardino Superior Court by Vien Le, its former CFO, who was employed approximately 2 months. The lawsuit claims wrongful discharge, untimely payment of wages and other related items. The Company has retained counsel and believes it will successfully defend against this lawsuit.

On October 22, 2024, Growterra, LLC ("Growterra") filed a complaint against the Company and the Company's chief executive officer in the Court of Common Pleas, Hamilton County, Ohio, alleging that it purchased lighting products from the Company, under which the Company would provide Growterra software, IP, and design documentation related to hydroponic containers and identify Growterra as an additional insured on the Company's product liability insurance. Growterra alleges the Company failed to perform these obligations. Growterra is alleging breach of contract, fraud, and misappropriation of trade secrets as well as related causes of action. On March 27, 2026 the above-mentioned Court has denied Growterra's motion for summary judgement. The Court has also denied the Company's counterclaim for breach of contract without the opportunity to conduct discovery. The trial is rescheduled for November 9 to 12, 2026.

On October 30, 2024, Visiontech filed a cross-complaint against Beverly Hills View, Inc. ("BHV") in Los Angeles Superior Court. This action responded to an initial lawsuit filed by BHV on August 29, 2024, in which BHV claimed that the lighting products received were unsuitable for its cannabis growing operation and claiming damages of $2,500,000. The case is set for trial in November 2026.

On July 16, 2025, Funders App LLC dba Tenthly, a lender to the Company ("Factor K") filed a complaint in Court in Monroe County, New York referring to an outstanding balance of $100,588 after payments of $46,551 on its loan agreement with the Company, dated February 11, 2025. The total claimed amount is $129,463 plus interest from June 30, 2025 and attorney fees. On July 22, 2025, Factor K and the Company entered into a Stipulation of Settlement Agreement pursuant to which each party agreed to a settlement amount and remittance schedule that commenced July 23, 2025. In the event of default on payments, Factor K may file a default judgment for the sum of $129,463.45 less remittances pursuant to the Stipulation of Settlement Agreement.

On July 31, 2025, Webfunder LLC ("Factor I") filed a Settlement Agreement for Stay of Prosecution in the Seventeenth Judicial Court in Broward County, Florida, pursuant to which both parties agreed to a new payment schedule from August 5, 2025 to December 9, 2025 for a total amount of $186,572. The original loan referred to in this Settlement Agreement for Stay of Prosecution was a standard merchant cash advance settlement agreement dated December 12, 2024 (Refer to Note 9 for detail). There are remedies and other protective language for Factor I in the event of non-performance.

On August 1, 2025, the Company and Wave Advance, Inc. ("Factor L") entered into a Settlement Agreement and Mutual Release that requires payments from August 5 to October 27, 2025, for an aggregate amount of $201,170. The original loan referred to in this Settlement Agreement was a Standard Merchant Cash Advance Settlement Agreement dated February 2, 2025 (Refer to Note 9 for detail). There are remedies and other protective language for Factor L in the event of non-performance.

On August 6, 2025, the Company entered into a Standstill Agreement with MaximCash Solutions LLC ("MaximCash"). A complaint was previously filed on July 8, 2025 by MaximCash against the Company in the Third Judicial Court of Utah pertaining to the loan agreement dated December 30, 2024 (the "MaximCash Loan"), as a result of a failure to make the required repayment pursuant to the MaximCash Loan agreement. The claimed amount was $230,738 plus daily interest and attorney fees. On August 7, 2025, the Company wired $61,720 to MaximCash as partial payment. On December 17, 2025, the Company entered into a loan payoff Agreement and Settlement of a prior complaint with this Lender. The Company and MaximCash settled for $40,000 as complete payment for all loans, interest and any claims.

Originally filed March 11, 2026 and served afterwards, Bloc Dispensary LLC, a customer of Visiontech Group Inc., filed in the Superior Court of California, County of San Bernardino, a complaint relating to its prior order of LED lights. The complaint alleges breach of express warranty and breach of implied warranty of merchantability and includes a request for a jury trial. The Company has retained counsel to defend against the complaint.

On April 30, 2026, 1800 Diagonal Lending LLC ("1800 Diagonal") filed an action against the Company in the U.S. District Court for the Eastern District of Virginia alleging defaults under certain convertible promissory notes. On May 8, 2026, the court granted a temporary restraining order requiring the Company to restore and maintain required share reserves under the applicable notes and restricting the issuance or transfer of shares pending compliance with the reserve requirements. On May 19, 2026, the Company and 1800 Diagonal entered into a Settlement Agreement resolving the litigation, pursuant to which the parties agreed to settle approximately $791,323 of claimed indebtedness for $575,000 through a combination of cash payments and note conversions. In connection with the settlement, the Company agreed to maintain share reserves for the exclusive benefit of 1800 Diagonal, including placing 222,000,000 shares in reserve which was recorded by the transfer agent on May 18, 2026, and to increase authorized shares as necessary to satisfy future conversion and reserve requirements by July 31, 2026. Another term requires the Company to pay $50,000 within five business days after the execution of the Settlement Agreement. The Settlement Agreement permits 1800 Diagonal to continue exercising conversion rights under the applicable notes, and upon full satisfaction of the settlement amount, the notes will be cancelled and related share reserves released to the Company.

**ITEM 1A. RISK FACTORS**

***We have incurred substantial operating losses since 2022 and there is doubt about our ability to continue as a going concern.***

We have experienced recurring losses from operations and negative cash flows from operating activities since 2022. For the fiscal years ended December 31, 2024 and December 31, 2025 we incurred substantial losses as shown in our 10K financial statement section. Our actual revenue for the year ended December 31, 2024 and 2025 was approximately $9.3 million and $1.7 million, respectively. Such declining and low volume combined with low gross profit margins are not enough to support high administrative costs relating to our expenses as a public company and regular operating expenses. We raised equity capital twice in 2024 but utilized most proceeds towards repayment of debt incurred in the going-public merger, higher corporate costs and paying interest and principal on short-term loans. We also raised money in 2025 by issuing convertible debt and convertible Preferred Equity. We have drawn on our Equity Line of Credit but these were relatively small amounts that fund daily operations or repay maturing interest and debt. We also secured a $5 million real estate loan but the proceeds were used to refinanced prior outstanding loans and for expenditure on leasehold improvements. Due to the negative cash flow, our financial position is under pressure, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund our expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. If we are unable to realize our assets within the normal operating cycle of a twelve (12) month period, we may have to consider supplementing our available sources of funds through the following sources:

● financial support from our related parties and shareholders;

● other available sources of financing from banks and other financial institutions; and

● equity financing through capital market.

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on us and would materially adversely affect our ability to continue as a going concern.

● the substantial shortfall in revenue may lead to severe liquidity constraints, impacting our ability to fund operations and meet financial obligations;

● reduction in revenue may necessitate pay cuts in key areas (e.g., research and development), marketing and staffing, potentially hindering our growth and competitive position;

 ****

● missing revenue projections by a large margin may diminish investor confidence, potentially leading to a decline in stock price and making it more difficult to obtain financings in the future; and

● significant deviations from projected revenue may trigger increased scrutiny from regulatory bodies, necessitating more stringent reporting and compliance efforts.

These risks may threaten our operational viability and could materially adversely affect our business, financial condition and results of operations.  **

***Our stock has a very low trading price and has been moved to lower tier levels at OTC Markets.***

 **

Even after a reverse stock split in November 2024, our stock continues to trade at low levels. We failed to meet the listing requirements of the Nasdaq Market and was delisted in January 2025. Our stock went below .01 per share in 2026 and consequently, the OTC Markets Group moved us from OTCQB to OTCID, the latter is for Companies trading below .01 per share.

We anticipate capital raises via share issuances to be difficult based on the low trading price and lower attractiveness of OTCID traded stocks, The lower trading price will also affect the conversion price provided to convertible loan lenders necessitating much higher number of share issuances which further dilutes our current shareholders.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

*(A) Unregistered Sales of Equity Securities*

 

On April 8, 2025, Big Lake Capital LLC invested $678,290 in the form of a convertible note. The exercise price is 0.198 and has been exercised. Shares issued are 3,425,706. The control person of Big Lake Capital LLC is Tie Li.

On September 18, 2025, Big Lake Capital LLC sold its interest in Zak Properties to the Company and was issued $5,000,000 of Series B Convertible Preferred and $9,500,000 Series C Convertible Preferred, The Series C has been fully converted to 80,508,475 common shares.

On September 18, 2025 the Company signed a $3,000,000 Convertible note due to Big Lake Capital LLC as part of the sale of Zak Properties LLC. The conversion price is to be determined.

On September 19, 2025, YK Capital Management, LLC invested $700,000 and was issued Series D Convertible Preferred Shares. The conversion price is to be determined. Ting Chen Kao, a foreign-based investor, is the control party at YK Capital Management.

On October 30 and 31, 2025 Huanfu Cui invested $200,000 and $250,000, respectively. He added $50,000 on March 19, 2026 and was issued Series F Preferred Shares amounting to $500,000.

*(B) Use of Proceeds*

Not applicable.

*(C) Issuer Purchases of Equity Securities*

None.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

The Company is past due on its loan to Newtek Business Services Holdco 6, The 10-year loan calls for monthly payments and none have been made in 2026. In a confirmation letter dated March 4, 2026 signed by Jeff Norman, VP at Newtek Bank Orlando Florida office, the interest is paid thru March 18, 2025. The Bank has updated a new penalty interest rate of 18.39%.. This letter also confirms a due date of April 1, 2025. The original due date was July 1, 2033.The loan is personally guaranteed by Tie Li, CEO and Zhiyi Zhang, former president. The loan is also secured by a trust deed on the property leased to Visiontech Group Inc., subsidiary of the Company; the lessor and owner of the real estate is 858 Upland LLC, a related entity controlled by Zhiyi Zhang and two LLC partners.

1800 Diagonal Lending LLC ("Lender") is a convertible note lender to the Company. The Lender has given notice of a loan default with a cross-default provision with other loans outstanding. Due to the very low trading price of the Company stock, the Lender has requested that additional share reserves be recorded by Continental Stock Transfer and Trust ("Transfer Agent") for use in converting its loans into common shares under the terms of the notes. On May 8, 2026, the Lender was granted a Temporary Restraining Order by a court in Virginia to freeze issuances on shares and new reserves submitted to the Transfer Agent. The Transfer Agent confirmed receiving such court order on May 12, 2026 and notified the Company. On May 19, 2026, the Company and 1800 Diagonal entered into a Settlement Agreement resolving the litigation, pursuant to which the parties agreed to settle approximately $791,323 of claimed indebtedness for $575,000 through a combination of cash payments and note conversions. In connection with the settlement, the Company agreed to maintain share reserves for the exclusive benefit of 1800 Diagonal, including placing 222,000,000 shares in reserve, which was recorded by the Transfer Agent on May 18, 2026, and to increase authorized shares as necessary to satisfy future conversion and reserve requirements by July 31, 2026. Another term requires the Company to pay $50,000 within five business days after the execution of the Settlement Agreement. The Settlement Agreement permits 1800 Diagonal to continue exercising conversion rights under the applicable notes, and upon full satisfaction of the settlement amount, the notes will be cancelled and related share reserves released to the Company.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not Applicable.

**ITEM 5. OTHER INFORMATION**

NONE.

**ITEM 6. EXHIBITS**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 31.1 | [Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea029024501ex31-1.htm) |
| 31.2 | [Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea029024501ex31-2.htm) |
| 32.1\*\* | [Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea029024501ex32-1.htm) |
| 101 | Interactive Data Files |
| 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) |

---

\*\* Exhibit 32.1 is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

**SIGNATURES**

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.

---

| | |
|:---|:---|
|  | **NATURE'S MIRACLE HOLDING INC.** |
| Dated: May 27, 2026 | */s/ Tie (James) Li* |
|  | Tie (James) Li |
|  | Chief Executive Officer<br> (Principal Executive Officer) |
| Dated: May 27, 2026 | */s/ Tie (James) Li* |
|  | Tie (James) Li |
|  | Interim Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Tie (James) Li, certify that:

1. I have reviewed this report on Form 10-Q of Nature's Miracle Holding Inc. for the quarter ending March 31, 2026;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Tie (James) Li |
| Tie (James) Li |
| Chief Executive Officer |
| May 27, 2026 |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Tie (James) Li, certify that:

1. I have reviewed this report on Form 10-Q of Nature's Miracle Holding Inc. for the quarter ending March 31, 2026;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| */s/ Tie (James) Li* |
| Tie (James) Li |
| Interim Chief Financial Officer |
| May 27, 2026 |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED**

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Nature's Miracle Holding Inc. (the "Company") on Form 10-Q for the quarter ending March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Tie (James) Li |
| Tie (James) Li |
| Chief Executive Officer |
| May 27, 2026 |
| /s/ Tie (James) Li |
| Tie (James) Li |
| Interim Chief Financial Officer |
| May 27, 2026 |

---