{"url_path":"/sec/apex/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 ****OPERATING","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-12","source_url":"https://www.sec.gov/Archives/edgar/data/2069858/0001213900-26-054917-index.html","accession_number":"0001213900-26-054917","cik":"0002069858","ticker":"APEX","issuer_name":"APEX Global Solutions Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/2069858/0001213900-26-054917-index.html","primary_entity_key":"0002069858","primary_entity_name":"APEX Global Solutions Ltd"},"word_count":6470,"has_tables":true,"body_markdown":"**ITEM 5.****OPERATING\nAND FINANCIAL REVIEW AND PROSPECTS**\n\n** **\n\n**5.A. Operating\nResults**\n\n** **\n\n*The\nfollowing discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity\nand cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction\nwith our financial statements and the related notes thereto included elsewhere in this annual report. The discussion contains forward-looking\nstatements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management.\nActual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors,\nincluding those discussed below and elsewhere in this annual report, particularly in the sections titled “Item 3. Key Information—3.D.\nRisk Factors” and “Introductory Notes—Special Note Regarding Forward-Looking Statements.”*\n\n* *\n\n**Overview**\n\n** **\n\nWe\nare a specialized provider of advanced corrosion prevention, surface preparation, and maintenance solutions, catering to industries where\nasset longevity and structural integrity are paramount. Our core services include hydro blasting and grit blasting for surface cleaning\nand preparation, professional coating and painting for corrosion protection, and comprehensive maintenance and repair services for vessels\noperating at docks and in open waters. Additionally, we offer skilled manpower supply to support marine operations, ensuring that our\nclients receive high-quality, efficient, and safety-compliant solutions.\n\n \n\nWe\nconduct our business through six subsidiaries operating in Singapore, allowing us to deliver comprehensive solutions in the marine, offshore,\nand industrial sectors.\n\n \n\nWe\nbegan our operations by focusing on a single shipyard—formerly known as Sembcorp Marine—where we concentrated our resources\non mastering core service areas. This initial yard served as a proving ground for refining project management strategies, implementing\nbest practices, and building a reputation for quality and reliability. Our deep understanding of site operations has enabled us to become\na valued long-term partner and fostered a collaborative, growth-oriented culture.\n\n \n\nAs\ndemand for our services grew, we have gradually expanded beyond our first yard, undertaking multiple projects simultaneously and building\na strong track record in Singapore. Today, we have established working relationships with major shipyards in Singapore. This organic\ngrowth reflects our ability to scale responsibly while maintaining the high standards that distinguish our service offerings.\n\n \n\nWe\ndistinguish ourselves through a commitment to quality, safety, and continuous improvement. Our mission focuses on enhancing worker expertise,\nimproving efficiency and productivity, prioritizing environmental safety, and fostering a culture of safety awareness. We maintain a\nstrong emphasis on training, ensuring our workforce is equipped with the necessary skills to deliver high-quality work. Our dedication\nto safety is reinforced by our strong compliance track record, maintaining operations with no lost-time accidents.\n\n \n\n**Recent\nDevelopments**\n\n \n\nSince\nDecember 31, 2025, we have not experienced any uncertainties, demands, commitments, or trends that are reasonably likely to have a material\neffect on our net sales or revenues, income from continuing operations, profitability, liquidity, or capital resources, or that would\nrender reported financial information not indicative of future operating results or financial condition.\n\n \n\nOur\nrevenue performance during the current fiscal year ending December 31, 2026 has remained consistent with that of the fiscal year ended\nDecember 31, 2025, and we expect to remain profitable for the current fiscal year. We continue to maintain sufficient liquidity, and\nour capital resources have remained largely unchanged from the prior fiscal year.\n\n \n\nWe\nhave not observed any material changes in customer demand, significant supply chain disruptions, or notable fluctuations in the cost\nof sales. However, ongoing geopolitical conflicts have contributed to global energy market volatility, resulting in increased fuel prices.\nTo date, such increases have not had a material impact on our cost of sales or operating results. In addition, there have been no material\nchanges in the regulatory environment affecting our business, nor have we encountered currency fluctuations that would materially affect\nour financial condition or operating results.\n\n \n\nBased\non the information currently available, we do not anticipate any material trends, uncertainties, or events that would materially affect\nour financial condition or future operating results.\n\n \n\n**Emerging\nGrowth Company**\n\n* *\n\nWe\nqualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions\nfrom certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404\nof the Sarbanes-Oxley Act in the assessment of the emerging growth company’s internal control over financial reporting. In addition,\nSection 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided\nin Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth\ncompany can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have\nelected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable\nto those of companies that comply with such new or revised accounting standards.\n\n \n\n42\n\n \n\n \n\nWe\nwill remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual\ngross revenues of at least $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion\nof our initial public offering; (iii) the date on which we have, during the preceding three year period, issued more than $1.0 billion\nin non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange\nAct, which could occur if the market value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the\nlast business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be\nentitled to the exemptions provided in the JOBS Act discussed above.\n\n \n\n**Results\nof Operations**\n\n** **\n\n**Comparison\nof Operating Results for the Years Ended December 31, 2025 and 2024**\n\n* *\n\nThe\nfollowing table sets forth key components of our results of operations for the fiscal years ended December 31, 2025 and 2024:\n\n** **\n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nRevenue \n 6,969,041  \n 8,961,092  \n 8,696,136  \n 264,956  \n 3.05%\n\n  \n    \n    \n    \n    \n   \n\nCost of revenue \n (3,469,007) \n (4,460,598) \n (4,364,099) \n (96,499) \n 2.21%\n\n  \n    \n    \n    \n    \n   \n\nGross profit \n 3,500,034  \n 4,500,494  \n 4,332,037  \n 168,457  \n 3.89%\n\n  \n    \n    \n    \n    \n   \n\nOperating expenses: \n    \n    \n    \n    \n   \n\nGeneral\nand administrative expenses \n (2,536,613) \n (3,261,686) \n (2,790,147) \n (471,539) \n 16.90%\n\nTotal\noperating expenses \n (2,536,613) \n (3,261,686) \n (2,790,147) \n (471,539) \n 16.90%\n\n  \n    \n    \n    \n    \n   \n\nIncome from operations \n 963,421  \n 1,238,808  \n 1,541,890  \n (303,082) \n (19.66)%\n\n  \n    \n    \n    \n    \n   \n\nOther income (expense): \n    \n    \n    \n    \n   \n\nFinance costs \n (218,127) \n (280,477) \n (323,091) \n 42,614  \n (13.19)%\n\nOther interest expense \n (10,240) \n (13,167) \n -  \n (13,167) \n - \n\nOther\nincome \n 53,801  \n 69,179  \n 186,905  \n (117,726) \n (62.99)%\n\nTotal\nother (expense), net \n (174,566) \n (224,465) \n (136,186) \n (88,279) \n 64.82%\n\n  \n    \n    \n    \n    \n   \n\nIncome before income taxes \n 788,855  \n 1,014,343  \n 1,405,704  \n (391,361) \n (27.84**)**%\n\n  \n    \n    \n    \n    \n   \n\nIncome tax expense \n (4,945) \n (6,358) \n (38,636) \n 32,278  \n (83.54)%\n\n  \n    \n    \n    \n    \n   \n\nNet\nincome \n 783,910  \n 1,007,985  \n 1,367,068  \n (359,083) \n (26.27**)**%\n\n ** **\n\n43\n\n \n\n \n\n**Revenue**\n\n** **\n\nAs\nset forth in the following table, during the fiscal years ended December 31, 2025 and 2024, our revenue was derived from corrosion prevention\nservices and manpower supply services in Singapore:\n\n \n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nCorrosion prevention services \n    \n    \n    \n    \n   \n\n- Third parties \n 5,886,935  \n 7,569,673  \n 7,727,329  \n (157,656) \n (2.04)%\n\nManpower supply services \n    \n    \n    \n    \n   \n\n- Third parties \n 1,044,776  \n 1,343,419  \n 920,807  \n 422,612  \n 45.90%\n\n- Related party \n 37,330  \n 48,000  \n 48,000  \n -  \n - \n\nTotal \n 6,969,041  \n 8,961,092  \n 8,696,136  \n 264,956  \n 3.05%\n\n**  **\n\nFor\nthe fiscal years ended December 31, 2025 and 2024, our revenue increased from S$8,696,136 in 2024 to S$8,961,092 (approximately US$6,969,041)\nin 2025, representing an increase of S$264,956 (approximately US$206,056), or 3.05%. The increase was primarily attributable to higher\ndemand for manpower supply from local third-party customers, mainly shipyards, driven by continued workforce shortages in Singapore’s\nlabor-intensive offshore and marine industry, as well as by shipyards’ strong project pipeline, with higher order books extending\ninto multiple years, which created consistent manpower demand.\n\n** **\n\n**Cost\nof Revenue**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our cost of revenue for the fiscal years ended December 31, 2025 and 2024:\n\n \n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nCopper slag \n362,426  \n466,022  \n234,670  \n231,352  \n98.59% \n\nDiesel for equipment \n 287,061  \n 369,115  \n 372,630  \n (3,515) \n (0.94)%\n\nForeign worker levy \n 362,093  \n 465,595  \n 480,095  \n (14,500) \n (3.02)%\n\nRental of equipment \n 699,010  \n 898,817  \n 1,160,057  \n (261,240) \n (22.52)%\n\nTools and consumables \n 227,344  \n 292,329  \n 88,180  \n 204,149  \n 231.51%\n\nWorkers’ wages and salaries \n 1,492,301  \n 1,918,865  \n 1,949,947  \n (31,082) \n (1.59)%\n\nOther miscellaneous cost \n 38,772  \n 49,855  \n 78,520  \n (28,665) \n (36.51)%\n\nTotal \n 3,469,007  \n 4,460,598  \n 4,364,099  \n 96,499  \n 2.21%\n\n \n\nFor\nthe fiscal years ended December 31, 2025 and 2024, our cost of revenue was S$4,460,598 (approximately US$3,469,007) and S$4,364,099,\nrespectively, representing an increase of S$96,499 (approximately US$75,047), or 2.21%. The increase was mainly attributable to higher\ncopper slag purchases (an increase of S$231,352, approximately US$179,922) and tools and consumables purchases (an increase of S$204,149,\napproximately US$158,767). The increase was partially offset by a decrease in rental of equipment (a decrease of S$261,240, approximately\nUS$203,166) and direct labor costs comprising workers’ wages and foreign worker levy (a decrease of S$45,582, approximately US$35,449).\n\n \n\nCopper\nslag is primarily used for grit blasting. The increase in copper slag purchases was primarily due to a higher volume of grit blasting\njobs. Tools and consumables primarily refer to items used in the course of our services, such as safety helmets, safety goggles, spray\ntips, leather gloves, etc. The increase in tools and consumables purchases was mainly due to the replenishment of stock levels to support\nongoing operations.\n\n** **\n\nRental\nof equipment represents the leasing of equipment primarily from a related party. The decrease in equipment rental was mainly attributable\nto better utilization of owned equipment, as well as a change in project mix, with more smaller-scale or shorter-duration jobs that required\nless rented equipment. The decrease in direct labor costs was mainly attributable to the lower headcount of foreign workers.\n\n \n\n**Gross\nProfit and Gross Profit Margin**\n\n** **\n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nGross profit \n 3,500,034  \n 4,500,494  \n 4,332,037  \n 168,457  \n 3.89%\n\n  \n    \n    \n    \n    \n   \n\nGross profit margin \n 50% \n 50% \n 50% \n    \n - \n\n \n\n44\n\n \n\n** **\n\nFor\nthe fiscal years ended December 31, 2025 and 2024, our gross profit was S$4,500,494 (approximately US$3,500,034) and S$4,332,037, respectively.\nOur gross profit margin remained constant at 50% in both years.\n\n** **\n\n**General\nand Administrative Expenses**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our general and administrative expenses for the fiscal years ended December 31, 2025 and\n2024: \n\n \n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nBad debts written-off \n 142,762  \n 183,570  \n -  \n 183,570  \n N/A \n\nDepreciation and amortization expenses \n 73,444  \n 94,437  \n 212,837  \n (118,400) \n (55.63)%\n\nOperating lease expense \n 292,546  \n 376,168  \n 294,819  \n 81,349  \n 27.59%\n\nStaff costs (including directors’ remuneration) \n 1,263,340  \n 1,624,457  \n 1,416,048  \n 208,409  \n 14.72%\n\nWorkers’ lodging and expenses \n 427,773  \n 550,049  \n 474,802  \n 75,247  \n 15.85%\n\nOther expenses \n 336,748  \n 433,005  \n 391,641  \n 41,364  \n 10.56%\n\nTotal \n 2,536,613  \n 3,261,686  \n 2,790,147  \n 471,539  \n 16.90%\n\n \n\nFor\nthe fiscal years ended December 31, 2025 and 2024, our general and administrative expenses was S$3,261,686 (approximately US$2,536,613)\nand S$2,790,147, respectively, representing an increase of S$471,539 (approximately US$366,716), or 16.90%.\n\n \n\nBad\ndebts written-off represent trade receivables due from a third-party customer that were assessed to be irrecoverable based on management’s\nassessment of aging, collection efforts, and the customer’s financial condition.\n\n \n\nDepreciation\nexpense is charged on our plant and equipment which included (i) machineries, (ii) motor vehicles, and (iii) forklift. Amortization expense\nis charged on our finance lease right-of-use assets. The decrease was mainly attributable to the disposal of plant and equipment and\nfinance lease right-of-use assets during 2024. A total of seven units of high-pressure pumps were disposed of in 2024. In addition, certain\nfinance lease right-of-use assets were fully amortized in 2024. As a result, fewer units of plant and equipment and finance lease right-of-use\nassets were subject to depreciation and amortization in 2025, leading to lower depreciation and amortization expenses compared to 2024.\n\n \n\nOperating\nlease expense represents the total lease cost recognized on a straight-line basis over the lease term under ASC 842, relating to operating\nlease right-of-use assets and corresponding lease liabilities. The increase was mainly attributable to two new operating leases that\ncommenced in 2025, as well as an increase in monthly lease expenses upon renewal of four existing operating leases.\n\n \n\nStaff\ncosts mainly represent office staff salaries and contribution to Central Provident Fund (“CPF”), a mandatory social security\nscheme in Singapore, for our employees’ remuneration. The increase in staff costs was primarily due to higher headcount, as we\nrecruited additional staff to support business operations and growth.\n\n \n\nWorkers’\nlodging and expenses represent short-term leases of workers’ dormitories, workers’ food expenses, and other worker-related\nexpenses. The increase was mainly attributable to higher workers’ lodging expenses, driven by (i) an increase in monthly lease\nrate following the renewal of one lease in October 2025, and (ii) the longer lease recognition period in 2025 for a lease that commenced\nin mid-October 2024, which was only partially recognized in 2024.\n\n \n\nOther\nexpenses primarily comprised entertainment, petrol and diesel for motor vehicles, rental of shipyard offices, telecommunication and utilities,\ninsurance, upkeep of motor vehicles, staff and workers’ medical expenses, and other operating expenses.\n\n** **\n\n**Finance\nCosts**\n\n \n\nThe\nfollowing table sets forth the breakdown of our finance costs for the fiscal years ended December 31, 2025 and 2024:\n\n \n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nBank borrowings interest \n 109,710  \n 141,070  \n 147,602  \n (6,532) \n (4.43)%\n\nFinance lease liabilities interest \n 3,325  \n 4,275  \n 5,113  \n (838) \n (16.39)%\n\nInvoice financing charges \n 105,092  \n 135,132  \n 170,376  \n (35,244) \n (20.69)%\n\nTotal \n 218,127  \n 280,477  \n 323,091  \n (42,614) \n (13.19**)**%\n\n \n\n45\n\n \n\n \n\nOur\ninterest expense was S$280,477 (approximately US$218,127) for the fiscal year ended December 31, 2025, as compared to S$323,091 for the\nfiscal year ended December 31, 2024, a decrease of S$42,614 (approximately US$33,141), or 13.19%. The decrease was primarily due to lower\ninvoice financing charges, as we have fully repaid and cancelled an invoice financing facility in 2025.\n\n \n\n**Other\nInterest Expense**\n\n \n\nOther\ninterest expense represents interest incurred on the Goods and Services Tax (GST) instalment plan for the fiscal year ended December\n31, 2025, amounting to S$13,167 (approximately US$10,240). No such interest was incurred for the fiscal year ended December 31, 2024.\n\n \n\n**Other\nIncome**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our other income for the fiscal years ended December 31, 2025 and 2024:\n\n** **\n\n  \nFiscal\nYears Ended December 31,  \n   \n  \n\n  \n2025  \n2025  \n2024  \nVariance  \n% \n\n  \nUS$  \nS$  \nS$  \nS$  \n  \n\n  \n   \n   \n   \n   \n  \n\nFair value gain on other investment \n 5,127  \n 6,592  \n -  \n 6,592  \n N/A \n\nGovernment grants \n 39,044  \n 50,204  \n 75,798  \n (25,594) \n (33.77)%\n\nGain on disposal of plant and equipment \n -  \n -  \n 89,386  \n (89,386) \n (100.00)%\n\nGain on disposal of right-of-use assets \n -  \n -  \n 21,721  \n (21,721) \n (100.00)%\n\nOther income \n 9,630  \n 12,383  \n -  \n 12,383  \n N/A \n\nTotal \n 53,801  \n 69,179  \n 186,905  \n (117,726) \n (62.99**)**%\n\n \n\nOur\nother income was S$69,179 (approximately US$53,801) for the fiscal year ended December 31, 2025, compared to S$186,905 for the fiscal\nyear ended December 31, 2024, a decrease of S$117,726 (approximately US$91,556), or 62.99%. The decrease was primarily due to the gain\non disposal of plant and equipment recognized in 2024, whereas no such disposal occurred in 2025.\n\n \n\nGovernment\ngrants were mainly comprised of: -\n\n \n\n \n(i)\n*Progressive Wages Credit\nScheme (PWCS):* The PWCS is a wage support initiative introduced by the Singapore Government to help employers co-fund wage increases\nfor lower-wage workers. It supports companies in adjusting to mandatory wage increases and encourages employers to voluntarily raise\nwages of eligible workers.\n\n \n\n \n(ii)\n*Senior Employment Credit:*The Senior Employment Credit is a wage support scheme introduced by the Singapore Government to encourage employers to hire and\nretain older Singaporean workers.\n\n \n\n \n(iii)\n*Corporate Income Tax\n(CIT) Rebate Cash Grant:*The CIT Rebate Cash Grant is a support measure introduced by the Singapore Government to provide cash\npayouts to companies to help ease business costs. Eligibility is generally limited to active companies that have made CPF contributions\nfor at least one local employee in the relevant year of assessment.\n\n** **\n\n**Income\nTax Expense**\n\n** **\n\nProfit\nbefore income tax is subject to a corporate tax rate of 17% in Singapore.\n\n** **\n\nFor\nthe fiscal year ended December 31, 2025, our income tax expense was S$6,358 (approximately US$4,945). Our effective tax rate, calculated\nas income tax divided by profit before income tax, was approximately 0.63%, primarily due to the utilization of unused tax losses, as\nwell as the reversal of temporary differences related to deferred tax.\n\n \n\nFor\nthe fiscal year ended December 31, 2024, our income tax expense was S$38,636 (approximately US$28,282). Our effective tax rate, calculated\nas income tax divided by profit before income tax, was approximately 2.75%, primarily due to the utilization of unused tax losses and\ncapital allowances.\n\n** **\n\n**Net\nIncome**\n\n \n\nAs\na result of the foregoing, our net income amounted to S$1,007,985 (approximately US$783,910) and S$1,367,068 for the fiscal years ended\nDecember 31, 2025 and 2024, respectively. The decrease in net income was mainly attributable to higher operating expenses, particularly\nbad debts written off, operating lease expense, staff costs, and workers’ lodging and expenses. In addition, other income decreased\nin 2025, mainly due to the absence of gains on disposal of plant and equipment. Consequently, notwithstanding higher gross profit, the\nincrease in operating expenses and the decrease in other income resulted in lower net income in 2025 as compared to 2024. \n\n \n\n46\n\n \n\n \n\n**Comparison\nof Operating Results for the Years Ended December 31, 2024 and 2023**\n\n \n\nThe\nfollowing table sets forth key components of our results of operations for the fiscal years ended December 31, 2024 and 2023:\n\n** **\n\n \n \n**Fiscal\nyears Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nRevenue\n \n \n6,365,572\n \n \n \n8,696,136\n \n \n \n8,000,921\n \n \n \n695,215\n \n \n \n8.69\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCost of revenue\n \n \n(3,194,521\n)\n \n \n(4,364,099\n)\n \n \n(4,954,702\n)\n \n \n590,603\n \n \n \n(11.92\n)%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGross profit\n \n \n3,171,051\n \n \n \n4,332,037\n \n \n \n3,046,219\n \n \n \n1,285,818\n \n \n \n42.21\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOperating expenses:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGeneral\nand administrative expenses\n \n \n(2,042,387\n)\n \n \n(2,790,147\n)\n \n \n(2,761,082\n)\n \n \n(29,065\n)\n \n \n1.05\n%\n\nTotal\noperating expenses\n \n \n(2,042,387\n)\n \n \n(2,790,147\n)\n \n \n(2,761,082\n)\n \n \n(29,065\n)\n \n \n1.05\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Income from operations**\n \n \n**1,128,664**\n \n \n \n**1,541,890**\n \n \n \n**285,137**\n \n \n \n**1,256,753**\n \n \n \n**440.75**\n**%**\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOther income (expense):\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nFinance costs\n \n \n(236,503\n)\n \n \n(323,091\n)\n \n \n(261,778\n)\n \n \n(61,313\n)\n \n \n23.42\n%\n\nOther\nincome\n \n \n136,815\n \n \n \n186,905\n \n \n \n72,318\n \n \n \n114,587\n \n \n \n158.45\n%\n\nTotal\nother (expense), net\n \n \n(99,688\n)\n \n \n(136,186\n)\n \n \n(189,460\n)\n \n \n53,274\n \n \n \n(28.12\n)%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Income before income taxes**\n \n \n**1,028,976**\n \n \n \n**1,405,704**\n \n \n \n**95,677**\n \n \n \n**1,310,027**\n \n \n \n**1,369.22**\n**%**\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nIncome tax (expense)\ncredit\n \n \n(28,282\n)\n \n \n(38,636\n)\n \n \n8,005\n \n \n \n(46,641\n)\n \n \n582.65\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Net income**\n \n \n**1,000,694**\n \n \n \n**1,367,068**\n \n \n \n**103,682**\n \n \n \n**1,263,386**\n \n \n \n**1,218.52**\n**%**\n\n \n\n**Revenue**\n\n** **\n\nAs\nset forth in the following table, during the fiscal years ended December 31, 2024 and 2023, our revenue was derived from corrosion prevention\nservices and manpower supply services in Singapore:\n\n \n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCorrosion prevention services\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n- Third parties\n \n \n5,656,405\n \n \n \n7,727,329\n \n \n \n7,248,430\n \n \n \n478,899\n \n \n \n6.61\n%\n\n- Related party\n \n \n-\n \n \n \n-\n \n \n \n360,000\n \n \n \n(360,000\n)\n \n \n(100.00\n)%\n\nManpower supply services\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n- Third parties\n \n \n674,031\n \n \n \n920,807\n \n \n \n392,491\n \n \n \n528,316\n \n \n \n134.61\n%\n\n- Related party\n \n \n35,136\n \n \n \n48,000\n \n \n \n-\n \n \n \n48,000\n \n \n \n0.00\n%\n\n**Total**\n \n \n**6,365,572**\n \n \n \n**8,696,136**\n \n \n \n**8,000,921**\n \n \n \n**695,215**\n \n \n \n**8.69**\n**%**\n\n** **\n\nFor\nthe fiscal years ended December 31, 2024 and 2023, our revenue increased from S$8,000,921 in 2023 to S$8,696,136 (approximately US$6,365,572)\nin 2024, representing an increase of S$695,215 (approximately US$508,897), or 8.69%. The increase was primarily attributable to higher\ndemand for manpower supply from local third-party customers, driven by the post-COVID recovery in offshore and marine activities and\ncontinued workforce shortages in Singapore’s labor-intensive offshore and marine industry.\n\n \n\n47\n\n \n\n \n\n**Cost\nof Revenue**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our cost of revenue for the fiscal years ended December 31, 2024 and 2023:\n\n \n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCopper slag\n \n \n171,779\n \n \n \n234,670\n \n \n \n448,423\n \n \n \n(213,753\n)\n \n \n(47.67\n)%\n\nDiesel for equipment\n \n \n272,765\n \n \n \n372,630\n \n \n \n415,272\n \n \n \n(42,642\n)\n \n \n(10.27\n)%\n\nForeign worker levy\n \n \n351,430\n \n \n \n480,095\n \n \n \n422,878\n \n \n \n57,217\n \n \n \n13.53\n%\n\nRental of equipment\n \n \n849,162\n \n \n \n1,160,057\n \n \n \n1,336,367\n \n \n \n(176,310\n)\n \n \n(13.19\n)%\n\nSubcontractor charges\n \n \n-\n \n \n \n-\n \n \n \n209,309\n \n \n \n(209,309\n)\n \n \n(100.00\n)%\n\nTools and consumables\n \n \n64,548\n \n \n \n88,180\n \n \n \n192,224\n \n \n \n(104,044\n)\n \n \n(54.13\n)%\n\nWorkers’ wages and salaries\n \n \n1,427,361\n \n \n \n1,949,947\n \n \n \n1,912,644\n \n \n \n37,303\n \n \n \n1.95\n%\n\nOther miscellaneous cost\n \n \n57,476\n \n \n \n78,520\n \n \n \n17,585\n \n \n \n60,935\n \n \n \n346.52\n%\n\n**Total**\n \n \n**3,194,521**\n \n \n \n**4,364,099**\n \n \n \n**4,954,702**\n \n \n \n**(590,603**\n**)**\n \n \n**(11.92**\n**)%**\n\n  \n\nFor\nthe fiscal years ended December 31, 2024 and 2023, our cost of revenues decreased from S$4,954,702 in 2023 to S$4,364,099 (approximately\nUS$3,194,521) in 2024, representing a decrease of S$590,603 (approximately US$432,321), or 11.92%. The decrease was mainly attributable\nto the decrease in copper slag purchases (decrease by S$213,753, approximately US$156,467), subcontractor charges (decrease by S$209,309,\napproximately US$153,214) and tools and consumables purchases (decrease by S$104,044, approximately US$76,160).\n\n \n\nCopper\nslag is primarily used for grit blasting. The decrease in copper slag purchases was mainly due to fewer grit blasting jobs in 2024. Subcontractor\ncharges primarily represent manpower supplied by third-party vendors. The decrease in subcontractor charges was mainly due to the absence\nof demand for external manpower, as we had sufficient internal manpower in 2024. Tools and consumables primarily refer to items used\nin the course of our services, such as safety helmets, safety goggles, spray tips, leather gloves, etc. The decrease in tools and consumables\npurchases was mainly due to our maintaining an adequate stock levels, which reduced the need for additional purchases in 2024.\n\n** **\n\n**Gross\nProfit and Gross Profit Margin**\n\n** **\n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGross profit\n \n \n3,171,051\n \n \n \n4,332,037\n \n \n \n3,046,219\n \n \n \n1,285,818\n \n \n \n42.21\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGross profit margin\n \n \n50\n%\n \n \n50\n%\n \n \n38\n%\n \n \n \n \n \n \n12\n%\n\n** **\n\nFor\nthe fiscal years ended December 31, 2024 and 2023, our gross profit increased from S$3,046,219 in 2023 to S$4,332,037 (approximately\nUS$3,171,051) in 2024. Our gross profit margin increased from 38% in 2023 to 50% in 2024, representing an increase of 12%, driven by\nhigher revenue and effective management that lowered the cost of revenue.\n\n \n\n**General\nand Administrative Expenses**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our general and administrative expenses for the fiscal years ended December 31, 2024 and\n2023:\n\n \n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nDepreciation and amortization expenses\n \n \n155,797\n \n \n \n212,837\n \n \n \n303,031\n \n \n \n(90,194\n)\n \n \n(29.76\n)%\n\nOperating lease expense\n \n \n215,808\n \n \n \n294,819\n \n \n \n235,134\n \n \n \n59,685\n \n \n \n25.38\n%\n\nStaff costs (including director’s remuneration)\n \n \n1,036,547\n \n \n \n1,416,048\n \n \n \n1,352,572\n \n \n \n63,476\n \n \n \n4.69\n%\n\nWorkers’ lodging and expenses\n \n \n347,555\n \n \n \n474,802\n \n \n \n303,558\n \n \n \n171,244\n \n \n \n56.41\n%\n\nOther expenses\n \n \n286,680\n \n \n \n391,641\n \n \n \n566,787\n \n \n \n(175,146\n)\n \n \n(30.90\n)%\n\n**Total**\n \n \n**2,042,387**\n \n \n \n**2,790,147**\n \n \n \n**2,761,082**\n \n \n \n**29,065**\n \n \n \n**1.05**\n**%**\n\n \n\nFor\nthe fiscal years ended December 31, 2024 and 2023, our general and administrative expenses increased from S$2,761,082 in 2023 to S$2,790,147\n(approximately US$2,042,387) in 2024, representing an increase of S$29,065 (approximately US$21,276), or 1.05%. \n\n  \n\n48\n\n \n\n \n\nDepreciation\nexpense is charged on our plant and equipment which included (i) machineries, (ii) motor vehicles, and (iii) forklift. Amortization expense\nis charged on our finance lease right-of-use assets. The decrease was mainly attributable to the disposal of plant and equipment and\nfinance lease right-of-use assets, resulting in lower depreciation and amortization expenses.\n\n \n\nOperating\nlease expense represents the total lease cost recognized on a straight-line basis over the lease term under ASC 842, relating to operating\nlease right-of-use assets and corresponding lease liabilities.\n\n \n\nStaff\ncosts mainly represent the salaries and contribution to Central Provident Fund (“CPF”), a mandatory social security scheme\nin Singapore, for our employees’ remuneration. Our staff costs remained consistent at approximately S$1.4 million for the fiscal\nyears ended December 31, 2024, and 2023.\n\n \n\nWorkers’\nlodging and expenses represent short-term lease of workers’ dormitories and other workers expenses. The increase was mainly attributable\nto higher monthly lease payments, as well as the addition of one more leased dormitory in 2024.\n\n \n\nOther\nexpenses were mainly comprised of entertainment, insurance, petrol expenses, rental of shipyard office, telecommunication expenses, utilities\nexpenses and other miscellaneous expenses.\n\n** **\n\n**Finance\nCosts**\n\n \n\nThe\nfollowing table sets forth the breakdown of our finance costs for the fiscal years ended December 31, 2024 and 2023:\n\n \n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\nBank borrowings interest\n \n \n108,045\n \n \n \n147,602\n \n \n \n177,669\n \n \n \n(30,067\n)\n \n \n(16.92\n)%\n\nFinance lease liabilities interest\n \n \n3,743\n \n \n \n5,113\n \n \n \n13,362\n \n \n \n(8,249\n)\n \n \n(61.73\n)%\n\nInvoice financing charges\n \n \n124,715\n \n \n \n170,376\n \n \n \n70,747\n \n \n \n99,629\n \n \n \n140.82\n%\n\n**Total**\n \n \n**236,503**\n \n \n \n**323,091**\n \n \n \n**261,778**\n \n \n \n**61,313**\n \n \n \n**23.42**\n**%**\n\n \n\nOur\ninterest expense was S$323,091 (approximately US$236,503) for the fiscal year ended December 31, 2024, as compared to S$261,778 for the\nfiscal year ended December 31, 2023, an increase of S$61,313 (approximately US$44,881), or 23.42%. The increase was primarily due to\nthe invoice financing charges, as we obtained additional invoice financing in 2024.\n\n \n\n**Other\nIncome**\n\n** **\n\nThe\nfollowing table sets forth the breakdown of our other income for the fiscal years ended December 31, 2024 and 2023:\n\n** **\n\n \n \n**Fiscal years Ended December 31,**\n \n \n \n \n \n \n \n\n \n \n**2024**\n \n \n**2024**\n \n \n**2023**\n \n \n**Variance**\n \n \n**%**\n \n\n \n \n**US$**\n \n \n**S$**\n \n \n**S$**\n \n \n**S$**\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nFair value gain on other investment\n \n-\n \n \n-\n \n \n1,500\n \n \n(1,500\n)\n \n(100.00\n)%\n\nGovernment grants\n \n \n55,484\n \n \n \n75,798\n \n \n \n35,062\n \n \n \n40,736\n \n \n \n116.18\n%\n\nGain on disposal of plant and equipment\n \n \n65,431\n \n \n \n89,386\n \n \n \n15,093\n \n \n \n74,293\n \n \n \n492.23\n%\n\nGain on disposal of right-of-use assets\n \n \n15,900\n \n \n \n21,721\n \n \n \n12,670\n \n \n \n9,051\n \n \n \n71.44\n%\n\nOther income\n \n \n-\n \n \n \n-\n \n \n \n7,993\n \n \n \n(7,993\n)\n \n \n(100.00\n)%\n\n**Total**\n \n \n**136,815**\n \n \n \n**186,905**\n \n \n \n**72,318**\n \n \n \n**114,587**\n \n \n \n**158.45**\n**%**\n\n** **\n\nOur\nother income was S$186,905 (approximately US$136,815) for the fiscal year ended December 31, 2024, as compared to S$72,318 for the fiscal\nyear ended December 31, 2023, an increase of S$114,587 (approximately US$83,878), or 158.45%. The increase was primarily due to an increase\nin gain on disposal of plant and equipment and right-of-use assets, and government grants.\n\n \n\nGovernment\ngrants were mainly comprised of:\n\n \n\n \n(i)\n*Progressive Wages Credit\nScheme (PWCS):* The PWCS is a wage support initiative introduced by the Singapore Government to help employers co-fund wage increases\nfor lower-wage workers. It supports companies in adjusting to mandatory wage increases and encourages employers to voluntarily raise\nwages of eligible workers.\n\n \n\n \n(ii)\n*Senior Employment Credit:*The Senior Employment Credit is a wage support scheme introduced by the Singapore Government to encourage employers to hire and\nretain older Singaporean workers.\n\n  \n\n49\n\n \n\n \n\n**Income\nTax Expense (Credit)**\n\n** **\n\nProfit\nbefore income tax is subject to a corporate tax rate of 17% in Singapore.\n\n** **\n\nFor\nthe fiscal year ended December 31, 2024, our income tax expense was S$38,636 (approximately US$28,282). Our effective tax rate, calculated\nas income tax divided by profit before income tax, was approximately 2.75%, primarily due to the utilization of unused tax losses and\ncapital allowances. The increase in income tax expense was generally in line with the increase in profit for the fiscal year.\n\n \n\nFor\nthe fiscal year ended December 31, 2023, our income tax credit was S$8,005. Our effective tax rate, calculated as income tax divided\nby profit before income tax, was approximately 7.23%, mainly due to an increase in income not subject to tax and the utilization of unused\ntax losses and capital allowances. There was also a reversal of temporary differences amounting to S$8,613 and a corporate income tax\n(CIT) rebate cash grant of S$6,000.\n\n** **\n\n**Net\nIncome**\n\n \n\nAs\na result of the foregoing, our net income amounted to S$1,367,068 (approximately US$1,000,694) and S$103,682 for the fiscal years ended\nDecember 31, 2024 and 2023, respectively. The increase in net income was mainly driven by higher revenue, other income, and effective\ncost management that lowered the cost of revenue.\n\n \n\n**5.B. Liquidity\nand Capital Resources**\n\n \n\nTo\ndate, we have financed our operations primarily through cash flows from operations and bank borrowings. We plan to support our future\noperations primarily from cash generated from our operations and proceeds from this initial public offering.\n\n \n\nAs\nreflected in our audited consolidated financial statements, we had a net income of S$1,007,985 (approximately US$783,910) for the fiscal\nyear ended December 31, 2025, as compared to a net income of S$1,367,068 and S$103,682 for the fiscal years ended December 31, 2024 and\n2023, respectively. As of December 31, 2025, 2024, and 2023, we had cash of S$1,132,117 (approximately US$880,447), S$2,045,509, and\nS$1,776,304, respectively.\n\n \n\nWe\nhad net assets of S$2,938,924 (approximately US$2,285,602), S$4,529,092, and S$3,162,024 as of December 31, 2025, 2024, and 2023, respectively.\nOur working capital requirements are influenced by the size of our operations, the volume and dollar value of our sales contracts, the\nprogress of execution on our customer contracts, and the timing for collecting accounts receivable, and repayment of accounts payable.\n\n \n\nAs\nof December 31, 2025, 2024, and 2023, we had outstanding bank borrowings balances of S$2,909,278 (approximately US$2,262,545), S$4,117,146,\nand S$4,321,767, respectively, which are payable over three to seven years and bear annual interest rates ranging from 2.3% to 10.0% in\n2025 and from 2.0% to 10.0% in both 2024 and 2023.\n\n \n\nWe\nbelieve that our existing cash balances, together with cash flows generated from operating activities and available bank borrowings,\nwill be adequate to meet our working capital and capital expenditure requirements, consistent with our historical funding needs. If we\nexperience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we determine to accelerate\nour growth, then additional financing may be required. No assurance can be given, however, that additional financing, if required, would\nbe available at all or on favorable terms. Such financing may include the use of additional debt or the issuance of equity.\n\n \n\n**Summary\nof Cash Flows**\n\n \n\nThe\nfollowing table sets forth a summary of our cash flows for the fiscal years ended December 31, 2025, 2024, and 2023: \n\n \n\n  \nFiscal\nYears Ended December 31, \n\n  \n2025  \n2025  \n2024  \n2023 \n\n  \nUS$  \nS$  \nS$  \nS$ \n\n  \n   \n   \n   \n  \n\nNet cash provided by (used in)\noperating activities \n 1,078,057  \n 1,386,212  \n 1,401,302  \n (81,305)\n\nNet cash used in investing activities \n (40,842) \n (52,517) \n (27,712) \n - \n\nNet cash (used in) provided\nby financing activities \n (1,747,560) \n (2,247,087) \n (1,104,385) \n 11,132 \n\nNet changes in cash and cash equivalents \n (710,345) \n (913,392) \n 269,205  \n (70,173)\n\nCash and cash equivalents\nat beginning of year \n 1,590,792  \n 2,045,509  \n 1,776,304  \n 1,846,477 \n\nCash and cash equivalents\nat end of year \n 880,447  \n 1,132,117  \n 2,045,509  \n 1,776,304\n\n \n\n \n\n50\n\n \n\n \n\n*Operating\nActivities*\n\n** **\n\nNet\ncash provided by operating activities amounted to S$1,386,212 (approximately US$1,078,057) for the fiscal year ended December 31, 2025,\nmainly derived from:\n\n \n\n \n(i)\nnet income of S$1,007,985\n(approximately US$783,910);\n\n \n\n \n(ii)\nvarious non-cash items\nof S$605,253 (approximately US$470,705), such as depreciation of plant and equipment, amortization of right-of-use assets, bad debts\nwritten-off, deferred tax adjustments and fair value gain on other investments;\n\n \n\n \n(iii)\na decrease in accounts\nreceivable and other current assets of S$1,724,475 (approximately US$1,341,125); which were partially offset by\n\n \n\n \n(iv)\nan increase in contract\nassets of S$1,028,638 (approximately US$799,972);\n\n \n\n \n(v)\na decrease in accounts\npayable, accrued liabilities and other payables and operating lease liabilities of S$938,273 (approximately US$729,695); and\n\n \n\n \n(vi)\nan increase of income tax\npayable of S$15,410 (approximately US$11,984).\n\n \n\nNet\ncash provided by operating activities amounted to S$1,401,302 (approximately US$1,025,753) for the fiscal year ended December 31, 2024,\nmainly derived from:\n\n \n\n \n(i)\nnet income of S$1,367,068;\n\n  \n\n \n(ii)\nvarious non-cash items\nof S$383,483, such as depreciation of plant and equipment, amortization of right-of-use assets, and gain on disposal of plant and\nequipment/right-of-use assets;\n\n \n\n \n(iii)\nan increase in accounts\nreceivables and other current assets of S$669,511;\n\n \n\n \n(iv)\na decrease in contract\nassets and income tax receivable of S$78,119; which were partially offset by\n\n \n\n \n(v)\nan increase in accounts\npayable, accrued liabilities and other payables, and income tax payable of S$523,920; and\n\n \n\n \n(vi)\na decrease in operating\nlease liabilities of S$281,777.\n\n \n\nNet\ncash used in operating activities amounted to S$81,305 for the fiscal year ended December 31, 2023, mainly derived from:\n\n \n\n \n(i)\nnet income of S$103,682;\n\n \n\n \n(ii)\nvarious non-cash items\nof S$492,012, such as depreciation of plant and equipment, amortization of right-of-use assets, gain on disposal of plant and equipment/right-of-use\nassets, and fair value gain on other investments;\n\n \n\n \n(iii)\na decrease in accounts\nreceivables of S$1,540,992;\n\n \n\n \n(iv)\nan increase in contract\nassets, other current assets and income tax receivable of S$955,819;\n\n \n\n \n(v)\na decrease in accounts\npayable, contract liabilities, and accrued liabilities and other payables of S$1,047,408, which were offset by an increase in income\ntax payable of S$3,773; and\n\n \n\n \n(vi)\na decrease in operating\nlease liabilities of S$218,537.\n\n \n\n*Investing\nActivities*\n\n \n\nNet\ncash used in investing activities amounted to S$52,517 (approximately US$40,842) for the fiscal year ended December 31, 2025, representing\nthe purchase of plant and equipment.\n\n \n\nNet\ncash used in investing activities amounted to S$27,712 for the fiscal year ended December 31, 2024, representing the purchase of other\ninvestment, specifically a keyman insurance policy.\n\n \n\nNet\ncash used in investing activities was nil for the fiscal year ended December 31, 2023.\n\n \n\n51\n\n \n\n* *\n\n*Financing\nActivities*\n\n \n\nNet\ncash used in financing activities amounted to S$2,247,087 (approximately US$1,747,560) for the fiscal year ended December 31, 2025, primarily\nattributable to:\n\n \n\n \n(i)\nrepayment of bank borrowings\nand finance lease liabilities totaling S$1,251,967 (approximately US$973,655);\n\n \n\n \n(ii)\npayment of deferred offering\ncost amounting to S$1,091,021 (approximately US$848,487); and\n\n \n\n \n(iii)\nrepayment to related parties\namounting to S$55,400 (approximately US$43,085).\n\n \n\nThese\ncash outflows were partially offset by a repayment from related parties amounting to S$106,219 (approximately US$82,607) and share subscription\nreceived amounting to S$45,082 (approximately US$35,060).\n\n \n\nNet\ncash used in financing activities amounted to S$1,104,385 for the fiscal year ended December 31, 2024, primarily attributable to:\n\n \n\n \n(i)\nrepayment of bank borrowings\nand finance lease liabilities amounting to S$324,139;\n\n \n\n \n(ii)\nadvances to related parties\namounting to S$368,881; and\n\n \n\n \n(iii)\nrepayment to related parties\nand director amounting to S$411,365.\n\n** **\n\nNet\ncash provided by financing activities amounted to S$11,132 for the fiscal year ended December 31, 2023, primarily attributable to:\n\n \n\n \n(i)\nproceeds from bank borrowings\nof S$492,410, which were offset by repayment of finance lease liabilities of S$258,211;\n\n \n\n \n(ii)\nrepayment from related\nparties of S$483,335; and\n\n \n\n \n(iii)\nrepayment to related parties\nand director of S$706,402.\n\n** **\n\n**Off-Balance\nSheet Arrangement**\n\n** **\n\nWe\ndid not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships\nwith unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose\nentities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited\npurposes.\n\n \n\n**Commitments\nand Contingencies**\n\n** **\n\nIn\nthe normal course of business, we are subject to loss contingencies, such as legal proceedings and claims arising out of our business,\nthat cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450-20,\n“Loss Contingencies,” we will record accruals for such loss contingencies when it is probable that a liability has been incurred\nand the amount of loss can be reasonably estimated. As of December 31, 2025, 2024, and 2023, we have no material contingencies.\n\n \n\nThe\nfollowing table summarizes our contractual obligations as of December 31, 2025:\n\n \n\n  \nPayments\ndue by period \n\n  \nTotal  \nTotal  \nWithin\n1\n\nyear  \nWithin\n2 to 5 years \n\n  \nUS$  \nS$  \nS$  \nS$ \n\n  \n   \n   \n   \n  \n\nBank borrowings \n 2,389,937  \n 3,073,084  \n 2,139,237  \n 933,847 \n\nLease commitments \n 380,336  \n 489,052  \n 394,052  \n 95,000 \n\nTotal \n 2,770,273  \n 3,562,136  \n 2,533,289  \n 1,028,847 \n\n \n\n52\n\n \n\n \n\nThe\nCompany also incurs short-term lease expenses under arrangements with terms of 12 months or less. These leases are not included in the\ntable above as they are not recognized on the balance sheet and are expensed as incurred.\n\n \n\n**5.C. Research\nand Development, Patents, Licenses, Etc.**\n\n** **\n\nSee\n“*Item 4. Information on the Company—4.B. Business Overview*.”\n\n \n\n**5.D. Trend\nInformation**\n\n** **\n\nWe\nbelieve the following trends are likely to affect the industries we operate in and, as a result, our company:\n\n \n\n●**Marine\nand Offshore Industry Activity.**Demand for our services is significantly influenced\nby activity levels in Singapore’s shipbuilding and ship repair industry. Factors such\nas global shipping rates, new vessel orders, and maintenance cycles can impact demand for\ncorrosion prevention and maintenance services.\n\n \n\n●**Regulatory\nRequirements.**Increasingly stringent environmental and safety regulations may drive\ndemand for high-quality corrosion prevention services. Our compliance with industry standards\nand certifications positions us well to meet these requirements.\n\n \n\n●**Labor\nMarket Conditions.**The availability and cost of skilled labor in Singapore can impact\nour ability to provide services and our operating costs. We continuously monitor labor market\nconditions and invest in training to maintain a skilled workforce.\n\n** **\n\n●**Macroeconomic\nConditions.** Global economic factors, including oil prices and trade patterns, can\naffect the marine and offshore industries and, consequently, demand for our services. We\ncontinuously monitor these factors to anticipate changes in demand.\n\n \n\n●**Technological\nAdvancement.**Advances in corrosion prevention technologies, coatings, and surface\npreparation methods may create new opportunities for service providers who stay current with\nindustry developments.\n\n \n\n**5.E. Critical\nAccounting Estimates**\n\n** **\n\nThe\npreparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and\nassumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of\nthe financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates\nthat are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.\nThe result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported\namount of expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with\ncertainty, actual results could differ from our assumptions and estimates, and such difference could be material. Our significant accounting\npolicies are discussed in Note 2, “Summary of Significant Accounting Policies” to our consolidated financial statements and\nrelated notes included elsewhere in this annual report. We believe the following accounting policies involve the most significant judgments\nand estimates used in the preparation of our financial statements.\n\n* *\n\n**Revenue\nRecognition**\n\n* *\n\nWe\naccount for our revenue under ASC Topic 606, Revenue from Contracts with Customers. The five-step model defined by ASC Topic 606 requires\nthe Company to:\n\n \n\n \n1.\nIdentify the contract(s)\nwith a client;\n\n \n \n \n\n \n2.\nIdentify the performance\nobligations in the contract;\n\n \n \n \n\n \n3.\nDetermine the transaction\nprice;\n\n \n \n \n\n \n4.\nAllocate the transaction\nprice to the performance obligations in the contract; and\n\n \n \n \n\n \n5.\nRecognize revenue when\n(or as) the entity satisfies a performance obligation.\n\n \n\n53\n\n \n\n \n\nWe\nprovide corrosion prevention services, comprising blasting and painting services. Revenue from corrosion prevention services is recognized\nover time based on the stage of completion or to the extent of contract costs incurred where it is probable that those costs will be\nrecoverable.\n\n \n\nWe\nalso provide manpower supply services to customers, including the provision of skilled labor, typically on a time-based (hourly) billing\nstructure. Revenue is recognized over time as the services are rendered, as the customer simultaneously receives and consumes the benefits\nof the Company’s performance.\n\n \n\n**Allowance\nfor expected credit loss on accounts receivable**\n\n* *\n\nWe\ndetermine the adequacy of allowances for expected credit loss on accounts receivable based on individual account analysis and historical\ncollection trends. We establish a provision for expected credit losses when there is objective evidence that we may not be able to collect\namounts due. The allowance for expected credit loss is based on management’s best estimate of specific losses on individual exposures,\nas well as a provision on historical trends of collections. Actual amounts received may differ from management’s estimate of creditworthiness\nand the economic environment. Delinquent account balances are written-off against the allowance for expected credit loss after management\nhas determined that the likelihood of collection is not probable.\n\n \n\nAs\nof December 31, 2025 and 2024, we did not record any allowance for expected credit losses for accounts receivable.\n\n \n\n**Recent\nAccounting Pronouncements**\n\n* *\n\nSee\nthe discussion of the recent accounting pronouncements contained in Note 2 to the consolidated financial statements, “Summary of\nSignificant Accounting Policies” included elsewhere in this annual report."}