{"url_path":"/sec/rct/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2027360/0001493152-26-023944-index.html","accession_number":"0001493152-26-023944","cik":"0002027360","ticker":"RCT","issuer_name":"RedCloud Holdings plc","edgar_url":"https://www.sec.gov/Archives/edgar/data/2027360/0001493152-26-023944-index.html","primary_entity_key":"0002027360","primary_entity_name":"RedCloud Holdings plc"},"word_count":12311,"has_tables":true,"body_markdown":"** **\n\n**ITEM\n4. INFORMATION ON THE COMPANY**\n\n \n\n**A.\nHistory and Development of the Company**\n\n \n\nOur\ncorporate name is RedCloud Holdings plc. We are a public limited company organized under the laws of England and Wales and incorporated\non April 15, 2024 under registered number 15647424.\n\n \n\nOn\nOctober 11, 2024, we undertook a formation transaction pursuant to which all existing security holders of RedCloud Technologies Limited,\na private limited company incorporated in England and Wales, exchanged the securities they held in RedCloud Technologies Limited for\nan equivalent class and number of securities in RedCloud Holdings plc. In this annual report, we refer to this transaction as the “Formation\nTransaction.” Prior to the Formation Transaction, our business was operated through RedCloud Technologies Limited. In connection\nwith the initial public offering (the “IPO”) and as part of the Formation Transaction, RedCloud Technologies Limited and\nits subsidiaries (the “RedCloud Group”) undertook the reorganization of its corporate structure, that resulted in the Company\nbecoming the ultimate holding company of the RedCloud Group, and RedCloud Technologies Limited becoming the Company’s direct subsidiary.\nThe purpose of the Formation Transaction was to insert a new public limited company as the holding company of the RedCloud Group so that\nwe were able to offer shares to the general public. Accordingly, our business is now operated through the following corporate structure:\n\n \n\n \n\nOur\nprincipal executive office is located at 50 Liverpool Street, London, EC2M 7PY, United Kingdom, and our phone number is +44 (0) 207 754\n3735. Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, DE 19711.\n\n \n\nAs\nan England and Wales public limited company, we are organized pursuant to and subject to the provisions of The Companies Act 2006 and\nthe regulations promulgated thereunder (collectively the “The Companies Act”).\n\n \n\nFor\na description of our principal capital expenditures and divestitures for the two years ended December 31, 2025 and for those currently\nin progress, see Item 5. “Operating and Financial Review and Prospects.”\n\n \n\n**Our\nStatus as a Foreign Private Issuer under the Exchange Act**\n\n \n\nWe\nare a “foreign private issuer” under SEC rules. Consequently, for so long as we continue to meet such qualification, we will\nbe subject to the reporting requirements under the Exchange Act applicable to foreign private issuers. We are required to file our annual\nreport for each year with the SEC by April 30 of the following year. In addition, we will furnish reports on Form 6-K to the SEC regarding\ncertain information that is distributed or required to be distributed by us to our shareholders.\n\n \n\nBased\non such foreign private issuer status, under existing rules and regulations, we are not required to file periodic reports and financial\nstatements with the SEC as frequently or as promptly as a U.S. company whose securities are registered under the Exchange Act. We also\nare not required to comply with Regulation FD, which addresses certain restrictions on the selective disclosure of material information.\nAs of March 18, 2026, our directors and executive officers, but not 10% shareholders, are required to file ownership reports pursuant\nto Section 16(a) of the Exchange Act, but our directors, executive officers and 10% shareholders are not subject to “short-swing”\nprofit recovery provisions of Section 16(b) of the Exchange Act with respect to their purchases and sales of our securities.\n\n \n\n17\n\n \n\n \n\nDue\nto our exemption having a foreign private issuer status, we nevertheless currently expect to issue interim half yearly financial information\npublicly and to furnish it to the SEC on Form 6-K.\n\n \n\nThe\nSEC has issued a concept release relating to potential changes in the definition of foreign private issuer which could make it more difficult\nfor a foreign company to be able to meet the definition of foreign private issuer. Depending on the nature of any change which the SEC\nadopts in the definition, we may cease to meet the definition of foreign private issuer, which could both increase our costs and make\nit more difficult for us to raise capital. Further, if we are no longer a foreign private issuer, we will not be able to take advantage\nof the home company exemption from certain Nasdaq corporate governance regulations and our directors, executive officers and 10% shareholders\nwill be subject to the short-swing profit recovery provisions of Section 16(b) of the Exchange Act. See Item “16G. Corporate Governance”\nfor information as the Nasdaq rules for which we use the home country exception to the Nasdaq rules.\n\n \n\n**Our\nStatus as an Emerging Growth Company**\n\n \n\nWe\nare an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,\nwe will be eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies\nthat are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation\nrequirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in their periodic\nreports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and\nshareholder approval of any golden parachute payments not previously approved.. As long as we remain an emerging growth company we will\nbe exempt from the auditor attestation requirement. If some investors find our securities less attractive as a result, there may be a\nless active trading market for our securities and the prices of our securities may be more volatile.\n\n \n\nFurther,\nSection 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting\nstandards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do\nnot have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting\nstandards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements\nthat apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended\ntransition period, which means that when a standard is issued or revised and it has different application dates for public or private\ncompanies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised\nstandard. This may make comparison of our financial statements with certain other public companies difficult or impossible because of\nthe potential differences in accounting standards used.\n\n \n\nWe\nwill remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary\nof the closing of our IPO, (b) in which our total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be\na large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as\nof the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00\nbillion in non-convertible debt securities during the prior three-year period. References to “emerging growth company” in\nthis proxy statement/annual report have the meaning associated with that term in the JOBS Act.\n\n \n\n**Functional\nand Reporting Currency**\n\n \n\nThe\nfunctional currency of RedCloud Holdings plc is the Great British Pound, however, as a foreign private issuer with the SEC, we have elected\nto report in US dollars as permitted by SEC Regulation S-X 210.3. Our management believes that the U.S. dollar is the currency of the\nprimary economic environment in which we operate. Thus, our functional and reporting currency is the U.S. dollar. All the Company’s\nforeign operations have determined the local currency to be their functional currency, except for Argentina, which is discussed in more\ndetail below. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from\ntheir local currencies into US dollars by using year-end exchange rates while income and expense accounts are translated at the average\nmonthly rates in effect during the year, unless exchange rates fluctuate significantly during the period, in which case the exchange\nrates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive\nincome (loss). Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings in the\nconsolidated statements of operations as foreign currency loss (gain).\n\n \n\nThe\nCompany reports its Argentine operations as highly inflationary status in accordance with US GAAP for the years ended December 31,\n2025 and 2024, and changed the functional currency for its Argentine subsidiary from Argentine Pesos to the United States\nDollar, which is the appropriate functional currency of the entity based on the highly inflationary status. Transactions are then\nconverted to the US Dollar using Argentina’s official exchange rate.\n\n \n\n18\n\n \n\n** **\n\n**Where\nto Get Additional Information**\n\n \n\nThe\nSEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that\nfile electronically with the SEC. We are subject to the information requirements of the Exchange Act and will file annual and other reports,\nincluding this annual report, and other information with the SEC. You can read our SEC filings, over the Internet at the SEC’s\nwebsite at www.sec.gov. These documents, and other information concerning us, is available on our website at https://redcloudtechnology.com.\nInformation contained on, or that can be accessed through, our website or any other website is expressly not incorporated by reference\ninto and is not a part of this annual report.\n\n \n\n**B.\nBusiness Overview**\n\n \n\nWe\nhave developed and operate the RedAI infrastructure and associated products, facilitating the trading of everyday consumer supplies\nof FMCG products across business supply chains in Nigeria, South Africa, Argentina, Brazil and through joint ventures in\nTürkiye and Saudi Arabia. We believe RedAI solves a longstanding structural inefficiency in how key purchase and sales data is\nshared between manufacturer brands, distributors and retailers in high-growth consumer markets. For the year ended December 31,\n2025, we generated revenue of approximately $48.5 million, a 4.4% increase year-on-year, with TTV growing 31% to $3.2 billion, served\nacross a network of over 1,017 active distributors and 68,089 active retailers.\n\n \n\nThrough\nthe facilitation of that trade, we collect, cleanse and aggregate transactional and behavioural data at scale. Cumulative trades across RedAI reached $6.9 billion between January 2023 and December\n2025, creating a proprietary data foundation that delivers market-level insights beyond what individual company datasets or publicly\navailable data can provide. We believe this asset—built through every order placed, every product listed and every buying decision\nmade across our network—represents a structural and growing competitive advantage that becomes more powerful as transaction volumes\nincrease.\n\n \n\nIt\nis this data foundation that now underpins our AI-focused product strategy. We have directed increasing research and development (“R&D”)\nand product investment toward user applications and agentic AI, monetising the dataset through AI-powered recommendations and predictions\nthat support FMCG and supply chain professionals in planning, operations and sales. This includes the development of specialist AI agents—covering optimum inventory levels, economic order\nquantities (“EOQ”) and product mix presented to downstream customers. We believe this positions RedAI to move beyond the\nfacilitation of trade and towards becoming the decision intelligence layer across global FMCG supply chains, where more trade is then\nexecuted on our networks.\n\n \n\nThe\nRedAI infrastructure has to date been sold on a consumption-based model, with transaction-based revenue charged to brands and distributors.\nAs we transition to a more intelligence-driven product portfolio, we expect to monetise decision intelligence through a combination of\nsubscription revenue and transactional revenue generated when trading decisions are executed across our network. The Platform enables\nstructured data exchange across the FMCG value chain, allowing participants to move away from fragmented and manual procurement processes\ntoward a more data driven and coordinated trading environment. By consolidating transactional and behavioural data across retailers,\ndistributors, and brands, RedAI improves the transparency and efficiency of B2B purchasing and supply chain decision-making.\n\n \n\nRetailers\nusing the Platform are able to access AI-driven recommendations that assist with inventory planning and procurement decisions across\nlarge and complex product catalogues. These insights are generated through the analysis of historical and real-time purchasing behaviour,\nenabling faster identification of relevant products and suppliers.\n\n \n\nAdditionally,\nour Platform has AI and machine learning capabilities that provide our brands, distributors and retailers with trading and product insights\nand data to help them make better commercial decisions regarding their business operations. For example, our Platform has the capability\nto (1) inform retailers when they are running low on products, (2) inform distributors what other retailers in the area in which they\noperate are selling, and (3) inform brands and distributors the type of goods and products retailers are looking for on the Platform.\nWe currently operate in Argentina, Brazil, Nigeria, and South Africa which are high consumer growth markets and plan to expand to additional\ncountries in the future.\n\n \n\nThe\nPlatform also enhances demand side visibility for brands and distributors by identifying purchasing trends and product requirements across\nspecific retail networks and geographies. This enables suppliers to better understand localised demand signals and to engage more efficiently\nwith relevant retail partners, improving route-to-market effectiveness.\n\n \n\n**Our\nMission**\n\n \n\nThe\nglobal FMCG industry represents $14.6 trillion in annual trade, yet we believe an estimated $2 trillion of that value is lost to preventable\ninventory inefficiency — chronic overstocking and understocking caused by fragmentation and a near-total absence of shared data\nacross supply chains. Brands, distributors and retailers operate in commercial isolation, making consequential buying and selling decisions\nwithout visibility into the demand signals and supply dynamics that surround them.\n\n \n\n19\n\n \n\n \n\nThis\nstructural inefficiency has persisted for decades. What has changed is the technology available to address it. The emergence and rapid\nmaturation of generative and agentic AI has created, for the first time, the means to collect, interpret and act on trading data at the\nscale and speed that FMCG supply chains require — yet the industry’s core infrastructure has not kept pace.\n\n \n\nRedCloud’s\nmission is to build the intelligent infrastructure of global trade: generating and aggregating proprietary transactional and market data\nfrom across the FMCG industry through RedAI, and converting that data into the decisions, predictions and autonomous trading actions\nthat enable brands, distributors and retailers to compete and grow in real time.\n\n \n\n**The\nRedAI Infrastructure**\n\n \n\nRedAI\nis an intelligent infrastructure and associated products that provides FMCG manufacturers, distributors and retailers with a faster,\nmore intuitive way to trade effectively with each other to ensure the right products reach shelves, in appropriate quantities and at\nthe right time. Before 2025, data collection and transactional volume was centered around the Red101 retailer app and B2B marketplace\ntechnology, increasingly delivering insights and recommendations to customers via RedInsights dashboards and reports. Since 2025, we\nhave increased our commercial focus on aggregation and monetization of the proprietary data through RedAI as a unique selling proposition\nin the market, such that customers value RedAI for both predictive and decision intelligence and access to our trading networks to streamline\ntheir operations. Simultaneously the dramatic impact of generative AI and its increasing transformation of software development has provided\nan opportunity to reimagine the RedAI user experience and development roadmap through AI native infrastructure, AI agents, Model Context\nProtocol (“MCP”) integrations and a more flexible infrastructure to suit the needs of enterprise customers. This has enabled\nthe Company to begin commercializing its RedAI infrastructure through enterprise licensing and joint venture deployment structures in\nselected international markets, including Saudi Arabia and Türkiye. These arrangements are intended to enable regional deployment\nof the Company’s AI-enabled trade infrastructure while leveraging local operating expertise, distribution relationships and infrastructure\nrequirements.\n\n \n\nWe\ncurrently operate our Platform in what we consider the high growth consumer markets of Argentina, Brazil, Nigeria, and South Africa.\nAs of December 31, 2025, we had approximately 996 sellers (distributors, wholesalers and brands), representing 7,910 brands, over 210,000\nproducts listed and 65,512 retailers on our Platform. To date, we have generated our revenue from applying a transaction-based revenue\non the TTV of each transaction conducted on our Platform. All revenue we receive is from the brand or distributors. Retailers on the\nPlatform do not pay any fees on the transactions to which they are a party. The transaction-based revenue ranges from 1% to 5% of the\nTTV. For the year ended December 31, 2025, the average transaction-based revenue equated to approximately 1.5% of the TTV. For the year\nended December 31, 2025, we had processed approximately 827,323 orders with approximately $3.2 billion in TTV. Furthermore, the decline\nin our Argentinian market reflects our strategic decision to reallocate capital to higher return opportunities, including our JV licensing\nmodel while the operations remain active in the country. As of January 2026, we began deploying RedAI ‘packages’ for mid-market\ndistributors that attract a subscription fee in addition to transactional revenue, recognizing the value of our intelligence and forward\noperating officers in the field. In addition, our joint ventures are paying an annual fee to license the RedAI infrastructure into their\nmarkets.\n\n \n\n*Technological\nCapabilities*\n\n \n\n**RedAI\nInfrastructure and Associated Product Today**\n\n \n\nThe\nCompany currently operates the following sub-branded propositions, powered by RedAI data and intelligence:\n\n \n\n \n●\n**RedAI\n–**the data foundation, machine learning and intelligence capabilities presented to users. Other product brands are ‘powered\nby’ RedAI.\n\n \n●\n**Red101**\n— the Company’s retailer-facing ordering and re-order app, enabling account holders to place and pay for orders directly.\n\n \n●\n**RedInsights**\n— dashboards and reporting tools delivering data-driven insights and recommendations to distributor and brand customers.\n\n \n●\n**TradeX**\n— a bulk trading programme facilitating large-volume B2B transactions between distributors and retailers.\n\n \n\nTogether\nthese components formed an integrated trading platform, generating revenue primarily through transaction-based fees applied to the\nTTV of orders conducted across RedAI.\n\n \n\n**RedAI Roadmap**\n\n \n\nThe\nCompany is in late development of a significant evolution of RedAI, which is expected to undergo a phased launch to enterprise\ncustomers first, beginning in H2 2026. The upcoming RedAI releases retain and enhance the functionality of the legacy\ncomponents while introducing a new layered architecture comprising three principal components: a business application layer with\ninitial intelligence features, powered by recently announced RAID (Realtime AI for Distribution) engine.\n\n \n\nThe\nbusiness application layer is expected to dedicated functional environments across three domains, each enabling Decision\nIntelligence — AI-generated recommendations and insights delivered within role-based application modules:\n\n \n\n \n●\n**RedAI\nStrategy** — commercial intelligence across market share, product information, and retailer coverage\n\n \n●\n**RedAI\nOperations** — inventory optimisation, stockout prevention, and automated replenishment\n\n \n●\n**RedAI\nSales** — route optimisation, upsell recommendations, and autonomous order execution support\n\n \n\n20\n\n \n\n \n\nOther\nproduct elements already announced for future release include:\n\n \n\n**RAID\n(Realtime AI for Distribution**) was announced for launch H2 in initially contains a two-tier, learning-to-rank system, designed to\ndeliver highly relevant product recommendations at scale across distributor networks. Trained on 3.7 million completed trade transactions,\nRAID has achieved accuracy levels (NDCG) that are significantly above the >80% threshold generally considered commercially impactful\nfor ranking systems in an R&D validation. Unlike consumer recommendation engines that infer intent from behavioural signals, RAID.\nis trained on executed trade. RAID is designed to be exposed at the application layer to drive decisions. By embedding intelligence directly\nat the point of transaction, RedAI enables distributors and retailers to act on predicted outcomes, increasing average order value, improving\nrepeat rates and optimising inventory flow in near-live trading environments. This represents a shift from backward-looking analysis\nto forward-looking execution.\n\n \n\n**Specialist\nAI Agents:**\n\n \n\n●**RedAI\nInventory Agent (Distribution):** expected to support inventory managers to reduce both\nstockouts and excess inventory by continuously monitoring inventory levels versus predicted\nmarket demand signals to recommend optimal reorder quantities and timing. By dynamically\nbalancing economic order quantity against actual market demand, the agent’s predictive\nrecommendations are designed to streamline trade while improving working capital efficiency\nand service levels across the supply chain.\n\n●**RedAI\nSales Agent (Distribution):** expected to support sales teams to maximise inventory sell-out\nperformance by identifying high-propensity buyers, recommending pricing strategies and ‘best-sold\nwith’ product bundles. Improves performance of each salesperson by automating research\nsteps to reducing effort on low-propensity customers, while increasing sales order value.\n\n●**RedAI\nMarket Planning Agent (FMCG):** provide FMCG brand managers with granular visibility of\nmarket performance of branded product at category and SKU level, including competitive activity,\nchannel dynamics, and localized growth opportunities. By surfacing actionable intelligence\nfrom across RedCloud’s trade data network, and providing recommendations for action,\nthe agent is expected to directly support the growth of market share and competitive advantage.\n\n \n\nThe\nCompany expects to make additional product announcements in due course about other planned elements of the RedAI infrastructure and expects\nto invest in a proactive roadmap of new products and features and improvements in due course.\n\n \n\n**Our\nMarket Opportunity**\n\n \n\nThe\nFMCG market is currently valued at over $14.6 trillion globally and growing at around 5% CAGR. FMCG products are the largest group\nof consumer products spread across various categories and represent those required in everyday life ranging from foods and\nbeverages, non-prescription medicines and office supplies. In our operating markets of Nigeria, South Africa, Brazil, Argentina, and\nplanned future markets of operation of Türkiye and Saudi Arabia, the FMCG market is collectively valued at over $1.2 trillion\n(2025 estimates, Cognitive Research). Additionally, according to Euromonitor, market weight and share of growth are increasingly\nmoving to emerging markets, which include the countries we currently operate in. Emerging markets are expected to account for 47% to\n75% of the sales growth (across verticals) in FMCG goods.\n\n \n\nRevenue\nbreakdown for the years ended December 31, 2025 and December 31, 2024 is as follows:\n\n \n\n**(U.S. dollars)** \n   \n   \n   \n   \n   \n  \n\n \nNigeria  \nArgentina  \nSouth Africa  \nBrazil  \nPeru  \nTotal \n\n2025 \n$38,541,234  \n$98,834  \n$9,734,927  \n$103,218  \n$61,140  \n$48,539,353 \n\n2024 \n$22,962,513  \n$18,820,235  \n$4,070,887  \n$620,712  \n$24,938  \n$46,499,285 \n\n \n\nFor\na further description of the principal services and products the Company provides, including a breakdown of the Company’s revenues\nby geographic market, see “Item 5. Operating and Financial Review and Prospects” and “Notes to the Consolidated Financial\nStatements – Note 10 – Reportable Segments,” included in “Item 18. Financial Statements.”\n\n \n\nThe\nmajority of B2B FMCG trade within our operating markets occurs offline or over WhatAapp and email, relying on what we believe to be\nguesswork and ‘recency bias,’ where trades are based on previous purchases rather than anticipating changing demand or\nopportunity in the market. Globally, in emerging markets, distributors cater to around 500 million micro, and medium sized\nretailers. These businesses face immense costs, with an estimated three out of four FMCG product launches ending in failure, an\nannual inventory shortfall exceeding $2 trillion and escalating expenses in bringing FMCG products to market. The physical\navailability of products presents a trillion-dollar opportunity; having the right product at the right price at the point of\npurchase is crucial for the success of future commerce. We believe that our RedAI infrastructure, and the aggregated data and\nintelligence within it, can be useful across the supply chain to address the inventory gap, while enabling our customers to drive\ntheir own growth through increased competitiveness and efficiency.\n\n \n\n**Seasonality**\n\n \n\nHistorically\nour business has not experienced material seasonal fluctuations in net revenue. However, we do observe moderately higher seasonal demand\nduring the months of November and December due in part to holiday shopping, and a moderate reduction in demand in January. This seasonality\nalso varies by country, as factors such as cultural festivals and climates impact everyday FMCG consumption across specific categories.\n\n \n\n**Our\nGrowth Strategy**\n\n \n\nOur\nstrategy is to enable the development of strong brand recognition, data engagement, and distribution at scale through an infrastructure-led, license-based\neconomic model that competes against traditional B2B marketplaces. We approach markets with a proactive method for engaging distributors\nand retailers, aiming to rapidly gather essential data on key product information, inventory, and purchasing cycles. This data is instrumental\nin assisting distributors to optimize their market routes effectively. This data allows us to continually provide superior discovery,\nsearch, and trading and expand key FMCG products and services.\n\n \n\n21\n\n \n\n \n\nThe\nkey elements of our strategy to grow our business include:\n\n \n\n*Increase\nActive Retailers and Trading Share*\n\n \n\nAs\nof December 31, 2025, we had approximately 65,512 retailers and 996 sellers (distributors, wholesalers and brands) active on our Platform.\nMoving forward, we are committed to enhancing and promoting the value proposition of our Platform. Our focus lies on attracting new retailers\nwhile also expanding their buying frequency and product categories. This growth strategy will be driven by customer loyalty programs,\ntop-tier customer service, targeted marketing initiatives, promotional campaigns, and the continuous expansion of our marketing affiliates.\nAdditionally, we will encourage the use of our diverse range of mobile commerce apps.\n\n \n\n*Expand\nProducts and Brands*\n\n \n\nWe\nbelieve that the growth in both the number of product categories and brands purchased within each category will contribute to higher\naverage spending per customer, ultimately driving trading volume upwards. As of December 31, 2025, our Platform featured over 42,572\nproducts from 7,910 brands. Our primary objective is to elevate the retailer shopping experience, boost retailer engagement, and create\nnew avenues for retailers by expanding and highlighting additional products and brands.\n\n \n\n*Enhance\nthe Success of Retailers on a Broad Basis*\n\n \n\nOur\ngoal is to enhance the success of a diverse range of retailers on our Platform by amplifying their visibility to pertinent buyer demand\nand equipping them with enhanced tools, such as data science applications, to foster personalized buyer interactions. Leveraging advanced\ndata science and analytics to develop our own AI capabilities, we will assist distributors in pinpointing products and enhancing the\nconversion rate from visitor engagements to completed transactions.\n\n \n\n*Generate\nData and Cloud Computing Technologies*\n\n \n\nWe\nbelieve that the data generated within our Platform holds substantial value for our customers and various ecosystem participants. Our\nongoing strategy involves the strategic application of data intelligence and deep learning technologies across multiple areas such as\nPlatform design, user interface optimization, search functionalities, targeted marketing initiatives, logistics efficiency, location-based\nservices, and financial services enhancements. This data can be used in numerous ways, including but not limited to creating new product\nofferings and monetization channels with commercial partners that improve access to finance, enhance cash-flow or increase product turnover\nfor our customers.\n\n \n\nWe\nforesee AI evolving into a fundamental element of e-commerce infrastructure. Over the past five years, we have dedicated significant\nresources to developing our proprietary cloud infrastructure, not only to bolster our own operations but also to support the endeavors\nof third parties, including our valued brands and distributors. Moving forward, we remain committed to substantial investments in our\nRedAI infrastructure and products to fortify both our internal operations and those of our partners. We have a dedicated R&D data\nteam focusing on innovation in deep learning and machine learning technologies with the primary aim of increasing transaction size and\nenhancing customer retention. This innovation combined with data gathered through our Platform can be used to create reports on market\nintelligence and trends around regional consumption, demand and inventory flows. We believe these reports can be commercialized and are\nvaluable to retailers, distributors, brands and other trade bodies.\n\n \n\n*Sales\nand Partnerships*\n\n \n\nWe\ncurrently have sales teams located in Nigeria, South Africa, Brazil and Argentina. We are particularly focused on new partnerships with leading FMCG companies as we believe this can cause\nsubstantial growth by also attracting their retailers throughout the jurisdictions in which we operate.\n\n \n\nThe\nCompany also intends to selectively pursue expansion opportunities through joint venture and infrastructure licensing structures with\nregional partners, including recently initiated arrangements in Saudi Arabia and Türkiye, which the Company believes may provide\na more capital efficient framework for international deployment of its RedAI infrastructure and enterprise trade technologies.\n\n \n\n*Licensing*\n\n* *\n\nAs\npart of our growth strategy, we have entered into two license agreements, one covering Saudi Arabia and one covering Türkiye, which\nare intended to support the expansion of our infrastructure-led, license-based economic model into key international markets. Through\nthese arrangements, we plan to enable the development of strong brand recognition, scaled distribution, and enhanced data engagement\nwhile competing against traditional B2B marketplaces. Our approach focuses on proactively engaging distributors and retailers to rapidly\ncollect and analyze critical market data, including product information, inventory trends, and purchasing cycles, which we believe will\nhelp distributors optimize their market routes and improve trading efficiency. We expect to launch operations under these license agreements\nduring 2026 and believe we will begin to generate revenue from these markets in 2026.\n\n \n\n**Marketing\nand Advertising**\n\n \n\nTo\ngrow our business, we need to increase user participation and activity on our Platform. Our approach to meet this goal includes product\nmarketing, growth and digital marketing initiatives, brand and content and targeted lead generation, including but not limited to, messages\nand promotional campaigns, automated and distributed through our channels including SMS, E-mail, WhatsApp, Notifications,\nIn-app banners, promotional categories and events.\n\n \n\n22\n\n \n\n \n\nOnce\nbrands, distributors and retailers became users of RedAI and Red101, we drive further user acquisition, engagement,\nand retention, and to cultivate a dynamic ecosystem that appeals to brands, distributors and retailers alike. Specifically, we use our\ntransactional data, customer profiles, and interaction insights to uncover purchasing trends and preferences. These insights are then\nused for our check-out voucher program, which is designed to incentivize customers at the point-of-sale by offering vouchers that can\nbe applied to future purchases. This program serves three primary purposes: (1) encouraging customer acquisition & retention, (2)\nincreasing Average Transaction Value and (3) enhancing our data source. To date, the program has demonstrated measurable success. Our\ncustomer retention rate has decreased by 2% in the fiscal year 2025, to 77%, compared to 2024. The Average Transaction Value decreased\nby approximately 37% in the fiscal year 2025 to $3,915, compared to $6,182 in the fiscal year 2024. This decrease was a direct and anticipated\nresult of our deliberate strategic expansion into Nigeria’s open market retail segment. Over the same period, the number of active\nretailers on the Platform increased by 94%, reflecting a substantial shift in the composition of our retail network toward a larger base\nof smaller-format retailers whose individual purchasing capacity is structurally lower than that of wholesalers and larger retail partners.\nThis expansion is consistent with our strategic focus on the distributor-to-retailer leg of the FMCG supply chain, where secondary sales\nactivity has historically not been captured by brand owners\n\n** **\n\n**Competition**\n\n \n\nDelivery\nof intelligent trading infrastructure within B2B commerce and supply chains is new, rapidly evolving and competitive. We are\ncurrently, and will continue to, compete with technology vendors including\nSAP, Oracle, Infor, and other smaller DMS vendors and suppliers.\n\n \n\nThough these competitors are not currently primarily focusing on the markets and territories in which we operate, if these markets\nare developed or their potential is exposed on a greater scale, larger competitors may increase their focus on our markets over\ntime, which could increase competitive pressure. Our competitors may also be able to develop competing platforms and/or\ninfrastructure with broader capabilities, greater resources, or stronger market penetration.\n\n \n\n**Our\nCompetitive Strengths**\n\n \n\n*Experienced\nManagement Team*\n\n \n\nOur\nChief Executive Officer and Co-founder, Justin Floyd, has a 30-year track record of founding and scaling technology companies in what\nhe considers underserved industries. He is a pioneer in the open commerce movement which seeks to bring trust to today’s global\nB2B supply chains. Additionally, the rest of our senior management have experience in technology and finance, having previously worked\nat Orange Money, Microsoft, Vodafone, and Deutsche Bank.\n\n \n\n*Trusted\nPartner in Our Jurisdictions of Operation*\n\n \n\nAs\nof December 31, 2025, we had approximately 996 national, regional, and local distributors, wholesalers and brands that collectively represent\nmore than 7,910 brands transacted on RedAI. We believe this represents the broadest selection of FMCG products through a single platform\nin the markets we operate and provides a competitive edge over international giants like Alibaba by fostering local trade and business\necosystems. This focus on regional transactions translates to a smaller carbon footprint due to reduced reliance on lengthy global supply\nchains. We also believe this strengthens the resilience of local economies by promoting internal trade networks and lessening dependence\non outside sources.\n\n \n\nBased\non our experience, we believe the jurisdictions in which we operate have issues with fraud and retailers are skeptical of purchasing\nproducts online due to fear of fraud. RedAI has been built and developed specifically for markets where brands want to establish\na trusted presence and local supply chain for their inventory to help alleviate this fear. We believe RedAI is recognized in our\njurisdictions of operation as a reliable source for brands and retailers to trade their inventory in a secure environment where products\ncan be tracked efficiently. Additionally, we require all third-party brands and distributors to meet our standards for product authenticity\nand service reliability to provide credibility and appeal for RedAI. Our retailers can then confidently navigate through Red101\nand trust the strength and authenticity of the offered brands, ensuring a superior product selection, convenience, and cost. We believe\nthis provides us with an advantage over larger competitors who do not have the ability to meet these standards.\n\n \n\n*AI\nand Machine Learning Capabilities*\n\n \n\nRedAI’s machine learning algorithms can process millions of data points each day to optimize a range of purchasing behavior\nby retailers, including order build, inventory turn ratios, restock and out of stock, personalization, ads quality, inventory forecasting,\norder fulfillment, delivery mobilization, rebates and payment. We believe our data first approach is a key driver of our customer engagement\nacross the markets in which we operate and provides our brands and distributors with an advantage over other local distributors that\ndo not have these capabilities.\n\n \n\n23\n\n \n\n* *\n\n*Connectivity*\n\n \n\nAs\nopposed to our competitors, like Amazon and Alibaba, that do not allow for parties on their platforms to directly communicate, brands,\ndistributors and retailers can directly connect on RedAI. This allows brands, distributors and retailers several advantages, including\nbut not limited to, the following:\n\n \n\n \n●\nRetailers\ncan source inventory from local brands and distributors directly to expedite the delivery process.\n\n \n \n \n\n \n●\nBrands\nand distributors can obtain higher returns on investment through improved product launches due to having discussions with retailers\nabout what they really need.\n\n \n\n*Scalable\nLogistics Infrastructure*\n\n \n\nWe\nhave invested significantly in our proprietary technology, including a distributed relational database, computing clusters, and personalized\nproduct search engines. This infrastructure supports our high volume of transactions and ensures reliability, scalability, and cost-effectiveness.\nWe believe our scalability allows distributors to offer retailers the best selection, quality, value, and convenience, which helps them\nattract more customers and drives higher engagement. This results in more orders and increased retailer spending compared to the traditional\nmethods previously utilized by our brands and distributors.\n\n \n\n*Third-Party\nEcosystem Business Model*\n\n \n\nOur\nexclusively third-party ecosystem model allows for rapid scaling without the risks of providing such products ourselves, including\nbut not limited to, inventory management, logistical operations and warehouse storage. We believe this approach drives\nprofitability, strong cash flow, and enables us to aggressively invest in our technology, product innovation, and ecosystem\nexpansion instead of having to resources on inventory management, logistical operations and warehouse storage.\n\n \n\n**Intellectual\nProperty**\n\n \n\nOur\nintellectual property consists primarily of proprietary software which operates on our data lake of proprietary trading data, powering\nour AI-native Intelligent infrastructure. We have not obtained any patents on our software, but instead protect it as confidential know-how/trade\nsecrets and/or as unregistered copyrightable software.\n\n \n\nAs\nof the date of this annual report, we own the registered trademarks REDCLOUD and RED 101 which are registered in the United Kingdom and\nthe European Union. We also own several trademark registrations in Argentina for the mark RED 101. We intend to seek trademark protection\nin other countries by registering our trademarks in those countries in which we operate or plan to operate. The below table identifies\nthe current trademark registrations we own for REDCLOUD and RED 101.\n\n \n\n**Mark**\n \n**Country**\n \n**Status**\n \n**Owner**\n \n**Reg.\nDate**\n \n**Reg.\nNo.**\n \n**Classes**\n\nREDCLOUD\n\n(stylized with design)\n \n \nUK\n \n \n \nRegistered\n \n \nRedCloud\nTechnologies Limited\n \n3/4/15\n \n \nUK00003085845\n \n \n \n9\n \n\nREDCLOUD\n \n \nUK\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n3/28/20\n \n \nUK00917082983\n \n \n \n36,\n45\n \n\nREDCLOUD\n \n \nEU\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n3/28/20\n \n \n017082983\n \n \n \n36,\n45\n \n\nRED\n101\n \n \nUK\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n1/26/19\n \n \nUK00917958937\n \n \n \n9,\n35, 36, 42, 45\n \n\nRED\n101\n \n \nEU\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n1/26/19\n \n \n017958937\n \n \n \n9,\n35, 36, 42, 45\n \n\nRED\n101\n \n \nAR\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n5/10/18\n \n \n3024752\n \n \n \n9\n \n\nRED\n101\n \n \nAR\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n5/10/18\n \n \n3145810\n \n \n \n36\n \n\nRED\n101\n \n \nAR\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n2/23/21\n \n \n3145876\n \n \n \n45\n \n\nRED\n101\n \n \nAR\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n2/23/21\n \n \n3145809\n \n \n \n35\n \n\nRED\n101\n \n \nAR\n \n \n \nRegistered\n \n \nRedCloud\nIP Limited\n \n2/23/21\n \n \n3145875\n \n \n \n42\n \n\n \n\nWe\nalso own several domain names that incorporate our trademarks REDCLOUD and RED 101, with our primary domain name being used for our Company’s\nmain website, namely, www.redcloudtechnology.com.\n\n \n\n24\n\n \n\n** **\n\n**Government\nRegulations**\n\n \n\n**Regulatory\nMatters in the Principal Jurisdictions in which We Operate**\n\n \n\nWe\nhave conducted reviews of the regulatory frameworks in the principal jurisdictions in which we operate and believe we follow the\nrelevant regulatory frameworks in such jurisdictions, including Nigeria, Brazil, Argentina and South Africa. Due to the different\nregulations in each jurisdiction, we are required to have a different variation of our infrastructure in each jurisdiction in order\nto comply with the applicable jurisdiction’s laws. The effort needed to comply with each jurisdiction’s legislation\nrequires a substantial amount of time and resources. For example, we have been required to hire local counsel in each of these\njurisdictions to ensure we are in compliance with the laws. This has a material effect on our results of operations due to increase\ncosts related to payments to employees and consultants to adjust RedAI to comply with each jurisdiction’s laws. We also\ncompete against parties in our jurisdictions that do not consummate transactions on the internet and are therefore not required to\nutilize resources to comply with certain of these laws.\n\n \n\n**Nigeria**\n\n \n\nWe\nare subject to applicable laws and regulations that relate directly or indirectly to our operations in Nigeria. These laws, regulations,\nand standards govern issues such as worker classification, labor and employment, anti-discrimination, payments, worker confidentiality\nobligations, product liability, environmental protection, personal injury, text messaging, subscription services, intellectual property,\nconsumer protection and warnings, marketing, taxation, privacy, data security, competition, unionizing and collective action, arbitration\nagreements and class action waiver provisions, terms of service, mobile application and website accessibility, money transmittal, and\nbackground checks. We will be required to comply with all regulations, rules and directives of governmental authorities and agencies\napplicable to our services in Nigeria and to operation of any facility in any jurisdiction which we would conduct activities.\n\n \n\n*The\nCompany and Allied Matters Act (CAMA)*\n\n \n\nThe\nCAMA provides a regulatory framework for how businesses should be carried out within Nigeria and provides for the incorporation, registration,\norganization and management of corporate organizations in Nigeria, including online business such as B2B platforms. All foreign entities\nare required to register their business in Nigeria with the Corporate Affairs Commission.\n\n \n\n*National\nDigital Economy and E-Governance Bill*\n\n \n\nThe\nNational Digital Economy and E-Governance Bill is pending before the National Assembly for consideration. This bill when enacted into\nlaw will cover electronic transactions, e-contract and some aspects of consumer protection. The timeline for passing a bill into law\nin the National Assembly is difficult to predict, as the legislative process can take a considerable amount of time. The duration depends\non several factors, including the complexity of the bill, its economic significance, the extent of debate, and the speed at which both\nchambers of the National Assembly conduct their reviews and deliberations.\n\n \n\n*National\nInformation Technology Development Agency Act (NITDA Act)*\n\n \n\nThe\nNITDA Act established the National Information Technology Development Agency (“NITDA”) as the regulatory body responsible\nfor creating the enabling environment for the development, deployment, adoption and application of information communication technology\nand systems in Nigeria. The functions of NITDA include: (i) the development, standardization, application, monitoring, evaluation and\nregulation of information technology practices, activities and systems in Nigeria; (ii) the development of guidelines for electronic\ngovernance and monitoring the use of electronic data interchange and other forms of electronic communication transactions as an alternative\nto paper-based methods in commerce; (iii) the provision of guidelines to facilitate the development and maintenance of appropriate information\ntechnology systems in Nigeria.\n\n \n\nIn\nline with its mandate, NITDA issued the *Guidelines for Nigerian Content Development in Information and Communication Technology, 2019*(the “Guidelines”). The Guidelines apply to all Federal Ministries, Departments, Agencies, Federal Government-owned companies\n(either fully or partially owned), Federal institutions, private sector organizations, business enterprises and individuals engaged in\nany information and communication technology- related activities or services within Nigeria. The Guidelines specify the various roles\nand obligations of: (i) software development firms; (ii) hardware manufacturers; and (iii) providers of software-enabled products/services.\n\n \n\n*The\nFederal Competition and Consumer Protection Act (FCCPA) 2018*\n\n \n\nThe\nFCCPA aims to: (a) promote and maintain competitive markets in the Nigerian economy; (b) promote economic efficiency; (c) protect and\npromote the interests and welfare of consumers; (d) prohibit restrictive or unfair business practices which prevent, restrict or distort\ncompetition, or constitute an abuse of a dominant position of market power in Nigeria. The FCCPA applies to all undertakings and all\ncommercial activities within, or having effect within Nigeria. In particular, it applies to all commercial activities aimed at making\nprofit and geared towards the satisfaction of any public demand.\n\n \n\n25\n\n \n\n \n\nThe\nFCCPA established the Federal Competition and Consumer Protection Commission (“FCCPC”) to develop and promote fair, efficient,\nand competitive markets in the Nigerian economy and to also facilitate access by all citizens to safe products and secure the protection\nof rights for all consumers in Nigeria. Some of the functions of the FCCPC include:\n\n \n\n \n(a)\nidentifying\nanti-competitive, anti-consumer protection and restrictive practices and making rules and regulations under the FCCPA with regards\nto competition and protection of consumers;\n\n \n(b)\neliminating\nanti-competitive agreements, misleading, unfair, deceptive or unconscionable marketing, trading and business practices;\n\n \n(c)\nprotecting\nconsumer interests;\n\n \n(d)\nensuring\nthat all service providers comply with local and international standards of quality and safe service delivery;\n\n \n(e)\ncausing\nan offending company, firm, trade, association or individual to protect, compensate, provide relief and safeguards to injured consumers;\n\n \n(f)\ncompel\nmanufacturers, suppliers, dealers, importers, wholesalers, retailers, or other undertaking where appropriate to certify that all\nprescribed standards for their goods and services have been met;\n\n \n(g)\nimpose\nsanction on any entity that violates the FCCPA or any regulation issued by the FCCPC.\n\n \n\nThe\nFCCPA also established the Competition and Consumer Protection Tribunal. The Tribunal has the powers to hear appeals from or review any\ndecision of the FCCPC or any sector-specific regulatory authority in a regulated industry in respect of competition and consumer protection\nmatters.\n\n \n\nThe\nFCCPA grants consumers various rights. Among these rights is the requirement that businesses must display the price of goods or services\nwhenever they are offered for sale. Consumers also have a right to receive goods that are fit for purpose, of good quality, and compliant\nwith applicable industry sector regulations.\n\n \n\n*Central\nBank of Nigeria’s Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria 2019*\n\n \n\nThe\nCentral Bank of Nigeria (“CBN”) issued the “Regulation on Electronic Payments and Collections for Public and Private\nSectors in Nigeria 2019” to provide guidelines and standards for electronic payments and collections across various sectors, including\ne-commerce. This Regulation also includes provisions that are relevant for online businesses and e-commerce activities in Nigeria The\nobjective of the Regulation is to guide the end-to-end electronic payment of salaries, pensions and other remittances, suppliers and\nrevenue collections in Nigeria by CBN regulated entities such as payment processors in order to ensure the availability of safe, effective\nand efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple\nelectronic channels.\n\n \n\nUnder\nthe Regulations, specific roles and obligations are imposed on the various stakeholders. All payers are required to: (a) maintain appropriate\naccount with Deposit Money Bank; (b) adopt a CBN approved end-to-end electronic payment platform for all forms of payment and collections;\n(c) provide basic infrastructure for making and receiving electronic payments; (d) bear the cost of electronic payments while ensuring\nthat beneficiaries receive actual amounts due to them.\n\n \n\nSuppliers\nare required to: (a) obtain and provide details of Tax Identification Number to the payers; (b) report all wrongfully received funds\nor excess payments to their financial institution’s customer service desk; and (c) in the event of duplicated/excess payment not\nnoticed but withdrawn by the beneficiary, the beneficiary shall make funds available for refund to the payer in line with the Regulation\non Instant (Inter-Bank) Electronic Funds Transfer Services in Nigeria.\n\n \n\nWhilst\nthe Regulation did not make provisions for payment gateway integration, transaction security, consumer protection, anti-money laundering\nand KYC compliance, cross-border transactions, there are other CBN guidelines and circulars that addresses these areas.\n\n \n\n*AI\nRegulation in Nigeria*\n\n \n\nThere\nis currently no AI-specific regulation in Nigeria. Notwithstanding, the existing legal and regulatory frameworks (such as data protection\nlaws, human right laws, cybersecurity law, copyright and patent laws) may cover some aspects AI development, deployment and application\nin Nigeria. For instance, if we use an AI system that processes personal data of individuals, then we must comply with the requirements\nof the data protection laws.\n\n \n\nThe\nNITDA recently issued a Draft National Artificial Intelligence Strategy to address the challenges and opportunities presented by AI.\nThis policy aims to provide a strategic framework for AI development and deployment in Nigeria. The Draft National Artificial Intelligence\nStrategy seeks to set Nigeria as “*a global leader in harnessing the transformative power of AI through responsible, ethical,\nand inclusive innovation, fostering sustainable development through collaborative efforts*.”\n\n \n\n*Data\nProtection Legislation*\n\n \n\nProcessing\nof personal data is primarily regulated by the Nigerian Data Protection Commission (“NDPC”), a regulatory authority set up\nunder the Nigerian Data Protection Act 2023 (the “NDPA”). In addition to the NDPA, Nigeria’s data protection regime\nis also governed by the Nigeria Data Protection Regulations, 2019 (the “NDPR”), the NDPR Implementation Framework 2020, and\nthe Guidance Notice on the Registration of Data Controllers and Data Processors of Major Importance 2024.\n\n \n\n26\n\n \n\n \n\nThe\nNDPA applies where:\n\n \n\n \na.\nthe\ndata controller or data processor is domiciled in, resident, or operating in Nigeria;\n\n \nb.\nthe\nprocessing of personal data occurs within Nigeria or\n\n \nc.\nthe\ndata controller or the data processor is not domiciled in, resident, or operating in Nigeria but is processing the personal data\nof data subjects in Nigeria.\n\n \n\nThe\nNDPA requires that the data controller must have a lawful basis for every personal data processing activity. We can rely on one of the\nfollowing lawful bases to process personal data: consent, performance of a contract, legitimate interests, vital interests, compliance\nwith legal obligations and performance of a public task. The data protection laws further require every data controller to implement\nappropriate technical and organizational measures to ensure the security of the personal data it processes. Accordingly, each data controller\nshall develop internal data protection policies to guide its data protection practices. The data controller is required to inform the\ndata subjects via a privacy notice of how it handles the personal data of the data subjects.\n\n \n\nThe\nreporting obligations under the data protection laws are:\n\n \n\n \na.\n**Filing\nof Annual Data Protection Audit**: data controllers are required to conduct annual data protection audits if they process the personal\ndata of more than 1,000 data subjects in six months or 2,000 data subjects in twelve months. The data controller is to conduct the\naudit through Data Protection Compliance Organization licensed by the NDPC. The audit report is to be submitted to the NDPC on or\nbefore March 15th of each year.\n\n \n \n \n\n \nb.\n**Data\nBreach Notification:**Where a personal data breach occurs, the data controller is required to inform the NDPC within 72 hours\nof becoming aware of the breach if the breach is likely to result in any risk to the rights and freedoms of the data subjects. The\nnotification should state, where feasible, the nature of the breach, including the categories and approximate number of data subjects\nand personal data records affected. Where the personal data breach is likely to result in high risk to the rights and freedoms of\nthe data subjects, the data controller shall immediately notify the affected data subjects.\n\n \n\nThe\nNDPA requires data controllers of major importance (“DCMIs”) to register with the NDPC. A data controller qualifies as a\nDCMI if it keeps or has access to a filing system (analogue or digital) for processing personal data and it:\n\n \n\n \na.\nprocesses\npersonal data of more than 200 data subjects within a period of six months; or\n\n \nb.\ncarries\nout information and communication technology services on any digital device that has storage capacity and belong to another individual;\nor\n\n \nc.\nprocess\npersonal data as a service provider in any of the following sectors – finance, communications, health, education, insurance,\nexport and import, aviation, tourism, oil and gas, and electric power.\n\n \n\nAs\nsuch, where we keep a filing system for processing personal data and meet at least one of the above requirements, we qualify as a DCMI\nand need to register with the NDPC.\n\n \n\nThe\npenalty for violating the NDPA and NDPR is:\n\n \n\n \na.\nN10,000,000\n(Ten Million Naira) or 2% of the annual gross revenue in the preceding financial year, whichever is higher, in the case of a data\ncontroller who is a DCMI; or\n\n \nb.\nN2,000,000\n(Two Million Naira) or 2% of the annual gross revenue, whichever is higher, in the case of a data controller who is not a DCMI.\n\n \n\n**Brazil**\n\n \n\n*E-Commerce,\nData Protection and Taxes*\n\n \n\nIn\naddition to regulations affecting digital payment schemes, we are also subject to laws relating to Internet activities, e-commerce and\ndata protection, as well as tax laws and other regulations applicable to Brazilian companies generally. Internet activities in Brazil\nare regulated by Brazilian Federal Law No. 12,965/14, as amended, known as the Brazilian Civil Rights Framework for the Internet, which\nembodies a substantial set of rights of Internet users, and obligations relating to Internet service providers. This law exempts intermediary\nplatforms from liability for user-generated content in certain cases. On the other hand, this law provides for penalties (including fines)\nin case of non-compliance.\n\n \n\nThe\nlaws and regulations applicable to the Brazilian digital payments industry and to the offering of financial services are subject to ongoing\ninterpretation and change, and our digital payments business may become subject to regulation by other authorities.\n\n \n\n*Changes\nin tax laws, tax incentives, benefits or differing interpretations of tax laws may adversely affect our results of operations*\n\n \n\nChanges\nin tax laws, regulations, related interpretations and tax accounting standards in Brazil, may result in a higher tax rate on our earnings,\nwhich may reduce our profits and cash flows from operations.\n\n \n\n27\n\n \n\n \n\nThe\nBrazilian government may propose changes to the tax regime applicable to different sectors of the economy, including changes that represent\nan increase in our tax burden and the tax burden of our consumers and suppliers, which can negatively impact our business. These changes\ninclude changes in tax rates, tax base, tax deductibility and, occasionally, the creation of taxes (temporary or non-temporary). If these\nchanges directly or indirectly increase our tax burden, we may have our gross margin reduced, adversely affecting our business and the\nresults of operations.\n\n \n\nOn\nDecember 20, 2023, the Brazilian Congress enacted Constitutional Amendment No. 132, which provided a broad reform of the Brazilian tax\nsystem, with the extinction of a variety of taxes, including social contributions, federal tax on industrialized products, the Municipal\ntax on services and the tax on the circulation of goods and services, for the creation of two new taxes on operations with goods and\nservices.\n\n \n\nWe\nare still unable to quantify the effects of these changes or any other additional reforms, if approved, as certain proposed amendments\nto the Constitution provide for the enactment of regulations regarding these new taxes, which regulations have not been presented yet.\nThese changes may result in impacts for us that cannot be assessed yet. Accordingly, any increase in tax rates in Brazil, the creation\nof new taxes or the recognition of taxes that affect our operations may adversely affect us.\n\n \n\nFurthermore,\nwe are subject to tax laws and regulations that may be interpreted differently by tax authorities and us. The application of indirect\ntaxes, such as sales and use tax, value-added tax, goods and services tax, to businesses like ours is a complex and evolving issue. Significant\njudgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is\nnot clear how existing statutes apply to our business. One or more states or municipalities, the federal government or other countries\nmay seek to challenge the taxation or procedures applied to our transactions imposing the charge of taxes or additional reporting, record-keeping\nor indirect tax collection obligations on businesses like ours. New taxes could also require us to incur substantial costs to capture\ndata and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and\nmonitoring could have a material adverse effect on our business and financial results.\n\n \n\n*Consumer\nProtection Laws*\n\n \n\nWe\nare subject to several laws and regulations designed to protect consumer rights—most importantly, Brazilian Federal Law No. 8,078/90,\nas amended, (Código de Defesa do Consumidor, or the “Consumer Protection Code”), which sets forth the legal principles\nand requirements applicable to consumer relations in Brazil. This law regulates, among other things, commercial practices, product and\nservice liability, strict liability of the supplier of products or services, reversal of the burden of proof to the benefit of consumers\nas the hypo sufficient party, the joint and several liability of all companies within the supply chain, abuse of rights in contractual\nclauses, advertising and information on products and services offered to the public. The Consumer Protection Code further establishes\nthe consumers’ rights to access and modify personal information collected about them and stored in private databases. These consumer\nprotection laws could result in substantial compliance costs.\n\n \n\n*Data\nPrivacy and Protection*\n\n \n\nWith\nregard to the compliance with data protection regulations, besides the Brazilian Federal Constitution, we are subject to the Brazilian\nCivil Rights Framework for the Internet, the Consumer Protection Code, Bank Secrecy Law and the Brazilian Federal Law No. 13.709 of August\n14, 2018, called the Brazilian General Data Protection Law (*Lei Geral de Proteção de Dados*, or the “LGPD”).\nWe are also subject to intellectual property rules, and to tax laws and related obligations such as the rules governing the sharing of\ncustomer information with tax and financial authorities. It is unclear whether the tax and regulatory authorities would seek to obtain\ninformation regarding our customers. Any such request could come into conflict with the data protection rules, which could create risks\nfor our business.\n\n \n\nThe\nBrazilian Civil Rights Framework for the Internet establishes principles, guarantees, rights and duties for the use of the Internet in\nBrazil, including regulation about data privacy for Internet users.\n\n \n\nIn\nSeptember 2020, the LGPD came into effect, except for its administrative sanctions, which became effective on August 1, 2021. The LGPD\nestablishes detailed rules to be observed in the maintenance and processing of personal data and provides, among other measures, rights\nto the data subjects, cases in which the processing of personal data is allowed, obligations and requirements relating to security incidents\ninvolving personal data and the transfer and sharing of personal data.\n\n \n\nThe\nLGPD further establishes penalties for non-compliance with its provisions, ranging from a warning and exclusion of personal data processed\nin an irregular way to fines or the prohibition from processing personal data. The LGPD also authorized the creation of the ANPD, an\nauthority that oversees compliance with the rules on data protection. The ANPD initiated its activities in 2020 and has been acting mainly\nin the regulation of specific provisions of the LGPD, the analysis of communications of security incidents involving personal data, and\nhas initiated administrative sanctioning procedures, as well applied sanctions, mainly against public entities. See *“Risk Factors—Risks\nRelating to Intellectual Property, Privacy and Cybersecurity*—*Unauthorized disclosure of, improper access to, or destruction\nor modification of data through cybersecurity breaches, computer viruses or otherwise, or disruptions to our systems or services, could\nexpose us to liability, protracted and costly litigation and damage our reputation.”*\n\n \n\nAny\nadditional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could harm our business,\nfinancial condition or results of operations.\n\n \n\n28\n\n \n\n* *\n\n*Artificial\nIntelligence Regulation*\n\n \n\nThere\nis currently no specific regulation on artificial intelligence (“AI”) in Brazil. However, some Brazilian laws in force already\nregulate at some extent the development, use, and exploitation of said technology. For example, the processing of personal data through\nAI systems is subject to the LGPD, the use of material protected by copyright by AI systems is covered by Brazilian Law n. 9,610/1998\n(“Copyright Law”), and the civil liability of AI providers is subject to the Brazilian Civil Code or, where applicable, to\nthe Consumer Protection Code.\n\n \n\nAdditionally,\nthe Brazilian National Congress has been discussing Bill of Law 2,338/2023 (the “AI Bill of Law”), which aims to regulate\nthe development and ethic use of AI systems in Brazil. The AI Bill of Law is heavily inspired in the European Union’s AI Act and\nprovides for an approach based on risk.\n\n \n\nIn\nthis regard, the AI Bill of Law sets forth an AI risk classification (prohibiting AI systems deemed as ‘excessively risky’),\ndefines a governance structure for the development and use of AI systems by private or public entities, and provides for the rights of\nindividuals affected by AI systems. It is not possible to say by when the AI Bill of Law will be approved by the Brazilian National Congress\nand converted into a law.\n\n \n\n**Argentina**\n\n \n\n*Consumer\nProtection*\n\n \n\nThe\nArgentine Constitution expressly establishes in Article 42 that consumers and users of goods and services have a right to protection\nof health, safety and economic interests in a consumer relationship. Consumer Protection Law No. 24,240, as amended, regulates several\nissues concerning the protection of consumers and end users in a consumer relationship, in the arrangement and execution of contracts.\n\n \n\nThe\nConsumer Protection Law, and the applicable sections of the Argentine Civil and Commercial Code are intended to regulate the constitutional\nright conferred under the Constitution on the weakest party to the consumer relationship and prevent potential abuses deriving from the\nstronger bargaining position of vendors of goods and services in a market economy where standard form contracts are widespread.\n\n \n\nAs\na result, the Consumer Protection Law and the Argentine Civil and Commercial Code deem void and unenforceable certain contractual provisions\nincluded in consumer contracts entered into with consumers or end users, including those which:\n\n \n\n \n●\ndeprive\nobligations of their nature or limit liability for damages;\n\n \n \n \n\n \n●\nimply\na waiver or restriction of consumer rights and an extension of distributor rights; and\n\n \n \n \n\n \n●\nimpose\nthe shifting of the burden of proof from the consumer to the distributor in order to protect the consumers.\n\n \n\nIn\naddition, the Consumer Protection Law imposes penalties ranging from warnings to the forfeiture of concession rights, privileges, tax\nregimes or special credits to which the sanctioned party may be entitled, including closing down establishments for a term of up to 30\ndays.\n\n \n\nThe\nConsumer Protection Law and the Argentine Civil and Commercial Code define consumers or end users as the individuals or legal entities\nthat acquire or use goods or services, free of charge or for a price for their own final use or benefit or that of their family or social\ngroup. In addition, both laws extend consumer protections to those who acquire or use goods or services, with or without consideration,\nfor their own final use or that of their family or social group. The protection under the laws afforded to consumers and end users encompasses\nthe entire consumer relationship, from the offering of the product or service, to cover more than just those relationships established\nby means of a contract.\n\n \n\nThe\nConsumer Protection Law defines the suppliers of goods and services as those who produce, import, distribute or commercialize goods or\nsupply services to consumers or users.\n\n \n\nThe\nArgentine Civil and Commercial Code defines a consumer agreement as an agreement that is entered into between a consumer or end user\nand an individual or legal entity that acts professionally or occasionally either with a private or public company that manufactures\ngoods or provides services, for the purpose of acquisition, use or enjoyment of goods or services by consumers or users for private,\nfamily or social use.\n\n \n\nThe\nConsumer Protection Law establishes joint and several liability of any producer, manufacturer, importer, distributor, supplier, seller\nand anyone who has placed its trademark on the thing or service for damages caused to consumers derived from a defect or risk inherent\nin the thing or the provision of a service.\n\n \n\nThe\nConsumer Protection Law excludes the services supplied by professionals that require a college degree and registration in officially\nrecognized professional organizations or by a governmental authority. However, this law regulates the advertisements that promote the\nservices of such professionals.\n\n \n\n29\n\n \n\n \n\nThe\nConsumer Protection Law determines that the information contained in the offer addressed to undetermined prospective consumers binds\nthe offeror during the period in which the offer takes place and until its public revocation. Further, it determines that specifications\nincluded in advertisements, announcements, prospectuses, circulars or other media bind the offeror and are considered part of the contract\nentered into by the consumer.\n\n \n\nPursuant\nto Resolution No. 104/2005 issued by the Secretariat of Technical Coordination reporting to the Argentine Ministry of Treasury, Consumer\nProtection Law adopted Resolution No. 21/2004 issued by the Mercosur’s Common Market Group which requires that those who engage\nin commerce over the Internet (E-Business) disclose in a precise and clear manner the characteristics of the products and/or services\noffered and the sale terms. Failure to comply with the terms of the offer is deemed an unjustified denial to sell and gives rise to sanctions.\n\n \n\nOn\nSeptember 17, 2014, the Argentine Congress enacted a revised Consumer Protection Law through Law No. 26,993. This law, known as “Conflict\nResolution in Consumer Relationships System,” provides for the creation of new administrative and judicial procedures for this\nfield of Law. It created a two-instance administrative system: the Preliminary Conciliation Service for Consumer Relationships (*Servicio\nde Conciliación Previa en las Relaciones de Consumo) (“COPREC”)*and *the Consumer Relationship Audit*, and\na number of courts assigned to the resolution of conflicts between consumers and producers of goods and services *(Fuero Judicial Nacional\nde Consumo).*In order to file a claim, the amount claimed may not exceed a fixed amount equivalent to 55 adjustable minimum living\nwages, which are determined by the Ministry of Labor, Employment and Social Security. The claim is required to be filed with the administrative\nagency. If an agreement is not reached between the parties, the claimant may file the claim in court. COPREC is currently in full force\nand effect. However, the court system (Fuero Judicial Nacional de Consumo) is not in force yet. Therefore, any court claim should be\ncurrently filed with the existing applicable courts. A considerable volume of claims filed against us are expected to be settled pursuant\nto the system referred to above, without disregarding the full force and effect of different instances for administrative claims existing\nin the provincial sphere and the City of Buenos Aires, which remain in full force and effect, where potential claims related to this\nmatter could also be filed.\n\n \n\n*Credit\nCard Law*\n\n \n\nLaw\nNo. 25,065, as amended by Law No. 26,010 and Law No. 26,361, governs certain aspects of the business activity known as “credit\ncard system.” Regulations impose minimum contract contents and approval thereof by the Argentine Ministry of Industry, as well\nas limitations on chargeable interest by users and commissions charged by the retail stores subject to the system. The Credit Card Law\napplies both to banking and non-banking cards, such as “Tarjeta Shopping,” issued by Tarshop S.A. Pursuant to Communication\n“A” 5477 issued by the Central Bank, interest rates charged by non-financial entities may not exceed the interest rate published\nby the financial system for unsecured loans to individuals, as reported monthly by the Central Bank by more than 25%.\n\n \n\n**South\nAfrica**\n\n \n\n*The\nProtection of Personal Information Act*\n\n \n\nTo\ngive effect to the constitutional right to privacy, on August 20, 2013, the National Assembly passed the Protection of Personal Information\nBill [B9D of 2009], which is largely based on the European Data Protection Directive, which was replaced by the General Data Protection\nRegulation in May 2018. The Bill was signed into law by the President on November 19, 2013 and was gazetted as an Act on November 26,\n2013.\n\n \n\nThe\nmajority of the provisions of the Protection of Personal Information Act, No. 4 of 2013, as amended (“POPIA”) (including\nthe Processing Conditions) commenced on July 1, 2020 and responsible parties have had to comply with these provisions since July 1, 2021.\n\n \n\nPOPIA\napplies to the automated or non-automated processing of personal information entered into a record in any form (provided that when the\nrecorded personal information is processed by non-automated means, it forms part of a filing system or is intended to form part thereof)\nby or for a responsible party who or which is domiciled in South Africa, or not domiciled in South Africa, unless the processing relates\nonly to the forwarding of personal information through South Africa.\n\n \n\n“Personal\ninformation” is widely defined in POPIA and means information relating to an identifiable, living, natural person, and (where applicable)\nan identifiable, existing juristic person, including the name, race, gender, marital status, address and identifying number of a person,\nsymbol, e-mail address, physical address, telephone number, location information, online identifier or other particular assignment to\nthe person.\n\n \n\nPOPIA\napplies to both public and private bodies who process personal information, but excluded from its application is, among other things,\nthe processing of personal information (among other things) that has been de-identified to the extent that it cannot be re-identified\nagain.\n\n \n\nPOPIA\nplaces compliance obligations on “responsible parties”. A responsible party (i.e. a public or private body or any other person\nwhich, alone or in conjunction with others, determines the purpose of and means for processing personal information) is, among other\nthings, obliged to comply with the 8 (eight) conditions for lawful processing of personal information set out in Chapter 3 of POPIA.\n\n \n\n30\n\n \n\n \n\nAdditionally,\nthere are a number of South African statutes regulate electronic communications, including the Electronic Communications and Transactions\nAct, No. 25 of 2002 (“ECTA”), as amended, which apply to a number of aspects of our business. ECTA seeks to give functional\nequivalence to electronic transactions by ensuring that, generally, such transactions have the same status as physically concluded transactions.\nECTA is therefore a law of general application which applies to transactions which are concluded electronically or by way of data messages.\n\n \n\n*Consumer\nProtection*\n\n \n\nThe\nConsumer Protection Act, No. 68 of 2007, as amended (the “CPA”) which came into effect on March 31, 2011, consolidated a\npreviously fragmented legislative regime related to consumer protection.\n\n \n\nThe\nCPA, as a general rule, in terms of section 5, applies to: (i) the promotion of goods and services within South Africa; (ii) every transaction\nfor the supply of goods and services occurring within South Africa, unless specifically exempt; (iii) the goods and services themselves\nafter the transaction is completed.\n\n \n\nThe\nCPA does not apply to transactions which are specifically exempt, including where a consumer is a juristic person whose asset value or\nannual turnover, at the time of the transaction, equals or exceeds the threshold (currently ZAR2 million rand) and a transaction which\nconstitutes a credit agreement under the National Credit Act, 34 of 2005 although it will continue to apply to the goods or services\nsupplied in terms of that credit agreement.\n\n \n\nNotwithstanding\nthe exclusion listed above, section 5(5) provides that if any goods are supplied within South Africa to a person in terms of a transaction\nthat is exempt from the application of the CPA, those goods and the importer or producer, distributor and retailer of those goods are\nnonetheless subject to the safety recall and product liability provisions set out in sections 60 and 61, respectively.\n\n \n\nSection\n60 regulates a product recall. Section 61 applies to unsafe goods, a product failure, defect or hazard in any goods or inadequate instructions\nor warnings provided to the consumer pertaining to any hazard associated with the use of any goods and all the persons in the supply\nchain (producer, importer, distributor and retailer) and suppliers of services could potentially face a claim for product liability if\nthe unsafe, hazardous or defective goods caused harm to persons or damage to property.\n\n \n\nThe\nCPA has far-reaching consequences for both consumers and suppliers of goods and services in South Africa. It provides a comprehensive\nframework for the rights and the duties of consumers and suppliers. Contracts between consumers and suppliers, the manner in which suppliers\ninteract with consumers, including market-related communications, suppliers’ liability, suppliers’ accountability to consumers\nand the administration of suppliers and practices are all regulated by the CPA. A “consumer”, for the purposes of the CPA,\nincludes a customer to whom goods or services are marketed, a customer who enters into a transaction with a supplier and the user, recipient\nor beneficiary of the goods or services (irrespective of whether the consumer was a party to the transaction involving the actual supply\nof the goods or services). The implication of this qualification is that there need not be a contract between the supplier and the consumer\nof the goods or services in order for the CPA to apply.\n\n \n\nThe\nCPA introduced some significant departures from the South African common law. Most notably, section 61 of the CPA, referred to above,\ndoes not require fault (i.e., negligence or intent) on the part of a supplier of products to be proven in a claim for loss or harm arising\nfrom a faulty product. It also extends the type of loss or damages that may be claimed by a plaintiff beyond what would ordinarily be\npermitted under the common law, by allowing a plaintiff to institute a claim against not only the supplier who supplied the goods to\nit, but to other suppliers in the supply chain as well. In addition, this section of the CPA, extends liability to consequential damages\n(i.e., economic loss). Thus, a consumer may be able to claim indirect damages suffered, such as medical expenses, loss of income and/or\nloss of profits.\n\n \n\nAlthough\nthe CPA imposes liability on all suppliers in the supply chain irrespective of their fault, the liability imposed is not absolute. A\nconsumer must still prove the other elements necessary to sustain a claim against a supplier in terms of the common law, such as causation\n(i.e. whether the failure of the product caused the loss allegedly suffered) and loss suffered.\n\n \n\nSection\n61 also provides for a number of defenses which, if proved by a supplier, will exonerate or limit the liability of the supplier.\n\n \n\nIn\naddition, the CPA provides consumers with a number of remedies. If a consumer has a complaint against a supplier, they can take that\ncomplaint to the National Consumer Commission, and, in certain instances, the National Consumer Tribunal or a Court.\n\n \n\n*Artificial\nIntelligence Regulation*\n\n \n\nAI\nis currently largely unregulated in South Africa and has not yet formalized any policy documents or presented bills to parliament for\nthe regulation thereof. In April 2019, the President appointed members to the Presidential Commission on the Fourth Industrial Revolution\n(“PC4IR”), which will assist the government in taking advantage of the opportunities presented by the digital industrial\nrevolution. In addition, the Artificial Intelligence Institute of South Africa was launched by the Department of Communication and Digital\nTechnologies on November 30, 2022 based on the vision set out by the PC4IR. Regulatory development regarding AI will in due course follow,\nbut socio-economic factors, including inequality and unemployment, with job losses due to AI, are a concern. Existing laws may impact\nAI. For example, the Copyright Act, 1978 provides for a class of computer-generated works, but, insofar as AI creations do not have human\nauthors, there is uncertainty as to who the author of the work would be and whether it can be said that the work itself is original.\nIn July 2021, a patent was awarded by South Africa’s patent office, the South African Companies and Intellectual Property Commission,\nto an invention generated by AI and it was likely the first country in the world to do so. Where AI inventions process personal information\nin South Africa, it would also trigger the application of the Protection of Personal Information Act, 2013.\n\n \n\n31\n\n \n\n** **\n\n**C.\nOrganizational Structure**\n\n \n\nAs\na result of the Formation Transaction, the Company is the holding company of the RedCloud Group, which includes RedCloud Technologies\nLimited as the direct wholly-owned operating subsidiary. Our corporate structure is as follows:\n\n \n\n \n\n**D.\nProperty, Plants and Equipment**\n\n \n\nWe\ndo not have any material tangible fixed assets. We do not own any real estate. Our corporate headquarters is located in London, England,\nat 50 Liverpool Street, London, EC2M 7PY, where we have a license to occupy an office suite and meeting rooms of approximately 100 square\nmeters. The current term of our license expires end October 2026. We also had access to WeWork shared office space in London & Buenos\nAires, until our contract expired in January 2026. Our corporate headquarters is an administrative hub and base for senior management.\nIn the other jurisdictions in which we operate, we do not have any agreements for offices in place and we utilize space on an ad hoc\nbasis when we need space.\n\n \n\nWe\nbelieve our existing facility arrangements are sufficient for our needs for the foreseeable future. To meet the future needs of our business,\nwe may lease additional or alternate space in each country, and we believe suitable additional or alternative space will be available\nin the future on commercially reasonable terms."}