{"url_path":"/sec/tghl/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 Operating and Financial Review and Prospects**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2024114/0001493152-26-023959-index.html","accession_number":"0001493152-26-023959","cik":"0002024114","ticker":"TGHL","issuer_name":"GrowHub Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/2024114/0001493152-26-023959-index.html","primary_entity_key":"0002024114","primary_entity_name":"GrowHub Ltd"},"word_count":5398,"has_tables":true,"body_markdown":"**Item\n5. Operating and Financial Review and Prospects** \n\n \n\n*You\nshould read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined\nfinancial statements and consolidated financial statements and the related notes included in this annual report. This discussion contains\nforward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially\nfrom those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk\nFactors” and elsewhere in this annual report.*\n\n \n\n**A.\nOperating Results.**\n\n** **\n\nThe\nfollowing discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction\nwith the Company’s consolidated financial statements and related notes appearing elsewhere in this prospectus. In addition to historical\ninformation, the following discussion and analysis in this section and throughout this prospectus contains forward-looking statements\nthat involve risks, uncertainties and assumptions. The Company’s actual results may differ materially from those anticipated in\nthese forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors”\nand elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”\n\n \n\n**Overview**\n\n** **\n\nTHE\nGROWHUB LIMITED is an investment holding company incorporated on April 12, 2024 under the laws of the Cayman Islands. Headquartered in\nSingapore, THE GROWHUB LIMITED and its subsidiaries (collectively termed “the Company”) span the Asia Pacific region and\nrender both services and sale of goods to its customers. Along with the provision of a product traceability service for companies, the\nCompany trades in food, agriculture, skincare, and other products, and provides IT professional services.\n\n \n\nPrior\nto 2023, the Company provided professional services in the form of software development and consultancy services through its IT consultancy\ndivision of in-house developers. In 2023, management undertook a strategic review and made a transformative shift to develop the revolutionary\nGrowHub Platform (the “Platform”) into a Software-as-a-Service (“SaaS”) model. This strategic move provided the\nCompany with its newest business Division – the GrowHub Platform, marking a significant milestone in the Company’s journey\nto providing and implementing cutting-edge traceability technology solutions. From the third quarter of 2023, the Platform was quickly\nlaunched, and external customers were onboarded.\n\n \n\n29\n\n \n\n \n\nIn\naddition to the professional and subscription services mentioned, the Company, through its subsidiary GrowHub Apac, engages in the trade\nof food, skincare and other fast-moving consumer goods by utilizing its network in Australia, Japan, Malaysia and Singapore to expand\nin the Asia Pacific region.\n\n \n\nOn\nAugust 23, 2024, in preparation for this offering, our Group completed an internal reorganization pursuant to which GrowHub Innovations\nSingapore ultimately became a wholly-owned subsidiary of GrowHub BVI, and GrowHub BVI became a wholly owned subsidiary of GrowHub Cayman.\nUpon completion of the aforementioned, the Company became the ultimate holding company of our operating subsidiaries.\n\n \n\n**Business\nDivisions**\n\n \n\nThe\nCompany operates through the following business divisions: the GrowHub Platform, the Product Trading Division and the IT Consultancy\nDivision.\n\n \n\n \n**1.**\n**GrowHub\nPlatform**\n\n** **\n\nThe\nPlatform is built on a Software-as-a-Service (“SaaS”) model making it easily available and scalable to organizations from\nstart-ups to large enterprises. Food suppliers, distributors, retailers, and other stakeholders pay a recurring fee to access the Platform’s\nthree key features:\n\n \n\n \n●\nTraceability\nSolution;\n\n \n\n \n●\nAnti-counterfeit\nSolution; and\n\n \n\n \n●\nCarbon\nmanagement Solutions.\n\n \n\nSubscription\ntiers may vary based on the features selected, the level of functionality and usage volume required by the customer, offering scalability\nand flexibility to meet diverse business needs. Monthly subscriptions range from US$160 to US$300. We will be focusing our attention\non attracting and onboarding more customers in 2025.\n\n \n\n \n**2.**\n**Product\nTrading Facilitation**\n\n** **\n\nPrior\nto and during 2023, the Company operated a normal trading operation where we purchased goods and sold them to our customers on a wholesale\nbasis. Moving forward to 2024, we focused more on facilitation of trade where customers can consign their goods to the Company, fully\nutilizing the Company’s distribution network in the Asia Pacific region. Due to our expansive network of suppliers and retailers,\nwe will be able facilitate seamless placement of products from our Platform in both traditional retail and increasingly popular online\nchannels. By analyzing transaction data, consumer behavior patterns, and market trends inherent to the Platform, the Company will utilize\nartificial intelligence (“AI”) technology to develop optimum product placement strategies and actionable insights that can\nmaximize revenue generation for the Company and our network of partners. Using AI, our system gathers data from the QR code scans, various\necommerce websites where our products are sold, as well as transaction records. From there, our AI system integrates disparate data sets,\nensuring comprehensive and consistent data for analysis. AI algorithms detect and correct errors and standardize them to ensure accuracy\nand reliability for analyses.\n\n \n\nOur\nAI models analyze historical data to predict future trends. The analytics enable our clients to better understand the preferences of\nconsumers, their interaction frequencies, and from these data to forecast future sales. These insights help our clients tailor their\nmarketing strategies to more effectively target their desired market segment, increasing the chances of successful engagement and\nsales. This division will also be poised to trade any newly launched products developed at the GrowHub Innovation Centre. This\nDivision has ceased operation since January 1, 2026 due to its low margin consideration.\n\n \n\n30\n\n \n\n \n\n \n**3.**\n**IT\nConsultancy Services**\n\n** **\n\nThe\nCompany has an in-house technology team that is able to provide a range of professional services to customers in the form of software\ndevelopment and consultancy services. It generates revenue in the form of both customized projects as well as retainer fees.\n\n \n\n**Key\nFactors Affecting the Results of Our Group’s Operations**\n\n** **\n\nOur\noperating results are primarily affected by those factors set out in the section titled ‘‘*Risk Factors*’’\nin this prospectus and those set out below:\n\n \n\n**Environmental,\nSocial and Governance (“ESG”) Changes and Enforcement**\n\n** **\n\nESG\nrefers to a set of criteria used by investors and stakeholders to evaluate a company’s sustainability and ethical practices. On\na global level, ESG is being championed by various stakeholders, including governments, businesses, investors and civil society. Certain\ncountries in APAC, such as Japan, China, Singapore and Australia have already introduced guidance for listed companies on disclosure\nof ESG-related information in their annual reports. Corporate leaders are also voluntarily adopting ESG principles and practices as part\nof their business strategies as they recognize the importance of sustainability, ethical conduct and good governance for long term value\ncreation, risk management and stakeholder engagement. As society in general becomes more conscious of what they are consuming, they will\ndecide to learn more about the origin of the food products and utilize the traceability function provided by companies on the Platform.\nThis in turn will drive more companies to implement and account for sustainability initiatives across their supply chain, accelerating\nthe growth of the Company.\n\n \n\n**Investments\nin Artificial Intelligence and Data Analytics**\n\n** **\n\nWe\nare committed to staying at the forefront of technological advancements, and our ongoing investment in AI ensures that we can continue\nto innovate and enhance our Platform, providing a better user experience. Investment in data analytics ensures that we remain agile,\ncustomer-centric and provide value to companies and individual consumers. Armed with the AI-driven analytics, we can better tailor our\nproduct offerings to meet specific customer needs and drive further adoption.\n\n \n\n**Inflation**\n\n \n\nInflation\nmay impact the cost of the food products globally, potentially leading to compressed profit margins. Inflation tends to drive up the\nprices of the raw materials needed in food products, eventually leading to an increase in cost at each step of the supply chain. This\nincrease in food product costs can be attributed to various factors, including adverse weather conditions such as droughts, floods, hurricanes\nor other natural disasters which can damage crops, reduce yields and disrupt supply chains. When supply decreases, prices tend to rise.\nFluctuations in energy prices, particularly crude oil prices, can impact transportation and production costs as well. These prices may\nbe passed on to consumers. However, in the fiercely competitive environment, we may encounter challenges when attempting to pass on increased\nfood product costs to customers through higher product prices. Consumers and businesses alike are often sensitive to price changes, and\naggressive pricing strategies may negatively affect our revenue and our costs.\n\n \n\n**Fluctuation\nin exchange rates**\n\n \n\nWe\noperate in multiple markets, which exposes us to the effects of fluctuations in currency exchange rates as we report our financials and\nkey operational metrics in SGD. In the event that such fluctuations in the relevant foreign currency are substantial and we are unable\nto pass on our costs to our customers, our earnings, financial position, and results of operation may be affected.\n\n \n\n31\n\n \n\n \n\n**Critical\nAccounting Policies**\n\n** **\n\nThe\nsignificant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial\nresults are described below. Refer to “*Note 2 — Summary of significant accounting policies*” to the consolidated\nfinancial statements included elsewhere in this prospectus for more detailed information regarding our critical accounting policies.\n\n \n\n*Revenue\nrecognition*\n\n \n\nThe\nCompany accounts for its revenue under ASC Topic 606, Revenue from Contracts with Customers. The five-step model defined by ASC Topic\n606 requires the Company to:\n\n \n\n(1)\nidentify its contracts with customers;\n\n \n\n(2)\nidentify its performance obligations under those contracts;\n\n \n\n(3)\ndetermine the transaction prices of those contracts;\n\n \n\n(4)\nallocate the transaction prices to its performance obligations in those contracts; and\n\n \n\n(5)\nrecognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised services are\ntransferred to the client in an amount that reflects the consideration expected in exchange for those services.\n\n \n\nRevenues\nare generally recognized upon the transfer of control of promised products or services provided to our customers, reflecting the amount\nof consideration we expect to receive for those products or services.\n\n \n\nProfessional\nservice revenue\n\n \n\nProfessional\nservice revenue is generated through one-time or non-recurring projects with existing or new customers. Consultancy advisory services\ninclude feasibility studies and proposal of technology solutions that enhance the customers’ distribution networks and outreach\nof their products or services in Asia. Other projects include customized development works for specific needs of the clients, AI-based\ndata analytics and market intelligence. A written service agreement detailing the scope of consultancy advisory services, defined milestones,\nperformance obligations delivery, contractual value, and payment terms, is signed by both customer and the Company (service provider)\nprior to the commencement of the project. The service revenue contract is priced at a fixed fee rate for each performance obligation.\nThe chargeable fee is based on a competitive market rate for a similar service offer. The revenue is recognized upon achieving the agreed\nproject milestones and fulfilling the contractual obligations.\n\n \n\nPlatform\nsubscription revenue\n\n \n\nPlatform\nsubscription revenue is generated from the Company’s proprietary Web3 enabled cloud-based platform that offers users access to\nthe platform for traceability and data analytics across the entire value chain. Web3 is a new iteration of the World Wide Web which incorporates\nconcepts such as decentralization, blockchain technologies, and token-based economics. The GrowHub Platform embraces the principles of\nWeb3 by utilizing blockchain, with an aim to ensure that products are traceable across the supply chain, from production to consumer,\nfacilitating transparency and trust. Currently, the core of Web3 concept and feature for our platform – blockchain-based traceability\n– is fully operational. The GrowHub Platform conforms to open standards for Web3, such as the ERC 1155 standard. An open standard\nis a publicly accessible and usable specification that ensures interoperability and flexibility across different systems and platforms;\nand the ERC 1155 standard is a token standard on the Ethereum blockchain that allows for the creation and management of multiple types\nof tokens, both fungible and non-fungible, within a single smart contract. In addition, some of our services which are yet to be enabled\non the platform are designed with the capability to be operated by our clients directly on blockchain through our smart contracts, which\naligns with Web3 principles by leveraging blockchain technology, smart contracts, and open standards to create a decentralized, interoperable,\nand user-empowered platform.\n\n \n\nFor\ngeneration of platform subscription revenue, a written software subscription service agreement detailing the extent of access rights\ngranted, duration of the access, contractual value, and payment terms, is signed by both customer and the Company (SaaS provider). The\nsubscription revenue contract is priced at per user login. Under this per-active user pricing model, customers pay a predetermined fee\nfor each login user who actively uses the Company’s SaaS product within a defined period, typically monthly or annually. The SaaS\nrevenue is recognized ratably over the agreed subscription period.\n\n \n\n32\n\n \n\n \n\nSales\nof goods\n\n \n\nTransaction-based\nrevenue generated through delivery of identified goods to customers at the agreed price. The Company acts as a pass-through and therefore\nminimizes the risk of inventory. Customers place orders via the Company’s in-house ecommerce platform or external ecommerce marketplaces.\nUpon successful delivery of non-defective goods and accepts the good in the original state with no demand of refund or good return by\nthe customer, revenue is recognized.\n\n \n\nConsignment\nsales\n\n \n\nActing\nas principal\n\n \n\nTransaction-based\nrevenue is generated through the sale of goods to end customers, at the point control transfers under a consignment arrangement. The\nCompany acts as the principal, retaining control and inventory risk until the sale is made. Revenue is recognized at the agreed retail\nprice less any applicable consideration paid to the consignee (e.g., commission or fees) upon the completion of the sales transaction\nto the end customer.\n\n \n\nActing as agent\n\n \n\nTransaction-based\nrevenue is generated through assisting the Consignor (i.e. Supplier) to place out its product portfolio over the distribution network\nof Consignee (channel partners). Upon the successful delivery and acceptance of goods by the end customer, an agreed-upon agency fee\nis deposited into the Company’s designated bank account. Consignment sales is recognized at net basis upon the completion of the\nsales transaction to the final consumer.\n\n \n\n**Critical\nAccounting Estimates**\n\n** **\n\nThe\ndiscussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which\nhave been prepared in accordance with accounting principles generally accepted in the United States. These principles require us to make\ncertain estimates and judgments that affect the amounts reported in our consolidated financial statements.\n\n \n\n**Recent\nAccounting Pronouncements**\n\n** **\n\nA\ndiscussion of recent accounting pronouncements is included in “Note 2—Summary of Significant Accounting Policies to our audited\nconsolidated financial statements” included elsewhere in this prospectus.\n\n \n\n**Results\nof Operations**\n\n** **\n\nThe\nfollowing table summarizes the consolidated results of our operations for the year ended December 31, 2024, and 2025, respectively.\n\n \n\n  \nFor Years Ended December 31, \n\n  \n2024  \n2025  \nVariance  \n  \n\n  \nSGD  \nSGD  \nUSD  \nSGD  \n% Change \n\nRevenue \n 237,014  \n 83,032  \n 64,574  \n (153,982) \n (64.97)%\n\n  \n    \n    \n    \n    \n   \n\nPurchases and other direct costs \n (166,694) \n (99,519) \n (77,396) \n 67,175  \n (40.30)%\n\nInventory write-off \n (112) \n (1,675) \n (1,303) \n (1,563) \n 1,395.54%\n\nEmployee benefits expenses \n (850,806) \n (1,484,837) \n (1,154,758) \n (634,031) \n 74.52%\n\nProfessional fees \n (621,563) \n (12,911,970) \n (10,041,639) \n (12,290,407) \n 1,977.34%\n\nDepreciation and amortization expenses \n (27,899) \n (44,162) \n (34,345) \n (16,263) \n 58.29%\n\nOperating lease expenses \n (71,094) \n (125,625) \n (97,699) \n (54,531) \n 76.70%\n\nOther expenses \n (808,971) \n (2,338,978) \n (1,819,023) \n (1,530,007) \n 189.13%\n\nLoss from operations \n (2,310,125) \n (16,923,734) \n (13,161,589) \n (14,613,609) \n 632.59%\n\n  \n    \n    \n    \n    \n   \n\nNon-operating income (expense): \n    \n    \n    \n    \n   \n\nOther income (expense), net \n 102,042  \n (96,886) \n (75,348) \n (198,928) \n (194,95)%\n\nLoss on disposal of plant and equipment \n -  \n (89,375) \n (69,507) \n (89.375) \n - \n\nInterest expense \n (159,482) \n (90,807) \n (70,621) \n 68,675  \n (43.06)%\n\nTotal non-operating expense, net \n (57,440) \n (277,068) \n (215,476) \n (219,628) \n 382.36%\n\n  \n    \n    \n    \n    \n   \n\nLoss before tax expense \n (2,367,565) \n (17,200,802) \n (13,377,065) \n (14,833,237) \n 626.52%\n\n  \n    \n    \n    \n    \n   \n\nIncome tax credit \n 3,750  \n 215  \n 167  \n (3,535) \n (94.27)%\n\nNet loss \n (2,363,815) \n **(17,200,587****)** \n **(13,376,898****)** \n (14,836,772) \n 627.66%\n\n \n\n33\n\n \n\n \n\n**Revenue**\n\n** **\n\nOur\nrevenue consists of three main categories. The following table provides financial information for each of these operating groups.\n\n \n\n  \nFor\nYears Ended December 31, \n\n  \n2024  \n2025  \nVariance  \n  \n\n  \nSGD  \nSGD  \nUSD  \nSGD  \n%\nChange \n\nRevenue: \n    \n    \n    \n    \n   \n\nProfessional service revenue \n 175,510  \n 25,598  \n 19,907  \n (149,912) \n (85.42)%\n\nSubscription revenue \n 21,712  \n 23,556  \n 18,320  \n 1,844  \n 8.49%\n\nSale of goods \n 37,990  \n 33,878  \n 26,347  \n (4,112) \n (10.82)%\n\nConsignment sales \n 1,802  \n -  \n -  \n 1,802  \n \n100.00\n%\n\nTotal \n 237,014  \n 83,032  \n 64,574  \n (153,982) \n (64.97)%\n\n  \n    \n    \n    \n    \n   \n\nRevenue as a percentage\nof total: \n    \n    \n    \n    \n   \n\nProfessional service revenue \n 74% \n 31% \n 31% \n    \n   \n\nSubscription revenue \n 9% \n 28% \n 28% \n    \n   \n\nSale of goods \n 16% \n 41% \n 41% \n    \n   \n\nConsignment sales \n 1% \n -% \n -% \n    \n   \n\nTotal \n 100% \n 100% \n 100% \n    \n   \n\n \n\nOur\nprincipal revenue sources for the years ended December 31, 2024 and 2025 were professional services, Platform subscription, sale of goods\nand consignment sales. Our total revenue decreased by S$153,982, or 64.97%, from S$237,014 for the year ended December 31, 2024, to S$83,032.\nThe decrease was primarily due to weaker professional services revenue.\n\n \n\n**Professional\nservice revenue** decreased by S$149,912, or 85.42%, from S$175,510 for the year ended December 31, 2024 to S$25,598 for the year ended\nDecember 31, 2025. The drop was primarily due to the shortage of IT consultancy and software implementation projects awarded and recognized.\nHowever, our clients still increasingly sought customized solutions and advisory services tailored to their digital transformation objectives,\ndriving higher engagement and billings in the coming year.\n\n \n\n**Subscription\nrevenue** remain consistent with a minor increase of S$1,844, or 8.49%, from S$21,712 for the year ended December 31, 2024 to S$23,556\nfor the year ended December 31, 2025. We continue onboarding new enterprise customers seeking our traceability and anti-counterfeit technologies.\n\n \n\n**Revenue\nfrom the sale of goods** remain consistent with a minor decrease of S$4,112, or 10.82%, from S$37,990 for the year ended December 31,\n2024, to S$33,878 for the year ended December 31, 2025.\n\n \n\n**Consignment\nsales** decreased by S$1,802, or 100%, to nil for the year ended December 31, 2025. Consignment sales plan has ceased during the year\ndue to margin too low.\n\n \n\n34\n\n \n\n \n\nOur\npurchases and other direct costs decreased by S$67,175, or 40.30%, from S$166,694 for the year ended December 31, 2024, to S$99,519 for\nthe year ended December 31, 2025. The decrease was primarily due to the decrease in software development costs.\n\n \n\nOur\ninventory write-offs increased by S$1,563 or 1,395.54%, from S$112 for the year ended December 31, 2024, to S$1,675 for the year ended\nDecember 31, 2025. The increase was primarily due to more consumable stocks obsolete.\n\n \n\nOur\nemployee benefits expenses increased by S$634,031, or 74.52%, from S$850,806 for the year ended December 31, 2024, to S$1,484,837 for\nthe year ended December 31, 2025. The increase was primarily attributable to the increase head count and staff cost for buildup entire\nmanagement and technology team in 2025.\n\n** **\n\nOur Professional fees increased by S$12,290,407,\nor 1,977.34%, from S$621,563 for the year ended December 31, 2024, to S$12,911,970 for the year ended December 31, 2025. The significant\nincrease was due to the business and relationship development, marketing, and technology consultancy service after the IPO.\n\n \n\nOur depreciation and amortization expenses increased\nby S$16,263, or 58.29%, from S$27,899 for the year ended December 31, 2024, to S$44,162 for the year ended December 31, 2025. The increase\nwas due to the new plant and equipment depreciating in 2025.\n\n \n\nOur operating lease expenses increased by S$54,531,\nor 76.70%, from S$71,094 for the year ended December 31, 2024, to S$125,625 for the year ended December 31, 2025. The increase was mainly\ndue to higher rental rates following the renewal of our office and operational space leases to accommodate business expansion.\n\n** **\n\nOur other expenses increased by S$1,530,007, or 189.13%, from S$808,971\nfor the year ended December 31, 2024, to S$2,338,978 for the year ended December 31, 2025. The increase was primarily attributable to\nthe write-off of intangible assets of S$1,990,000 due to technology outdated by fast pace developing in the market.\n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\n \n \n**For Years Ended December 31,**\n \n\n \n \n**2024**\n \n \n**2025**\n \n \n**Variance**\n \n \n \n \n\n \n \n**SGD**\n \n \n**SGD**\n \n \n**USD**\n \n \n**SGD**\n \n \n**% Change**\n \n\n**Liquidity and capital resources:**\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCash and cash equivalents at the beginning of the year\n \n \n15,013\n \n \n \n546,288\n \n \n \n424,848\n \n \n \n531,275\n \n \n \n3,538.77\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet cash used in operating activities\n \n \n(3,288,867\n)\n \n \n(14,040,955\n)\n \n \n(10,919,652\n)\n \n \n(10,752,088\n)\n \n \n326.92\n%\n\nNet cash used in investing activities\n \n \n(32,419\n)\n \n \n(5,523\n)\n \n \n(4,296\n)\n \n \n26,896\n \n \n \n(82.96\n)%\n\nNet cash generated from financing activities\n \n \n3,853,603\n \n \n \n14,435,089\n \n \n \n11,226,171\n \n \n \n10,581,486\n \n \n \n274.59\n%\n\nForeign currency translation\n \n \n(1,042\n)\n \n \n229,029\n \n \n \n178,116\n \n \n \n230,071\n \n \n \n(22,079.75\n)%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet increase in cash and cash equivalents\n \n \n531,275\n \n \n \n617,640\n \n \n \n480,339\n \n \n \n86,365\n \n \n \n16.26\n%\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCash and cash equivalents at the end of the year\n \n \n546,288\n \n \n \n1,163,928\n \n \n \n905,187\n \n \n \n617,640\n \n \n \n113.06\n%\n\n \n\n35\n\n \n\n \n\n**Cash\nFlows from Operating Activities**\n\n** **\n\nFor the year ended December 31, 2025, net cash\nused in operating activities was S$14,040,955, compared to net cash used in operating activities of S$3,288,867 during the year ended\nDecember 31, 2024.\n\n \n\nFor the year ended December 31, 2025, net\ncash used in operating activities was attributed to the net loss of S$17,200,587, adjusted for non-cash items which included\ndepreciation of plant and equipment, amortization of intangible assets, inventory written off, loss on disposal of plant and\nequipment, loss on lease termination, intangible assets written off, interest on working capital loan, provision for expected credit\nlosses and operating lease expenses, totaling S$2,341,644. This was offset against net cash inflow arising from the net change in\noperating assets and liabilities of S$817,988.\n\n \n\nFor\nthe year ended December 31, 2024, net cash used in operating activities was attributed to the net loss of S$2,363,815, adjusted for\nnon-cash items which included depreciation of plant and equipment, amortization of intangible assets, provision for stock\nobsolescence, interest on working capital loan, provision for expected credit losses and operating lease expenses, totaling\nS$262,462. This was offset against net cash outflow arising from the net change in operating assets and liabilities of\nS$935,897.\n\n \n\n**Cash\nFlows from Investing Activities**\n\n** **\n\nFor\nthe year ended December 31, 2025, net cash used in investing activities was S$5,523, compared to net cash used in investing activities\nof S$32,419 during the year ended December 31, 2024.\n\n \n\nNet\ncash used in investing activities for the year ended December 31, 2025, consisted of purchase of plant and equipment of S$1,597 and\nS$12,791 for the acquisition of subsidiary under common control. This is partially offset by proceeds from disposal of plant and equipment of S$8,865.\n\n \n\nNet\ncash used in investing activities for the year ended December 31, 2024, consisted of purchase of plant and equipment of S$22,768 and\nS$9,651 for the acquisition of subsidiary under common control.\n\n \n\n**Cash\nFlows from Financing Activities**\n\n** **\n\nFor\nthe year ended December 31, 2025, net cash generated from financing activities was S$14,435,089, compared to net cash generated from\nfinancing activities of S$3,853,603 during the year ended December 31, 2024.\n\n \n\nNet\ncash provided by financing activities for the year ended December 31, 2025, consisted of the proceeds from the issuance of shares of\nS$16,836,905, partially offset by repayment of working capital loan of S$2,401,816.\n\n \n\nNet\ncash provided by financing activities for the year ended December 31, 2024, consisted of the proceeds from working capital loan of S$1,264,280,\nand proceeds from the issuance of shares of S$3,341,021. This is net of deferred offering costs of S$751,698.\n\n \n\n36\n\n \n\n \n\nThe\nfollowing table summarizes the consolidated results of our operations for the year ended December 31, 2023, and 2024, respectively.\n\n \n\n  \nFor\nYears Ended December 31, \n\n  \n2023  \n2024  \nVariance  \n  \n\n  \nSGD  \nSGD  \nUSD  \nSGD  \n%\nChange \n\nRevenue \n 128,531  \n 237,014  \n 173,484  \n 108,483  \n 84.40%\n\n  \n    \n    \n    \n    \n   \n\nPurchases and other direct costs \n (110,525) \n (166,694) \n (122,013) \n (56,169) \n 50.82%\n\nInventory write-off \n (172,303) \n (112) \n (82) \n 172,191  \n (99.93)%\n\nEmployee benefits expenses \n (753,302) \n (850,806) \n (622,754) \n (97,504) \n 12.94%\n\nProfessional fees \n (235,595) \n (621,563) \n (454,959) \n (385,968) \n 163.83%\n\nDepreciation and amortization expenses \n (49,359) \n (27,899) \n (20,421) \n 21,460  \n (43.48)%\n\nOperating lease expenses \n (61,806) \n (71,094) \n (52,038) \n (9,288) \n 15.03%\n\nOther expenses \n (456,826) \n (808,971) \n (592,134) \n (352,145) \n 77.09%\n\nLoss from operations \n (1,711,185) \n (2,310,125) \n (1,690,917) \n (598,940) \n 35.00%\n\n  \n    \n    \n    \n    \n   \n\nNon-operating income (expense): \n    \n    \n    \n    \n   \n\nOther income, net \n 37,459  \n 102,042  \n 74,690  \n 64,583  \n 172.41%\n\nInterest expense \n (119,716) \n (159,482) \n (116,734) \n (39,766) \n 33.22%\n\nTotal non-operating expense, net \n (82,257) \n (57,440) \n (42,044) \n 24,817  \n (30.17)%\n\n  \n    \n    \n    \n    \n   \n\nLoss before tax expense \n (1,793,442) \n (2,367,565) \n (1,732,961) \n (574,123) \n 32.01%\n\n  \n    \n    \n    \n    \n   \n\nIncome tax (expense) credit \n (2,902) \n 3,750  \n 2,745  \n 6,652  \n 229.22%\n\nNet\nloss \n (1,796,344) \n (2,363,815) \n (1,730,216) \n (567,471) \n 31.59%\n\n \n\n**Revenue**\n\n** **\n\nOur\nrevenue consists of three main categories. The following table provides financial information for each of these operating groups.\n\n \n\n  \nFor\nYears Ended December 31, \n\n  \n2023  \n2024  \nVariance  \n  \n\n  \nSGD  \nSGD  \nUSD  \nSGD  \n%\nChange \n\nRevenue: \n    \n    \n    \n    \n   \n\nProfessional service revenue \n 76,826  \n 175,510  \n 128,466  \n 98,684  \n 128.45%\n\nSubscription revenue \n 4,284  \n 21,712  \n 15,892  \n 17,428  \n 406.82%\n\nSale of goods \n 47,421  \n 37,990  \n 27,807  \n (9,431) \n (19.89)%\n\nConsignment sales \n -  \n 1,802  \n 1,319  \n 1,802  \n 100%\n\nTotal \n 128,531  \n 237,014  \n 173,484  \n 108,483  \n 84.40%\n\n  \n    \n    \n    \n    \n   \n\nRevenue as a percentage\nof total: \n    \n    \n    \n    \n   \n\nProfessional service revenue \n 60% \n 74% \n 74% \n    \n   \n\nSubscription revenue \n 3% \n 9% \n 9% \n    \n   \n\nSale of goods \n 37% \n 16% \n 16% \n    \n   \n\nConsignment sales \n -% \n 1% \n 1% \n    \n   \n\nTotal \n 100% \n 100% \n 100% \n    \n   \n\n \n\n37\n\n \n\n \n\nOur\nprincipal revenue sources for the years ended December 31, 2023 and 2024 were professional services, Platform subscription, sale of goods\nand consignment sales. Our total revenue increased by S$108,483, or 84.40%, from S$128,531 for the year ended December 31, 2023, to S$237,014.\nThe increase was primarily driven by higher professional services and platform subscription revenue.\n\n \n\n**Professional\nservice revenue** increased by S$98,684, or 128.45%, from S$76,826 for the year ended December 31, 2023 to S$175,510 for the year ended\nDecember 31, 2024. The growth was primarily due to the resumption and expansion of IT consultancy and software implementation projects,\nfollowing the successful launch of our GrowHub Platform. Our clients increasingly sought customized solutions and advisory services tailored\nto their digital transformation objectives, driving higher engagement and billings.\n\n \n\n**Subscription\nrevenue** increased by S$17,428, or 406.82%, from S$4,284 for the year ended December 31, 2023 to S$21,712 for the year ended December\n31, 2024. The substantial growth reflects the continued scaling of our Platform’s user base, following its initial launch in the\nsecond half of 2023. As our marketing efforts intensified and the market increasingly embraced ESG-focused solutions, we successfully\nonboarded new enterprise customers seeking our traceability and anti-counterfeit technologies.\n\n \n\n**Revenue\nfrom the sale of goods** decreased by S$9,431, or 19.89%, from S$47,421 for the year ended December 31, 2023, to S$37,990 for the year\nended December 31, 2024. The decrease was primarily due to the transition of our trading model towards consignment and agency arrangements,\nresulting in lower direct sales volume as we focused on higher-margin service and platform revenue streams.\n\n \n\n**Consignment\nsales** increased by S$1,802, or 100%, from nil for the year ended December 31, 2023, to S$1,802 for the year ended December 31, 2024.\nThis increase was primarily attributable to a strategic shift in our business model toward consignment-based transactions, which significantly\nreduced our exposure to inventory-related risks such as obsolescence or write-offs. Under this model, we operate both as a principal\nand as an agent across various product lines, generating commission income through the facilitation of consignment sales. We intend to\ncontinue expanding this revenue channel by identifying additional high-potential products and entering into strategic partnerships with\nnew consignment partners, both domestically and internationally.\n\n \n\nOur\npurchases and other direct costs increased by S$56,169, or 50.82%, from S$110,525 for the year ended December 31, 2023, to S$166,694\nfor the year ended December 31, 2024.The increase was primarily due to an increase in software development costs that is partially offset\nby a reduction in the purchases of goods due to the transition to the consignment-based trading model.\n\n \n\nOur\ninventory write-offs decreased by S$172,191 or 99.93%, from S$172,303 for the year ended December 31, 2023, to S$112 for the year ended\nDecember 31, 2024. The decrease was primarily due to our transition to a consignment-based trading model, which effectively eliminated\ninventory risk and resulted in very minimal write-offs for the year.\n\n \n\nOur\nemployee benefits expenses increased by S$97,504, or 12.94%, from S$753,302 for the year ended December 31, 2023, to S$850,806 for the\nyear ended December 31, 2024. The increase was primarily attributable to the accrual of annual wage supplements for certain staff to\n2024.\n\n \n\nOur Professional fees increased by S$385,968, or 163.83%, from S$235,595\nfor the year ended December 31, 2023, to S$621,563 for the year ended December 31, 2024. The significant increase was largely driven by\nadvisory and legal services associated with fundraising and business expansion activities.\n\n** **\n\nOur\ndepreciation and amortization expenses decreased by S$21,460, or 43.48%, from S$49,359 for the year ended December 31, 2023, to S$27,899\nfor the year ended December 31, 2024. The decrease was due to the write-off of certain intangible assets in 2023.\n\n \n\nOur\noperating lease expenses increased by S$9,288, or 15.03%, from S$61,806 for the year ended December 31, 2023, to S$71,094 for the year\nended December 31, 2024. The increase was mainly due to higher rental rates following the renewal of our office and operational space\nleases to accommodate business expansion.\n\n** **\n\nOur\nother expenses increased by S$350,145, or 76.31%, from S$458,826 for the year ended December 31, 2023, to S$808,971 for the year\nended December 31, 2024. The increase was primarily attributable to an increase in the\nincurrence of referral fees of S$584,634 for customer acquisition efforts in 2024. Further details of other expenses are provided in\nNote 12 to the accompanying financial statements.\n\n \n\n38\n\n \n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\n  \nFor\nYears Ended December 31, \n\n  \n2023  \n2024  \nVariance  \n  \n\n  \nSGD  \nSGD  \nUSD  \nSGD  \n%\nChange \n\nLiquidity and capital resources: \n    \n    \n    \n    \n   \n\nCash and cash equivalents at the\nbeginning of the year \n 18,448  \n 15,013  \n 10,988  \n (3,435) \n (18.62)%\n\n  \n    \n    \n    \n    \n   \n\nNet cash used in operating activities \n (1,141,746) \n (3,288,867) \n (2,407,309) \n (2,147,121) \n 188.06%\n\nNet cash used in investing activities \n (34,974) \n (32,419) \n (23,729) \n 2,555  \n (7.31)%\n\nNet cash generated from financing activities \n 1,174,503  \n 3,853,603  \n 2,820,672  \n 2,679,100  \n 228.10%\n\nForeign currency translation \n (1,218) \n (1,042) \n (763) \n 176  \n (14.45)%\n\n  \n    \n    \n    \n    \n   \n\nNet (decrease) increase in cash and cash\nequivalents \n (3,435) \n 531,275  \n 388,871  \n 534,710  \n (15,566.52)%\n\n  \n    \n    \n    \n    \n   \n\nCash and cash equivalents\nat the end of the year \n 15,013  \n 546,288  \n 399,859  \n 531,275  \n 3,538.77%\n\n \n\n**Cash\nFlows from Operating Activities**\n\n** **\n\nFor\nthe year ended December 31, 2024, net cash used in operating activities was S$3,288,867, compared to net cash used in operating activities\nof S$1,141,746 during the year ended December 31, 2023.\n\n \n\nFor\nthe year ended December 31, 2024, net cash used in operating activities was attributed to the net loss of S$2,363,815, adjusted for non-cash\nitems which included depreciation of plant and equipment, provision for stock obsolescence, interest on working capital loan, provision\nfor expected credit losses and operating lease expenses, totaling S$262,462. This was offset against net cash outflow arising from the\nnet change in operating assets and liabilities of S$1,187,514.\n\n \n\nFor\nthe year ended December 31, 2023, net cash used in operating activities was attributed to the net loss of S$1,796,344, adjusted for non-cash\nitems which included depreciation of plant and equipment, provision for stock obsolescence, interest for working capital loan, intangible\nassets written off, gain on lease modification, and operating lease expenses, totaling S$194,638. This was offset against net cash inflow\narising from the net change in operating assets and liabilities of S$115,354.\n\n \n\n**Cash\nFlows from Investing Activities**\n\n** **\n\nFor\nthe year ended December 31, 2024, net cash used in investing activities was S$32,419, compared to net cash used in investing activities\nof S$34,974 during the year ended December 31, 2023.\n\n \n\nNet\ncash used in investing activities for the year ended December 31, 2024, consisted of purchase of plant and equipment of S$22,768 and\nS$9,651 for the acquisition of subsidiary under common control.\n\n \n\nNet\ncash used in investing activities for the year ended December 31, 2023, consisted of purchase of intangible assets of S$34,974.\n\n \n\n39\n\n \n\n \n\n**Cash\nFlows from Financing Activities**\n\n** **\n\nFor\nthe year ended December 31, 2024, net cash generated from financing activities was S$3,853,603, compared to net cash generated from financing\nactivities of S$1,174,503 during the year ended December 31, 2023.\n\n \n\nNet\ncash provided by financing activities for the year ended December 31, 2024, consisted of the proceeds from working capital loan of S$1,264,280,\nand proceeds from the issuance of shares of S$3,341,021. This is net of deferred offering costs of S$751,698.\n\n \n\nNet\ncash provided by financing activities for the year ended December 31, 2023, consisted of the partial repayment of a working capital loan\nto a related party, Chan Michael @ Chan Soong Cheam, of S$312,352, and proceeds from the issuance of shares of S$1,592,430. This is net\nof deferred offering costs of S$105,575.\n\n \n\n**Working\nCapital**\n\n** **\n\nWe\nbelieve that our Group has sufficient working capital for our requirements for at least the next 12 months from December 31, 2025, in\nthe absence of unforeseen circumstances, taking into account the financial resources presently available to us, including cash and cash\nequivalents on hand and cash flows from our operations.\n\n \n\nBeyond\nDecember 31, 2025, we expect that the Company’s liquidity and working capital will be dependent upon its ability to obtain new\nrevenue-generating customer contracts, and to secure equity and/or debt financing, including but not limited to, loans from related parties\nand issuance of equity.\n\n \n\n**Off-Balance\nSheet Arrangements**\n\n** **\n\nWe\ndo not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial\ncondition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources\nthat is material to investors."}