{"url_path":"/sec/vcig/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 OPERATING AND FINANCIAL REVIEW AND","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-15","source_url":"https://www.sec.gov/Archives/edgar/data/1930510/0001213900-26-078044-index.html","accession_number":"0001213900-26-078044","cik":"0001930510","ticker":"VCIG","issuer_name":"VCI Global Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1930510/0001213900-26-078044-index.html","primary_entity_key":"0001930510","primary_entity_name":"VCI Global Ltd"},"word_count":9622,"has_tables":true,"body_markdown":"**Item 5. OPERATING AND FINANCIAL REVIEW AND\nPROSPECTS**\n\n \n\nThe following discussion of our financial condition\nand results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related\nnotes included in this annual report. This annual report contains forward-looking statements. In evaluating our business, you should carefully\nconsider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report.\nWe caution you that our business and financial performance are subject to substantial risks and uncertainties.\n\n \n\n36\n\n \n\n \n\nA. Operating Results\n\n \n\n**Comparison of Results of Operations for\nthe Fiscal Years Ended December 31, 2025 and 2024**\n\n \n\nThe following table summarizes our results of operations for the fiscal\nyears ended December 31, 2025 and 2024, respectively, and provides information regarding the US$ and percentage increase or decrease during\nsuch periods.\n\n \n\n  \n2025  \n2024  \nVariances \n\n  \nAmount  \n% of total  \nAmount  \n% of total  \nAmount  \n  \n\n  \nUS$  \nrevenue  \nUS$  \nrevenue  \nUS$  \n% \n\nRevenue \n 26,087,422  \n 100.00% \n 27,824,891  \n 100.00% \n (1,737,469) \n (6.24)%\n\n  \n    \n    \n    \n    \n    \n   \n\nOther income \n 9,364,628  \n 35.90% \n 241,591  \n 0.87% \n 9,123,037  \n 3,776.23%\n\n  \n    \n    \n    \n    \n    \n   \n\nCost of services \n (6,756,711) \n 25.90% \n (4,948,193) \n 17.78% \n (1,808,518) \n 36.55%\n\n  \n    \n    \n    \n    \n    \n   \n\nDepreciation \n (536,519) \n 2.06% \n (238,058) \n 0.86% \n (298,461) \n 125.37%\n\n  \n    \n    \n    \n    \n    \n   \n\nAmortisation \n (955,970) \n 3.66% \n (207,989) \n 0.75% \n (747,981) \n 359.63%\n\n  \n    \n    \n    \n    \n    \n   \n\nEmployee benefits expenses \n (17,345,345) \n 66.49% \n (6,811,397) \n 24.48% \n (10,533,948) \n 154.65%\n\n  \n    \n    \n    \n    \n    \n   \n\nImpairment allowance on trade receivables \n (8,424,085) \n 32.29% \n (919,271) \n 3.30% \n (7,504,814) \n 816.39%\n\n  \n    \n    \n    \n    \n    \n   \n\nImpairment allowance on loan receivables \n (31,867) \n 0.12% \n (53,252) \n 0.19% \n 21,385  \n (40.16)%\n\n  \n    \n    \n    \n    \n    \n   \n\nRental expenses \n (112,726) \n 0.43% \n (100,530) \n 0.36% \n (12,196) \n 12.13%\n\n  \n    \n    \n    \n    \n    \n   \n\nLegal and professional fees \n (3,546,333) \n 13.59% \n (2,608,458) \n 9.37% \n (937,875) \n 35.96%\n\n  \n    \n    \n    \n    \n    \n   \n\nFinance cost \n (619,994) \n 2.38% \n (131,912) \n 0.47% \n (488,082) \n 370.01%\n\n  \n    \n    \n    \n    \n    \n   \n\nOther operating expenses \n (26,744,020) \n 102.52% \n (4,362,179) \n 15.68% \n (22,381,841) \n 513.09%\n\n  \n    \n    \n    \n    \n    \n   \n\n(Loss)/profit before income tax \n (29,621,520) \n 113.55% \n 7,685,243  \n 27.62% \n (37,306,763) \n (485.43)%\n\n  \n    \n    \n    \n    \n    \n   \n\nIncome tax expenses \n (638,107) \n 2.45% \n (108,416) \n 0.39% \n (529,691) \n 488.57%\n\n  \n    \n    \n    \n    \n    \n   \n\n(Loss)/profit for the year \n (30,259,627) \n 115.99% \n 7,576,827  \n 27.23% \n (37,836,454) \n (499.37)%\n\n \n\n37\n\n \n\n \n\n*Revenue*\n\n \n\nOur total revenue decreased by US$1.7 million, or 6.24%, to US$26.1\nmillion for the fiscal year ended December 31, 2025 from US$27.8 million for the fiscal year ended December 31, 2024. The slight decline\nwas mainly driven by reduced demand for business strategy and solution consultancy services and lower loan processing fee income, which\nare included within other revenues. Despite these decreases, the Group maintained a largely consistent revenue base year-over-year.\n\n \n\nOur different revenue sources for fiscal years 2025 and 2024 were as\nfollows:\n\n \n\n  \nFor the fiscal years ended December 31 \n\n  \n2025  \n2024  \nChange \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nRevenue by service types: \n   \n   \n   \n   \n   \n  \n\nRevenue from business strategy consultancy \n 10,486,348  \n 40.20% \n 14,824,502  \n 53.28% \n (4,338,154) \n (29.26)%\n\nRevenue from technology development \n 12,935,361  \n 49.58% \n 11,412,582  \n 41.02% \n 1,522,779  \n 13.34%\n\nInterest income \n 2,285,415  \n 8.76% \n 1,214,842  \n 4.36% \n 1,070,573  \n 88.12%\n\nOthers \n 380,298  \n 1.46% \n 372,965  \n 1.34% \n 7,333  \n 1.97%\n\nTotal operating revenue \n 26,087,422  \n 100.00% \n 27,824,891  \n 100.00% \n (1,737,469) \n (6.24)%\n\n \n\n*Revenue from Business Strategy Consultancy\nServices*\n\n \n\nRevenue from business strategy consultancy services amounted to US$10.5\nmillion for the fiscal year ended December 31, 2025, representing a decrease of US$4.3 million, or approximately 29.3%, from US$14.8 million\nfor the fiscal year ended December 31, 2024. The decrease was primarily due to the completion of significant project milestones under\nongoing engagements in the prior fiscal year, while newly secured engagements were in the early stages of execution and generated lower\nrevenue during the current fiscal year.\n\n \n\n*Revenue from Technology Development, Solutions,\nand Consultancy Services*\n\n \n\nRevenue from technology development, solutions, and consultancy services\nincreased by US$1.5 million, or approximately 13.3%, from US$11.4 million for the fiscal year ended December 31, 2024 to US$12.9 million\nfor the fiscal year ended December 31, 2025. The increase was primarily attributable to the successful completion and commercialization\nof several major information technology projects, including an AI livestreaming platform, digital marketing solutions, and a gaming platform\naggregation project, which contributed significantly to revenue growth during the fiscal year ended December 31, 2025.\n\n \n\n*Revenue from Interest Income*\n\n \n\nRevenue from interest income increased by US$1.1 million, or approximately\n88.1%, from US$1.2 million for the fiscal year ended December 31, 2024 to US$2.3 million for the fiscal year ended December 31, 2025.\nThe increase was primarily attributable to the expansion of the Group’s customer loan portfolio during the fiscal year ended December\n31, 2025, which resulted in higher interest income earned compared to the prior fiscal year.\n\n \n\n38\n\n \n\n  \n\n*Revenue from Other Services*\n\n \n\nRevenue from other services, which primarily consists of loan processing\nfees and management fees, increased by US$7.3 thousand, or approximately 2.0%, from US$373.0 thousand for the fiscal year ended December\n31, 2024 to US$380.3 thousand for the fiscal year ended December 31, 2025. The increase was primarily attributable to a higher volume\nof loan processing activities, resulting in increased loan processing fee income during the year.\n\n \n\n**Other\nIncome**\n\n** **\n\nOur\nsources for other income for fiscal years 2025 and 2024 were as follows:\n\n \n\n  \nFor the fiscal years ended December 31 \n\n  \n2025  \n2024  \nChange \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nOther income: \n   \n   \n   \n   \n   \n  \n\nInterest income \n 4,908  \n 0.05% \n 4,140  \n 1.71% \n 768  \n 18.55%\n\nGain on foreign currency \n 5,928,813  \n 63.31% \n 208,335  \n 86.24% \n 5,720,478  \n 2,745.81%\n\nReversal of impairment of trade and other receivables \n 326,728  \n 3.49% \n -  \n -  \n 326,728  \n 100.00%\n\nReversal of impairment of loan receivables \n 5,780  \n 0.06% \n -  \n -  \n 5,780  \n 100.00%\n\nReimbursement income for expenses incurred \n -  \n -  \n 4,190  \n 1.73% \n (4,190) \n (100.00)%\n\nRental income \n 122,283  \n 1.31% \n -  \n -  \n 122,283  \n 100.00%\n\nCompensation for decline in share value \n 2,584,944  \n 27.60% \n -  \n -  \n 2,584,944  \n 100.00%\n\nOthers \n 391,172  \n 4.18% \n 24,926  \n 10.32% \n 366,246  \n 1,469.33%\n\nTotal \n 9,364,628  \n 100.00% \n 241,591  \n 100.00% \n 9,123,037  \n 3,776.23%\n\n  \n\nTotal other income was US$9.4 million and US$241.6 thousand for the\nfiscal years ended December 31, 2025 and 2024, respectively.\n\n \n\nThe reversal of impairment\nallowance on trade and other receivables represents amounts previously provided for during the fiscal year ended December 31, 2024 that\nwere subsequently recovered during the fiscal year ended December 31, 2025. The reversal was primarily attributable to successful collection\nefforts and improved assessments of the creditworthiness of certain customers.\n\n \n\nRental income represented\nincome earned from the subletting of office premises under rental arrangements with third parties.\n\n \n\n39\n\n \n\n \n\nCompensation for decline\nin share value increased by US$2.6 million for the fiscal year ended December 2025. The increase was primarily attributable to compensation\nreceived from a third party in connection with claims arising from AI livestreaming activities. The compensation was recognized upon the\nsettlement of the matter and represented the difference between the agreed value of shares previously issued and their prevailing market\nvalue at the time of settlement. This income was non-recurring in nature and arose from the finalization of a commercial settlement arrangement\nwith the counterparty.\n\n  \n\n**Operating Costs**\n\n \n\nThe following table sets forth the breakdown of\nour operating costs for the fiscal years ended December 31, 2025 and 2024:\n\n \n\n  \nFor the fiscal years ended December 31, \n\n  \n2025  \n2024  \nVariances \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nConsultant fee \n 1,087,392  \n 1.67% \n 2,194,536  \n 10.77% \n (1,107,144) \n (50.45)%\n\nIT expenses \n 5,660,899  \n 8.70% \n 2,408,554  \n 11.82% \n 3,252,345  \n 135.03%\n\nSubscription fee \n 8,116  \n 0.01% \n 10,892  \n 0.05% \n (2,776) \n (25.49)%\n\nReferral fee \n -  \n -  \n 181,139  \n 0.89% \n (181,139) \n (100.00)%\n\nOther cost of services \n 304  \n 0.00% \n 153,072  \n 0.75% \n (152,768) \n (99.80)%\n\nDepreciation \n 536,519  \n 0.82% \n 238,058  \n 1.17% \n 298,461  \n 125.37%\n\nAmortisation \n 955,970  \n 1.47% \n 207,989  \n 1.02% \n 747,981  \n 359.63%\n\nEmployee benefits expenses \n 17,345,345  \n 26.66% \n 6,811,397  \n 33.42% \n 10,533,948  \n 154.65%\n\nImpairment allowance on trade receivables \n 8,424,085  \n 12.95% \n 919,271  \n 4.51% \n 7,504,814  \n 816.39%\n\nImpairment allowance on loan receivables \n 31,867  \n 0.05% \n 53,252  \n 0.26% \n (21,385) \n (40.16)%\n\nRental expenses \n 112,726  \n 0.17% \n 100,530  \n 0.49% \n 12,196  \n 12.13%\n\nLegal and professional fees \n 3,546,333  \n 5.45% \n 2,608,458  \n 12.80% \n 937,875  \n 35.96%\n\nFinance cost \n 619,994  \n 0.95% \n 131,912  \n 0.65% \n 488,082  \n 370.01%\n\nOther operating expenses \n 26,744,020  \n 41.10% \n 4,362,179  \n 21.40% \n 22,381,841  \n 513.09%\n\nTotal operating costs \n 65,073,570  \n 100.00% \n 20,381,239  \n 100.00% \n 44,692,331  \n 219.28%\n\n \n\nOur operating costs as a percentage to our total revenue in the fiscal\nyear ended December 31, 2025 were consistent with fiscal year ended December 31, 2024 which were 249.4% and 73.3% respectively. The operating\ncosts increased significantly by US$44.7 million, or approximately 219.3%, from US$20.4million in fiscal year ended December 31, 2024\nto US$65.1 million in fiscal year ended December 31, 2025. The increase was due to the following major reasons:\n\n \n\n(1)\n\nConsultant fees represent the Company’s expenditures incurred\nin the provision of IPO-related consultancy services to clients. These costs include the engagement of essential professionals such as\nlegal counsel, auditors, financial consultants, and U.S. capital markets advisors. Consultant fees are directly attributable to the consultation\nservices provided to clients and are recognized as expenses in the period in which the related services are rendered.\n\n \n\nFor the fiscal year ended December 31, 2025, consultant fees amounted\nto US$1.1 million, representing a decrease of US$1.1 million, or approximately 50.5%, from US$2.2 million for the fiscal year ended December\n31, 2024. The decrease was primarily attributable to the completion of a substantial portion of work relating to client engagements in\nthe prior fiscal year, while many of the engagements secured during the fiscal year ended December 31, 2025 remained in the early stages\nof execution and therefore required lower levels of third-party professional services.\n\n \n\n40\n\n \n\n \n\n(2)\n\nIT expenses increased by US$3.3 million, or approximately 135.03%,\nfrom US$2.4 million for the fiscal year ended December 31, 2024 to US$5.7 million for the fiscal year ended December 31, 2025. The increase\nwas primarily attributable to higher technology development and digital infrastructure costs incurred in connection with the Group’s\nexpansion of its artificial intelligence initiatives, including generative AI solutions and AI digital human technologies. These expenditures\nwere made to support the enhancement of the Group’s technological capabilities, product offerings, and digital solutions platform.\n\n \n\n(3)\n\nSubscription fees decreased by US$2.8 thousand, or approximately 25.5%,\nfrom US$10.9 thousand for the fiscal year ended December 31, 2024 to US$8.1 thousand for the fiscal year ended December 31, 2025. The\ndecrease was primarily attributable to a reduction in subscriptions with a service provider that offers media monitoring, analytics, and\ninsight solutions.\n\n \n\n(4)\nReferral fees decreased from US$181.1 thousand for the fiscal year ended December 31, 2024 to nil for the fiscal year ended December 31, 2025. The decrease was primarily attributable to the Group’s reduced reliance on external referral arrangements for customer acquisition as it enhanced its direct marketing capabilities and internal lead generation channels. As a result, customer acquisition efforts were increasingly conducted in-house, eliminating the need for third-party referral services during the fiscal year ended December 31, 2025.\n\n \n\n(5)\n\nOther costs of services decreased by US$152.8 thousand, or approximately\n99.8%, from US$153.1 thousand for the fiscal year ended December 31, 2024 to US$304 for the fiscal year ended December 31, 2025. The decrease\nwas primarily attributable to the disposal of the Group’s education business in April 2024, which resulted in the absence of training\nexpenses and staff-related costs associated with the education business during the fiscal year ended December 31, 2025.\n\n \n\n(6)\n\nDepreciation expense increased by US$298 thousand, or approximately\n125.4%, from US$238.1 thousand for the fiscal year ended December 31, 2024 to US$536.5 thousand for the fiscal year ended December 31,\n2025. The increase was primarily attributable to capital expenditures incurred in connection with the expansion of the Group’s operations,\nincluding leasehold improvements to its newly leased office premises at Menara Tun Razak Exchange 106 and the acquisition of additional\ncomputer and office equipment.\n\n \n\n(7)\n\nAmortization expense increased by US$748.0 thousand or approximately\n359.6%, from US$208 thousand for the fiscal year ended December 31, 2024 to US$956.0 thousand in fiscal year ended December 31, 2025.\nThe increase was primarily attributable to the commencement of amortization of newly available-for-use intangible assets, including technology-related\nassets, following their deployment within the Group’s operations.\n\n \n\n(8)\n\nEmployee benefits expenses increased by US$10.5 million, or approximately\n154.7%, from US$6.8 million for the fiscal year ended December 31, 2024 to US$17.3 million for the fiscal year ended December 31, 2025.\nThe increase was primarily attributable to the expansion of the Group’s workforce to support business growth, resulting in a significant\nincrease in headcount, together with higher employee compensation costs, including annual salary increments and bonus provisions, and\nincreased directors’ fees across the Group’s subsidiaries.\n\n \n\n41\n\n \n\n \n\n(9)\n\nImpairment allowance on trade receivables increased by US$7.5 million,\nor approximately 816.4%, from US$919 thousand for the fiscal year ended December 31, 2024 to US$8.4 million for the fiscal year ended\nDecember 31, 2025. The increase was primarily attributable to the significant growth in the Group’s trade receivables balance resulting\nfrom higher business activity during the fiscal year, particularly within its technology consultancy and project-based service segments.\nIn accordance with the Group’s expected credit loss methodology, the higher outstanding trade receivables balance resulted in a\ncorresponding increase in the impairment allowance as of December 31, 2025.\n\n \n\nManagement believes that the overall credit quality\nof the Group’s customer portfolio remained stable during the fiscal year ended December 31, 2025, and that the increase in the impairment\nallowance primarily reflected the larger receivables portfolio, rather than a significant deterioration in customers’ creditworthiness.\n\n \n\n(10)\nImpairment allowance on loan receivables decreased by US$21.4 thousand\nfrom US$53.3 thousand for the fiscal year ended December 31, 2024 to US$31.9 thousand for the fiscal year ended December 31, 2025. The\ndecrease was primarily attributable to the disposal of the Group’s money-lending subsidiary during the year, which resulted in the\nderecognition of the underlying loan receivables and the related expected credit loss allowance. \n\n \n \n\n(11)\nRental expenses increased by US$12.2 thousand or approximately 12.1%,\nfrom US$100.5 thousand in fiscal year ended December 31, 2024 to US$112.7 thousand in fiscal year ended December 31, 2025. The increase\nwas primarily attributable to the lease of additional premises to support the Group’s expanded operations, including a showroom\nand office space for clients to access the computing power provided through the Group’s GPU infrastructure.\n\n \n \n\n(12)\nLegal and professional fees were US$3.5 million for the fiscal year\nended December 31, 2025, representing an increase of US$937.9 thousand, or approximately 36.0%, from US$2.6 million for the fiscal year\nended December 31, 2024. The increase was primarily attributable to higher legal and advisory expenses incurred in connection with fundraising\nactivities, including legal opinions, regulatory compliance work, share trading-related legal opinions and associated professional charges,\nas well as other professional services supporting the Group’s financing and capital market activities.\n\n \n \n\n(13)\nFinance costs increased by US$488.1 thousand, from US$131.9 thousand\nfor the fiscal year ended December 31, 2024 to US$620 thousand for the fiscal year ended December 31, 2025. The increase was primarily\nattributable to higher interest expense arising from convertible notes issued during the fiscal year ended December 31, 2025 to fund the\nGroup’s operations and working capital requirements.\n\n \n \n\n(14)\nOther operating expenses primarily consist of marketing expenses, staff\nwelfare, office expenses, travel expenses, secretarial fees and other miscellaneous operating expenses. Other operating expenses increased\nby US$22.4 million, from US$4.4 million in fiscal year ended December 31, 2024 to US$26.7 million in fiscal year ended December 31, 2025.\nThe increase was mainly attributable to: (i) Bad debt written off amounting to US$4.3 million which arose from management’s assessment\nthat certain outstanding receivable balances were no longer recoverable, (ii) Higher entertainment expenses of US$2.3 million to driven\ncustomer engagement, expand market reach, and enhance brand visibility, (iii) Investment loss of US$374 thousand arising from the disposal\nof quoted and unquoted equity investments (iv) Loss on disposal of subsidiaries of US$11.0 million arising from the disposal of its non-core\nbusiness during the fiscal year ended December 31, 2025. The loss represents the excess of the carrying amount of net assets disposed\nover the consideration received and is non-recurring in nature.\n\n \n\nWe expect our overall operating costs to decrease\nin the foreseeable future as a result of the disposal of certain subsidiaries during fiscal year ended December 31, 2025, which has reduced\nthe scale of the Group’s operations and its associated cost base. While we will continue to incur expenses necessary to support\nour core business activities, including marketing, personnel, and professional services, the absence of costs previously attributable\nto the disposed subsidiaries is expected to result in a lower overall level of operating expenses going forward. \n\n \n\n**Provision for Income Taxes**\n\n \n\nOur provision for income taxes was US$647.3 thousand\nin fiscal year ended December 31, 2025, which included the reversal of an over provision of income tax of US$5.1 thousand in respect of\nfiscal year ended December 31, 2024.\n\n \n\n42\n\n \n\n \n\nThe Company’s subsidiaries incorporated\nin Malaysia are subject to the income tax laws of Malaysia. Income tax provision for operations in Malaysia is calculated at the applicable\ntax rates on taxable income for the relevant periods based on existing legislation, interpretations and practices. Under the Malaysian\nIncome Tax Act 1967, the general corporate income tax rate applicable to companies incorporated in Malaysia is 24%. However, for small\nand medium-sized companies with paid-up capital of not more than RM2.5 million at the beginning of the basis period and gross business\nincome of not more than RM50 million for the relevant year of assessment, the applicable income tax rates are 15% on the first RM150,000\nof chargeable income, 17% on the next RM450,000 of chargeable income (i.e. from RM150,001 to RM600,000), and 24% on the remaining balance,\nfor each of the fiscal years ended December 31, 2025 and 2024.\n\n \n\n**Net Income/Loss**\n\n \n\nAs a result of the foregoing, we reported net\nloss of US$29.6 million for the fiscal year ended December 31, 2025, representing a decrease of US$37.3 million from a net income of US$7.6\nmillion for the fiscal year ended December 31, 2024.\n\n \n\n**Operating segment**\n\n \n\n  \nNet Profit \n\n  \n2024  \n2025 \n\n  \nUS$  \nUS$ \n\nBusiness Strategy Consultancy \n 4,553,799  \n (8,681,919)\n\nTechnology Development, Solutions and Consultancy \n 2,594,593  \n (15,037,186)\n\nInterest income \n 553,014  \n (1,655,166)\n\nOthers \n 16,707  \n (275,723)\n\nTotal \n 7,718,113  \n (25,649,994)\n\n \n\n(i)\nBusiness\nstrategy consultancy\n\n \n\nNet profit from business strategy consultancy\ndecreased by US$13.2 million, from a net profit of US$4.6 million in the fiscal year ended December 31, 2024 to a net loss of US$8.7 million\nin the fiscal year ended December 31, 2025. The decline was primarily attributable to the following factors:\n\n \n\n \na.\nRevenue from business strategy consultancy services amounted to US$10.5\nmillion for the fiscal year ended December 31, 2025, representing a decrease of US$4.3 million compared to US$14.8 million recorded in\nthe fiscal year ended December 31, 2024. The decrease was primarily driven by the timing of project execution, as major milestones were\nachieved in the prior year, whereas newly awarded engagements were at an earlier stage of completion during the current year.\n\n \n\n \nb.\nConsultant fees were US$1.1 million in fiscal year ended December 31,\n2025, a decrease of US$1.1 million as compared to US$2.2 million in fiscal year ended December 31, 2024. The decrease was primarily attributable\nto the completion of significant client work in the prior fiscal year, while engagements secured during the current fiscal year were at\nearlier stages of execution and required lower levels of third-party professional services.\n\n \n\n \nc.\nGross profit margin increased by 4.4% from 85.2% in fiscal year ended\nDecember 31, 2024 to 89.6% in fiscal year ended December 31, 2025.\n\n \n\n \nd.\nThe operating expenses were increased by US$10.0 million, or approximately\n123.9%. The increase is mainly due to (i) Director remunerations; (ii) legal and professional fees; and (iii) entertainment expenses.\n\n \n\n43\n\n \n\n \n\n(ii)\nTechnology\ndevelopment, solutions and consultancy\n\n \n\nNet profit from technology development,\nsolutions and consultancy services decreased by US$17.6 million, from a net profit of US$2.6 million in the fiscal year ended December\n31, 2024 to a net loss of US$15.0 million in the fiscal year ended December 31, 2025. The decline in segment results was primarily attributable\nto the following factors:\n\n \n\n \na.\nRevenue from our technology development, solutions, and consultancy\nservices increased by US$1.5 million, or approximately 13%, from US$11.4 million in the fiscal year ended December 31, 2024 to US$12.9\nmillion in the fiscal year ended December 31, 2025. This substantial growth was primarily driven by successful completion and commercialization\nof several major information technology projects, including an AI livestreaming platform, digital marketing solutions, and a gaming platform\naggregation project during the fiscal year.\n\n \n \n \n\n \nb.\nThe cost of services increased by US$3.1 million, or approximately\n118% due to higher technology development and digital infrastructure costs incurred in connection with the Group’s expansion of\nits artificial intelligence initiatives, including generative AI solutions and AI digital human technologies.\n\n \n \n \n\n \nc.\nGross profit margin decreased by 21.0%, from 77.2% in the fiscal year ended December 31, 2024 to 56.2% in the fiscal year ended December 31, 2025.\n\n \n \n \n\n \nd.\n\nThe operating expenses from technology development, solutions and consultancy\nservice were increased by US$16.1 million, or approximately 258.7%. The increase is mainly due to (i) Director remunerations; (ii) legal\nand professional fees; and (iii) entertainment expenses.\n\n \n\n(iii)\nInterest\nincome\n\n \n\nNet profit from interest income decreased\nby US$2.2 million, from a net profit of US$553 thousand in the fiscal year ended December 31, 2024 to a net loss of US$1.66 million in\nthe fiscal year ended December 31, 2025. The decline was primarily attributable to the following factors:\n\n \n\n \na.\nRevenue from interest income increased significantly by US$1.1 million,\nor approximately 88.1%, from US$1.2 million for the fiscal year ended December 31, 2024, to US$2.3 million for the fiscal year ended December\n31, 2025. This substantial increase was primarily driven by the expansion of the Group’s customer loan portfolio during the fiscal\nyear ended December 31, 2025, which resulted in higher interest income earned compared to the prior fiscal year.\n\n \n\n \nb.\nThe operating expenses were increased by US$3.3 million mainly due\nto (i) Director fees and remunerations; (ii) legal and professional fees; and (iii) staff costs.\n\n \n\n(iv)\nOthers\n\n \n\nNet profit from other services decreased\nby US$292 thousand, from a net profit of US$17 thousand in the fiscal year ended December 31, 2024 to a net loss of US$276 thousand in\nthe fiscal year ended December 31, 2025. The decline was primarily attributable to the following factors:\n\n \n\n \na.\nRevenue from other services, which primarily consists of loan processing\nfees and management fees, increased by US$7.3 thousand, or approximately 2%, from US$373.0 thousand for the fiscal year ended December\n31, 2024 to US$380.3 thousand for the fiscal year ended December 31, 2025. The increase was primarily attributable to a higher volume\nof loan processing activities, resulting in increased loan processing fee income during the year.\n\n \n\n \nb.\nOther costs of services decreased by US$152.8 thousand, from US$153\nthousand in fiscal year ended December 31, 2024 to US$305 in fiscal year ended December 31, 2025. The decrease was primarily attributable\nto the disposal of the Group’s education business in April 2024, which resulted in the absence of training expenses and staff-related\ncosts associated with the education business during the fiscal year ended December 31, 2025.\n\n \n\n \nc.\nGross profit margin increased by 40.9% from 59% in fiscal year ended\nDecember 31, 2024 to 99.9% in fiscal year ended December 31, 2025.\n\n \n\n \nd.\nThe operating expenses were increased by US$453 thousand, or approximately\n222.7% mainly due to (i) Director fees, (ii) legal and professional fees; and (iii) staff costs.\n\n \n\n44\n\n \n\n \n\n**Comparison\nof Results of Operations for the Fiscal Years Ended December 31, 2024 and 2023**\n\n \n\nThe following table summarizes our results of\noperations for the fiscal years ended December 31, 2024 and 2023, respectively, and provides information regarding the US$ and percentage\nincrease or (decrease) during such periods.\n\n \n\n  \n2024  \n2023  \nVariances \n\n  \nAmount  \n% of total  \nAmount  \n% of total  \nAmount  \n  \n\n  \nUS$  \nrevenue  \nUS$  \nrevenue  \nUS$  \n% \n\nRevenue \n 27,824,891  \n 100.00% \n 19,519,687  \n 98.66% \n 8,305,204  \n 42.55%\n\nRevenue – related party \n -  \n -% \n 265,061  \n 1.34% \n (265,061) \n (100.00)%\n\nTotal revenue \n 27,824,891  \n 100.00% \n 19,784,748  \n 100.00% \n 8,040,143  \n 40.64%\n\n  \n    \n    \n    \n    \n    \n   \n\nOther income \n 241,591  \n 0.87% \n 163,914  \n 0.83% \n 77,677  \n 47.39%\n\n  \n    \n    \n    \n    \n    \n   \n\nCost of services \n (4,948,193) \n 17.78% \n (3,352,149) \n 16.94% \n (1,596,044) \n 47.61%\n\n  \n    \n    \n    \n    \n    \n   \n\nDepreciation \n (238,058) \n 0.86% \n (161,887) \n 0.82% \n (76,171) \n 47.05%\n\n  \n    \n    \n    \n    \n    \n   \n\nAmortisation \n (207,989) \n 0.75% \n -  \n -  \n (207,989) \n 100.00%\n\n  \n    \n    \n    \n    \n    \n   \n\nEmployee benefits expenses \n (6,811,397) \n 24.48% \n (5,397,483) \n 27.28% \n (1,413,914) \n 26.2%\n\n  \n    \n    \n    \n    \n    \n   \n\nImpairment allowance on trade receivables \n (919,270) \n 3.30% \n (342,353) \n 1.73% \n (576,917) \n 168.52%\n\n  \n    \n    \n    \n    \n    \n   \n\nImpairment allowance on other receivables \n (53,252) \n 0.19% \n (59,317) \n 0.30% \n 6,065  \n (10.22)%\n\n  \n    \n    \n    \n    \n    \n   \n\nRental expenses \n (100,530) \n 0.36% \n (50,570) \n 0.26% \n (49,960) \n 98.79%\n\n  \n    \n    \n    \n    \n    \n   \n\nLegal and professional fees \n (2,608,458) \n 9.37% \n (1,386,774) \n 7.01% \n (1,221,684) \n 88.10%\n\n  \n    \n    \n    \n    \n    \n   \n\nFinance cost \n (131,912) \n 0.47% \n (20,175) \n 0.10% \n (111,737) \n 553.84%\n\n  \n    \n    \n    \n    \n    \n   \n\nOther operating expenses \n (4,362,179) \n 15.68% \n (2,075,468) \n 10.49% \n (2,2,86,711) \n 110.18%\n\n  \n    \n    \n    \n    \n    \n   \n\nProfit before income tax \n 7,685,243  \n 27.62% \n 7,102,486  \n 35.90% \n 582,757  \n 8.20%\n\n  \n    \n    \n    \n    \n    \n   \n\nIncome tax expenses \n (108,416) \n 0.39% \n 135,031  \n 0.68% \n (243,447) \n (180.20)%\n\n  \n    \n    \n    \n    \n    \n   \n\nProfit for the year \n 7,576,827  \n 27.23% \n 7,237,517  \n 36.58% \n 339,310  \n 4.69%\n\n \n\n45\n\n \n\n \n\n*Revenue*\n\n \n\nOur total revenue increased by US$8,040,143, or\n40.64%, to US$27,824,891 for the fiscal year ended December 31, 2024 from US$19,784,748 for the fiscal year ended December 31, 2023. The\nincrease in our revenue was primarily due to increase in revenue from technology development, solutions and consultancy services, interest\nincome from microfinancing activities.\n\n \n\nOur\ndifferent revenue sources for fiscal years 2024 and 2023 were as follows:\n\n \n\n  \nFor the fiscal years ended December 31 \n\n  \n2024  \n2023  \nChange \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nRevenue by service types: \n    \n    \n    \n    \n    \n   \n\nRevenue from business strategy consultancy \n 14,824,502  \n 53.28% \n 14,654,120  \n 74.07% \n 170,382 \n 1.16%\n\nRevenue from technology development, solutions and consultancy \n 11,412,582  \n 41.02% \n 4,472,559  \n 22.61% \n 6,940,023  \n 155.17%\n\nInterest income \n 1,214,842  \n 4.36% \n 413,354  \n 2.09% \n 801,488  \n 193.90%\n\nOthers \n 372,965  \n 1.34% \n 244,715  \n 1.23% \n 128,250  \n 52.41%\n\nTotal operating revenue \n 27,824,891  \n 100.00% \n 19,784,748  \n 100.00% \n 8,040,143  \n 40.64%\n\n \n\n*Revenue\nfrom Business Strategy Consultancy Services*\n\n \n\nRevenue from business strategy consultancy services\namounted to US$14,824,502 for the fiscal year ended December 31, 2024, representing a marginal increase compared to US$14,654,120 recorded\nin the previous year, and reflecting overall consistency in performance year over year.\n\n \n\n*Revenue\nfrom Technology Development, Solutions, and Consultancy Services*\n\n \n\nRevenue from our technology development, solutions,\nand consultancy services increased significantly by US$6,940,023, or approximately 155.17%, from US$4,472,559 in the fiscal year ended\nDecember 31, 2023 to US$11,412,582 in the fiscal year ended December 31, 2024. This substantial growth was primarily driven by the expansion\nof the Group’s technological capabilities and the launch of new projects, including generative AI solutions and AI digital human technology.\n\n \n\n*Revenue\nfrom Interest Income*\n\n \n\nRevenue from interest income increased significantly\nby US$801,488, or approximately 193.90%, from US$413,354 for the fiscal year ended December 31, 2023, to US$1,214,842 for the fiscal year\nended December 31, 2024. This substantial increase was primarily driven by the expansion of our customer loan base compared to the prior financial year.\n\n* *\n\n*Revenue\nfrom Other Services*\n\n \n\nOther revenues consist primarily of loan processing\nfees, management fees, and training fees. For the fiscal year ended December 31, 2024, other revenues amounted to US$372,965, representing\nan increase of 52.41% or US$128,250 compared to US$244,715 in the prior year. The increase was mainly attributable to higher loan processing\nfees generated from the Group’s microfinancing activities during fiscal year 2024.\n\n \n\n46\n\n \n\n \n\n**Other\nIncome**\n\n** **\n\nOur\nsources for other income for fiscal years 2024 and 2023 were as follows:\n\n** **\n\n  \nFor the fiscal years ended December 31 \n\n  \n2024  \n2023  \nChange \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nOther income: \n    \n    \n    \n    \n    \n   \n\nInterest income \n 4,140  \n 1.71% \n 1,596  \n 0.97% \n 2,544  \n 159.40%\n\nGain on foreign currency \n 208,335  \n 86.24% \n -  \n -  \n 208,335  \n 100.00%\n\nOther income – IPO Conference \n -  \n -  \n 109,592  \n 66.86% \n (109,592) \n (100.00)%\n\nReimbursement income for expenses incurred \n 4,190  \n 1.73% \n 52,726  \n 32.17% \n (48,536) \n (92.05)%\n\nOthers \n 24,926  \n 10.32% \n -  \n -  \n 24,926  \n 100.00%\n\nTotal \n 241,591  \n 100.00% \n 163,914  \n 100.00% \n 77,677  \n 47.39%\n\n \n\nOther income was US$241,591 and US$163,914 in\nfiscal year ended December 31, 2024 and 2023 respectively.\n\n \n\nReimbursement\nincome for expenses incurred in the year ended 2023 and 2024 relates to the monthly out-of-pocket expenses charged by Imej Jiwa Communications\nSdn Bhd to their clients for the investor relation services.\n\n \n\n**Operating\nCosts**\n\n \n\nThe\nfollowing table sets forth the breakdown of our operating costs for the fiscal years ended December 31, 2024 and 2023:\n\n \n\n  \nFor the fiscal years ended December 31, \n\n  \n2024  \n2023  \nVariances \n\n  \nAmount  \n%  \nAmount  \n%  \nAmount  \n% \n\n  \nUS$  \n   \nUS$  \n   \nUS$  \n  \n\nConsultant fee \n 2,194,536  \n 10.77% \n 2,413,237  \n 18.79% \n (218,701) \n (9.06)%\n\nIT expenses \n 2,408,554  \n 11.82% \n 239,426  \n 1.86% \n 2,169,128  \n 905.97%\n\nSubscription fee \n 10,892  \n 0.05% \n 30,720  \n 0.24% \n (19,828) \n (64.54)%\n\nReferral fee \n 181,139  \n 0.89% \n 552,263  \n 4.30% \n (371,124) \n (67.20)%\n\nOther cost of services \n 153,072  \n 0.75% \n 116,503  \n 0.91% \n 36,569  \n 31.39%\n\nDepreciation \n 238,058  \n 1.17% \n 161,887  \n 1.26% \n 76,171  \n 47.05%\n\nAmortisation \n 207,989  \n 1.02% \n -  \n -  \n 207,989  \n 100.00%\n\nEmployee benefits expenses \n 6,811,397  \n 33.42% \n 5,397,483  \n 42.02% \n 1,413,914  \n 26.20%\n\nImpairment allowance on trade receivables \n 919,270  \n 4.51% \n 342,353  \n 2.67% \n 576,917  \n 168.52%\n\nImpairment allowance on other receivables \n 53,252  \n 0.26% \n 59,317  \n 0.46% \n (6,065) \n (10.22)%\n\nRental expenses \n 100,530  \n 0.49% \n 50,570  \n 0.39% \n 49,960  \n 98.79%\n\nLegal and professional fees \n 2,608,458  \n 12.80% \n 1,386,774  \n 10.80% \n 1,221,684  \n 88.10%\n\nFinance cost \n 131,912  \n 0.65% \n 20,175  \n 0.16% \n 111,737  \n 553.84%\n\nOther operating expenses \n 4,362,179  \n 21.40% \n 2,075,468  \n 16.16% \n 2,286,711  \n 110.18%\n\nTotal operating\ncosts \n 20,381,238  \n 100.00% \n 12,846,176  \n 100.00% \n 7,535,062  \n 58.66%\n\n \n\n47\n\n \n\n \n\nOur operating costs as a percentage to our total revenue in the fiscal\nyear 2024 were consistent with fiscal year 2023 which were 73.25% and 64.93% respectively. The operating costs increased significantly\nby US$7,535,063, or approximately 58.66%, from US$12,846,176 in fiscal year 2023 to US$20,381,239 in fiscal year 2024. The increase was\ndue to the following major reasons:\n\n \n\n(1)\n\nConsultant\nfees represent the Company’s expenditures incurred in the provision of IPO-related\nconsultancy services to clients. These costs include the engagement of essential professionals\nsuch as legal counsel, auditors, financial consultants, and U.S. capital markets advisors.\nConsultant fees are directly attributable to the consultation services provided to clients\nand are recognized as expenses in the period in which the related services are rendered.\n\n \n\nFor the fiscal year ended December 31, 2024, consultant fees amounted\nto US$2,194,536, reflecting a marginal decrease of US$218,701 compared to US$2,413,237 in the fiscal year ended December 31, 2023. The\nGroup engaged in a comparable number of IPO projects in both fiscal years; therefore, consultant fees remained relatively consistent across\nthe periods. The slight decrease was due to the timing of project milestones and the completion of certain consultancy scopes in earlier phases.\n\n \n\n(2)\n\nIT expenses for the financial year ended 31 December 2024 amounted\nto US$2,408,554, representing an increase of US$2,169,128 or 906% compared to US$239,426 in the previous financial year.\n\n \n\nThe\nsignificant increase was primarily attributable to the Group’s strategic investment in the expansion of its technological capabilities,\nspecifically in the areas of generative artificial intelligence (AI) solutions and AI digital human technology. These initiatives\nform part of the Group’s broader innovation roadmap aimed at enhancing its product offerings, operational efficiencies, and\nmarket competitiveness.\n\n \n\n(3)\nSubscription fees decreased by US$19,828, from US$30,720 in fiscal\nyear 2023 to US$10,892 in fiscal year 2024, due to reduced subscriptions with a service provider that offers media monitoring, analytics,\nand insight solutions.\n\n \n\n(4)\n\nReferral fees amounted to US$181,139 in fiscal\nyear 2024, compared to US$552,263 in fiscal year 2023.\n\n \n\nThe\nreduction in referral fees was primarily attributable to increased direct engagement with potential customers and the adoption of\nmarketing tools to generate leads, which were then converted into customers.\n\n \n\n(5)\n\nOther costs of services increased by US$36,569, from US$116,503 in\nfiscal year 2023 to US$153,072 in fiscal year 2024.\n\n \n\nThe\nincrease was primarily attributable to higher training expenses and increased staff-related costs associated with the operations\nof the Group’s education arm during the fiscal year 2024.\n\n \n\n(6)\n\nFor the fiscal year 2024, depreciation was US$238,058, an increase\nof US$76,171 compared with US$161,887 in fiscal year 2023, primarily due to additional fixed assets acquired during the year, such as\nrenovation for our newly leased offices and campus, computer software and office equipment.\n\n \n\n(7)\nAmortization expense totaled US$207,989 for the fiscal year ended December\n31, 2024, primarily attributable to the commencement of utilisation of intangible assets within the Group’s operations\n\n \n\n(8)\nFor the fiscal year 2024, the employee benefits expenses were US$6,811,397,\na increase of US$1,413,914 compared with US$5,397,483 in fiscal year 2023. Such an increase was mainly attributable to the expansion of\nour business. The increase was mainly due to the disposal of one of our subsidiaries by the end of March 2024. (inclusive\nof Director fee cause increment)\n\n \n\n(9)\nImpairment allowance on trade receivables increased significantly US$576,918\nor approximately 168.52%, from US$342,353 in fiscal year 2023 to US$919,270 in fiscal year 2024\n\n \n\n(10)\n\nImpairment allowance on loan receivables decreased by US$6,065 or approximately\n10.22%, from US$59,317 in fiscal year 2023 to US$53,252 in fiscal year 2024.\n\n \n \n\n(11)\nRental expenses increased by US$49,960 or approximately 98.79%, from\nUS$50,570 in fiscal year 2023 to US$100,530 in fiscal year 2024 due to the additional new office in fiscal year 2024 to accommodate the\nincreasing employees.\n\n \n\n48\n\n \n\n \n\n(12)\nLegal and professional fees were US$2,608,458 in fiscal year 2024,\nrepresenting a significant increase of US$1,221,684 compared to US$1,386,774 in fiscal year 2023. This increase was primarily driven by\nmultiple fundraising activities conducted during fiscal year 2024.\n\n \n\n(13)\nFinance costs increased by US$111,737, from US$20,175 in fiscal year\n2023 to US$131,912 in fiscal year 2024, primarily due to the senior secured convertible note transaction entered into during fiscal year 2024.\n\n \n\n(14)\nOther operating expenses primarily consist of marketing expenses, staff\nwelfare, office expenses, travel expenses and secretarial fees. Other operating expenses increased by US$2,286,711, from US$2,075,468\nin fiscal year 2023 to US$4,362,179 in fiscal year 2024. The increase was mainly attributable to: (i) Loss on derecognition of subsidiaries\namounting to US$399,540, (ii) Higher marketing expenses of US$781,500 to expand customer reach and enhance brand awareness, and (iii)\nIncreased staff welfare expenses of US$486,049, primarily due to the purchase of Directors’ and employees’ medical insurance,\nas well as company events, including overseas trips and other celebrations.\n\n \n\nWe\nexpect our overall operating costs, including marketing expenses, salaries, and professional and business consulting expenses, to continue\nto increase in the foreseeable future, as we plan to hire additional personnel and incur additional expenses in connection with the expansion\nof our business operations.\n\n \n\n**Provision\nfor Income Taxes**\n\n \n\nOur provision for income taxes was US$40,902 in\nfiscal year ended December 31, 2024, primarily due to the under provision of income tax of US$135,031 in fiscal year 2023. For the subsidiaries\nthat are incorporated in Malaysia, they are governed by the income tax laws of Malaysia. The income tax provision in respect of operations\nin Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations,\nand practices. Under the Income Tax Act of Malaysia, enterprises incorporated in Malaysia are usually subject to a unified 24% enterprise\nincome tax rate, while preferential tax rates, tax holidays, and tax exemptions may be granted on a case-by-case basis. The tax rate for\nsmall and medium sized companies (generally companies incorporated in Malaysia with paid-in capital of MYR2,500,000 or less, and gross\nincome of not more than MYR50 million) is 15% for the first MYR150,000 (or approximately US$37,500) taxable income, continuously by 17%\nfor the MYR150,001 (or approximately US$37,501) to MYR600,000 (or approximately US$150,000) taxable income for the fiscal years ended\nDecember 31, 2024 and 2023, with the remaining balance being taxed at the 24% rate.\n\n** **\n\n**Net\nIncome**\n\n \n\nAs a result of the foregoing, we reported net\nincome of US$7,576,827 for the fiscal year ended December 31, 2024, representing an increase of US$339,310 from a net income of US$7,237,517\nfor the fiscal year ended December 31, 2023. \n\n \n\n**Operating\nsegment**\n\n \n\n  \nNet Profit \n\n  \n2023  \n2024 \n\n  \nUS$  \nUS$ \n\nBusiness Strategy Consultancy \n 4,773,738  \n 4,553,799 \n\nTechnology Development, Solutions and Consultancy \n 2,161,264  \n 2,594,593 \n\nInterest income \n 225,855  \n 553,014 \n\nOthers \n 73,039  \n 16,707 \n\nTotal \n 7,233,896  \n 7,718,113 \n\n \n\n(i)\nBusiness\nstrategy consultancy\n\n \n\nNet profit from business strategy consultancy\ndecreased by US$219,940 or 7.08% from US$4,773,739 in the fiscal year ended December 31, 2023 to US$4,553,799 in the fiscal year ended\nDecember 31, 2024 due to the following reasons:\n\n \n\n \na.\nRevenue from business strategy consultancy services amounted to US$14,824,502\nfor the fiscal year ended December 31, 2024, representing a marginal decrease compared to US$14,654,120 recorded in the previous year,\nand reflecting overall consistency in performance year over year.\n\n \n\n \nb.\nConsultant fees were US$2,194,536 in fiscal year 2024, an decrease\nof US$814,417 as compared to US$3,008,953 in fiscal year 2023. The decrease in consultant fees is due to the completion of substantial\nworks from the consultants of some of the on-going IPO projects in fiscal year 2023, leaving only a few remaining tasks to be completed\nin fiscal year 2024.\n\n \n\n \nc.\nGross\nprofit margin increased by 6% from 79% in 2023 to 85% in 2024.\n\n \n\n \nd.\nThe operating expenses were increased by US$1,204,739, or approximately\n14%. The increase is mainly due to (i) Director fees; (ii) legal and professional fees; and (iii) marketing expenses.\n\n \n\n49\n\n \n\n \n\n(ii)\nTechnology\ndevelopment, solutions and consultancy\n\n \n\nNet profit from technology development,\nsolutions and consultancy service increased by US$433,329 or 16.94% from US$2,161,264 in 2023 to US$2,594,593 in 2024 due to the following\nreasons:\n\n \n\n \na.\nRevenue from our technology development, solutions, and consultancy\nservices increased significantly by US$6,940,023, or approximately 148.56%, from US$4,472,559 in the fiscal year ended December 31, 2023\nto US$11,412,582 in the fiscal year ended December 31, 2024. This substantial growth was primarily driven by the expansion of the Group’s\ntechnological capabilities and the launch of new projects, including generative AI solutions and AI digital human technology.\n\n \n\n \nb.\nThe cost of services increased by US$2,318,061, or approximately 796.63%\ndue to the projects were mostly completed by our internal IT team.\n\n \n\n \nc.\nGross\nprofit margin decreased by 17%, from 94% in 2023 to 77% in 2024.\n\n \n\n \nd.\nThe operating expenses from technology development, solutions and consultancy\nservice were increased by US$4,188,633, or approximately 199%. The increase is mainly due to (i) Director fees; (ii) legal and professional\nfees; and (iii) marketing expenses.\n\n \n\n(iii)\nInterest\nincome\n\n \n\nNet profit from interest income increased\nby US$327,159 or 138.51% from US$225,855 in 2023 to US$553,014 in 2024 due to the following reasons:\n\n \n\n \na.\nRevenue from interest income increased significantly by US$801,488,\nor approximately 186.28%, from US$413,354 for the fiscal year ended December 31, 2023, to US$1,214,842 for the fiscal year ended December\n31, 2024. This substantial increase was primarily driven by the expansion of our customer loan base compared to the prior financial \n\n \n\n \nb.\nThe operating expenses were increased by US$474,329 mainly due to (i)\nDirector fees and remunerations; (ii) legal and professional fees; and (iii) staff costs.\n\n \n\n(iv)\nOthers\n\n \n\nNet profit from others decreased by\nUS$56,333 or 77.72% from US$73,040 in 2023 to US$16,707 in 2024 due to the following reasons:\n\n \n\n \na.\nOther revenues consist primarily of loan processing fees, management\nfees, and training fees. For the fiscal year ended December 31, 2024, other revenues amounted to US$372,965, representing an increase\nof 48.46% or US$128,250 compared to US$244,715 in the prior year. The increase was mainly attributable to higher loan processing fees\ngenerated from the Group’s microfinancing activities during fiscal year 2024.\n\n \n\n \nb.\n\nOther costs of services increased by US$92,400, from US$60,670 in fiscal\nyear 2023 to US$153,072 in fiscal year 2024.\n\n \n\nThe\nincrease was primarily attributable to higher training expenses and increased staff-related costs associated with the operations\nof the Group’s education arm during the fiscal year 2024.\n\n \n\n \nc.\nGross\nprofit margin significantly decreased by 16% from 75% in 2023 to 59% in 2024.\n\n \n\n \nd.\nThe operating expenses were increased by US$92,182, or approximately\n78% mainly due to (i) Director fees, (ii) legal and professional fees; and (iii) staff costs.\n\n \n\nB.\nLiquidity and Capital Resources\n\n \n\n**Cash\nFlows for the Fiscal Year Ended December 31, 2025 Compared to the Fiscal Year Ended December 31, 2024**\n\n \n\nThe\nfollowing table sets forth a summary of our cash flow for the year ended 31 December 2025 and 2024\n\n \n\n  \nFor the fiscal year ended December 31, \n\n  \n2025  \n2024 \n\nSummary Consolidated Cash Flow Data \nUS$  \nUS$ \n\nNet cash (used in)/generated from operating activities \n 2,617,790  \n 22,279,507 \n\nNet cash used in investing activities \n (72,968,649) \n (48,644,380)\n\nNet cash generated from financing activities \n 66,186,404  \n 34,528,608 \n\nNet (decrease)/increase in cash and cash equivalents \n (7,159,936) \n 7,090,444 \n\nCash and cash equivalents at the beginning of year \n 8,100,899  \n 1,010,455 \n\nCash and cash equivalents at the end of year \n 940,963  \n 8,100,899 \n\n \n\n50\n\n \n\n \n\nNet cash generated from operating activities\nin the fiscal year ended December 31, 2025 was US$2.6 million, which consists of our loss before tax of US$29.6 million as adjusted for\nnon-cash items and the effects of changes in operating assets and liabilities. Adjustments for non-cash primarily included net effects\nfrom acquisition and disposal of subsidiaries amounting to US$42.1 million, provision of allowance for expected credit losses at US$8.5\nmillion, US$6.7 million of share-based compensation awards paid to our directors and senior managements and acquisition of financial\nassets amounting to US$32.0 million. The principal items accounting for the changes in operating assets and liabilities were (i) US$16.0\nmillion of decrease in trade and other receivables, (ii) US$8.8 million of increase in trade and other payables and (iii) US$257 thousand\nof decrease in inventories.\n\n \n\n*Investing activities*\n\n \n\nNet cash used in investing activities in the fiscal\nyear ended December 31, 2025 was US$73.0 million, which was attributable to our acquisition in financial assets amounting of US$7.5 million\n, acquisition of intangible assets in a total of US$5.9 million and proceeds from disposal of subsidiaries at US$63.3 million On the other\nhand, incurred of proceeds of US$4.2 million in respect of disposal of quoted and unquoted investments.\n\n \n\n*Financing activities*\n\n \n\nNet cash generated from financing activities in\nin the fiscal year ended December 31, 2025 was US$66.2 million, which was proceeds from issuance of convertible notes at US$14.0 million,\nrepayment of finance lease liabilities at US$1.6 million, and proceeds from issuance of shares at US$53.7 million.\n\n \n\nOur principal sources of liquidity to finance our operating and investing\nactivities have been net cash provided by financing activities. As of December 31, 2025, we had US$941 thousand in cash and cash equivalents,\nOur cash and cash equivalents primarily consist of cash on hand, general bank balances and cash in share trading accounts.\n\n \n\n**Cash\nFlows for the Fiscal Year Ended December 31, 2024 Compared to the Fiscal Year Ended December 31, 2023**\n\n \n\nThe\nfollowing table sets forth a summary of our cash flow for the year ended 31 December 2024 and 2023\n\n \n\n  \nFor the fiscal year ended December 31, \n\n  \n2024  \n2023 \n\nSummary Consolidated Cash Flow Data \nUS$  \nUS$ \n\nNet cash generated from/(used in) operating activities \n 22,279,507  \n 1,151,228 \n\nNet cash (used in)/generated from investing activities \n (48,644,380) \n (3,975,259)\n\nNet cash generated/(used in) financing activities \n 34,528,608  \n 2,963,766 \n\nNet increase in cash and cash equivalents \n 7,090,444  \n 139,735 \n\nCash and cash equivalents at the beginning of year \n 1,010,455  \n 870,720 \n\nCash and cash equivalents at the end of year \n 8,100,899  \n 1,010,455 \n\n \n\nNet cash generated used in operating activities\nin 2024 was US$22.3 million, which consists of our profit before tax of US$7.7 million as adjusted for non-cash items and the effects\nof changes in operating assets and liabilities. Adjustments for non-cash primarily included professional fees paid by shares amounting\nto US$ 2.9 million, provision of allowance for expected credit losses at US$919 thousand and US$ 1.9million of share-based compensation\nawards paid to our directors and senior managements. The principal items accounting for the changes in operating assets and liabilities\nwere (i) US$12million of increase in trade and other receivables and (ii) US$4.7million of increase in trade and other payables.\n\n \n\n*Investing\nactivities*\n\n \n\nNet cash used in investing activities in 2024\nwas US$48.7 million, which was attributable to our investment in Sagtec Global Limited, Reveillon Group Limited and Marvis Inc. Additionally,\nwe have also acquired a total of US$2.3million in intangible assets.\n\n \n\n*Financing\nactivities*\n\n \n\nNet cash generated from financing activities in\n2024 was US$34.53 million, which was repayment due to advances to related parties at US$0.3 million, repayment of finance lease liabilities\nat US$161k, repayment of borrowings at US$24k, and proceeds from issuance of shares at US$35.01 million.\n\n \n\nOur principal sources of liquidity to finance\nour operating and investing activities have been net cash provided by financing activities. As of December 31, 2024, we had US$ 8.1 million\nin cash and cash equivalents, out of which US$6.30 million was held in Ringgit Malaysia and the rest was held in other currencies. Our\ncash and cash equivalents primarily consist of cash on hand, general bank balances and cash in share trading accounts.\n\n \n\n51\n\n \n\n \n\n**Off-Balance\nSheet Arrangements**\n\n \n\nWe\ndid not have any off-balance sheet arrangements as of December 31, 2025, 2024, and 2023.\n\n \n\nC.\nResearch and Development, Patents and Licenses, etc.\n\n \n\nSee\n“Item 4. Information on the Company—B. Business Overview—Intellectual Property.”\n\n \n\nD.\nTrend Information\n\n \n\nOther\nthan as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments, or events that\nare reasonably likely to have a material effect on our net revenue, income from continuing operations, profitability, liquidity, or capital\nresources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial\ncondition.\n\n \n\n**Factors\nand Trends Affecting Our Results of Operations**\n\n \n\nWe\nbelieve the following key factors may affect our financial condition and results of operations:\n\n \n\nE.\nCritical Accounting Estimates\n\n \n\nOur\ndiscussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These\nconsolidated financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting\npolicies below, and are drawn up in accordance with the provisions of the International Financial Reporting Standards (“IFRS”)\nas issued by the International Accounting Standards Board (“IASB”).\n\n \n\nHistorical\ncost is generally based on the fair value of the consideration given in exchange for goods and services.\n\n \n\nFair\nvalue is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants\nat the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating\nthe fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability which market\nparticipants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure\npurposes in these financial statements is determined on such a basis.\n\n \n\nIn\naddition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which\nthe inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,\nwhich are described as follows:\n\n \n\n \n●\nLevel\n1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement\ndate;\n\n \n\n \n●\nLevel\n2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly\nor indirectly; and\n\n \n\n \n●\nLevel\n3 inputs are unobservable inputs for the asset or liability.\n\n \n\n**Critical\nAccounting Judgements and Key Sources of Estimation Uncertainty**\n\n \n\nIn\nthe application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about\nthe carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions\nare based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.\n\n \n\nThe\nestimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period\nin which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods.\n\n \n\n52\n\n \n\n \n\n**Critical\njudgements in applying the Group’s accounting policies**\n\n \n\nThere\nare no critical judgements, apart from those involving estimation (see below) that the management has made in the process of applying\nthe Group’s accounting policy and that has the most significant effect on the amounts recognised in the financial statements.\n\n \n\n**Fair\nvalue measurement of unquoted shares**\n\n \n\nIn\ndetermining the fair value of the unquoted shares, the Company relies on the net asset values of the investee companies or independent\nvaluation report.\n\n \n\nThe\navailability of observable inputs can vary from investment to investment. For certain investments classified under Level 3 of the fair\nvalue hierarchy, the valuation could be based on models or inputs that are less observable or unobservable in the market and the determination\nof the fair values require significant judgement. Those estimated values do not necessarily represent the amounts that may be ultimately\nrealized due to occurrence of future events which could not be reasonably determined as at the balance sheet date.\n\n \n\n**Provision\nfor allowance for ECL for trade receivables, other receivables and loan receivables**\n\n \n\nThe\nCompany uses a provision matrix to calculate ECLs for trade receivables, other receivables and loan receivables. The provision rates\nare based on days past due for groupings of various customer segments that have similar loss patterns.\n\n \n\nThe\nprovision matrix is initially based on the Company’s historical observed default rates. The Company will calibrate the matrix to\nadjust historical credit loss experience with forward- looking information. At every reporting date, historical default rates are updated\nand changes in the forward-looking estimates are analysed.\n\n \n\nThe\nassessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate.\nThe amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit\nloss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.\n\n \n\n**Fair\nvalue of warrant liabilities**\n\n \n\nThe\nCompany accounts the warrants as financial liabilities in accordance with IFRS 9 Financial Instruments and IFRS 13 Fair Value Measurement,\nwhere the terms of the instruments do not meet the criteria for classification as equity under IAS 32 Financial Instruments: Presentation.\nThe warrants are not considered equity instruments because they are cash-settled and include features such as anti-dilution provisions,\nwhich prevent them from being considered as “fixed-for-fixed” equity instruments.\n\n \n\nThese\nwarrant liabilities are initially measured at fair value on the date of issuance. After initial recognition, the warrant liabilities\nare remeasured at fair value at each reporting period, with changes in fair value recognized through profit or loss in accordance with\nIFRS 9 Financial Instruments.\n\n \n\n**Trade\nand Other Receivables**\n\n \n\nA receivable is recognized when the group has\nan unconditional right to receive consideration. A right to receive consideration is unconditional if only the passage of time is required\nbefore payment of that consideration is due. If revenue has been recognized before the group has an unconditional right to receive consideration,\nthe amount is presented as a contract asset. Trade receivables that do not contain a significant financing component are initially measured\nat their transaction price. Trade receivables that contain a significant financing component and other receivables are initially measured\nat fair value plus transaction costs. All receivables are subsequently stated at amortised cost, using the effective interest method and\nincluding an allowance for credit losses. As of December 31, 2025 and 2024, the allowance for doubtful debts are US$4,548,696 and\nUS$469,101, respectively.\n\n \n\n**Revenue\nRecognition**\n\n** **\n\nRevenue\nis recognized to depict the transfer of promised services to clients at an amount that reflects the consideration to which an entity\nexpects to be entitled in exchange for those services. Specifically, the Company uses a five-step approach to recognize revenue:\n\n \n\n \n●\nStep\n1: Identify the contract(s) with a client\n\n \n\n \n●\nStep\n2: Identify the performance obligations in the contract\n\n \n\n \n●\nStep\n3: Determine the transaction price\n\n \n\n \n●\nStep\n4: Allocate the transaction price to the performance obligations in the contract\n\n \n\n \n●\nStep\n5: Recognize revenue when (or as) the Company satisfies a performance obligation\n\n \n\n53\n\n \n\n \n\nThe\nCompany recognizes revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the services underlying\nthe particular performance obligations is transferred to clients.\n\n \n\nA\nperformance obligation represents a service (or a bundle of services) that is distinct or a series of distinct services that are substantially\nthe same.\n\n \n\nControl\nis transferred overtime and revenue is recognized overtime by reference to the progress towards complete satisfaction of the relevant\nperformance obligation if one of the following criteria is met:\n\n \n\n \n●\nthe\nclient simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs;\n\n \n\n \n●\nthe\nCompany’s performance creates or enhances an asset that the client controls as the asset is created or enhanced; or\n\n \n\n \n●\nthe\nCompany’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right\nto payment for performance completed to date.\n\n \n\nOtherwise,\nrevenue is recognized at a point in time when the customer obtains control of the distinct service.\n\n \n\n \n**a)**\n**Business\nStrategy Consultancy**\n\n \n\nBusiness strategy consultancy services\nprimarily comprise listing advisory, investor relations, and boardroom strategy consulting services. Revenue from these services is generally\ngenerated under fixed-fee arrangements, whereby clients agree to pay a predetermined fee in exchange for a specified scope of professional\nservices. Clients are typically billed periodically over the contractual term in accordance with the service agreements.\n\n \n\nContracts for business strategy consultancy\nservices are generally of less than one year in duration. Revenue is recognized over time as the Company satisfies its performance obligations,\nas the customer simultaneously receives and consumes the benefits of the services provided.\n\n \n\nWhere contractual billings correspond\ndirectly with the value transferred to the customer, the Company applies the practical expedient under IFRS 15 and recognizes revenue\nin the amount to which it has a right to invoice in accordance with the contractual billing terms.\n\n \n\nFor fixed-fee contracts where the\nright-to-invoice practical expedient is not applicable, revenue is recognized over time using an input method based on costs incurred\nto date relative to the total estimated costs to complete the contract. Management considers the cost-to-cost method to faithfully depict\nthe transfer of control of the services to the customer, as costs incurred are proportionate to the Company’s performance in satisfying\nits contractual obligations.\n\n \n\n \n**b)**\n**Technology\nConsultancy**\n\n \n\nTechnology\ndevelopment, solutions and consultancy included digital development, fintech solution and software solutions.\n\n** **\n\n**Technology\nDevelopment**\n\n** **\n\nThe\ncontract is typically fixed priced and does not provide any post contract client support or upgrades. The Company designs system based\non clients’ specific needs which require the Company to perform services including design/redesign, development, and integration.\nThese services also require significant customization. Upon delivery of the services, client acceptance is generally required. The Company\nassesses that software development services is considered as one performance obligation. The duration of the development period is usually\nsix months to two years.\n\n \n\nThe\nCompany’s system development service revenues are generated primarily from contracts with clients across sectors. The contracts\ncontain negotiated billing terms which generally include multiple payment phases throughout the contract term and a portion of contract\namount usually is billed upon the completion of the related projects. Pursuant to the contract terms, the Company has enforceable right\non payments for the work performed.\n\n \n\n54\n\n \n\n \n\nThe\nCompany’s revenue from technology development contracts is generally recognized over time. The Company uses an input method based\non cost incurred as the Company believes that this method most accurately reflects the Company’s progress toward satisfaction of\nthe performance obligation, which usually takes six months to two years. Under this method, the Company could appropriately measure the\nfulfilment of a performance obligation. Assumptions, risks, and uncertainties inherent in the estimates used to measure progress could\naffect the amount of revenues, receivables, and deferred revenues at each reporting period.\n\n \n\n**Solutions\nand Consultancy**\n\n** **\n\nRevenue\nfrom solutions and consulting services is primarily comprised of fixed-fee contracts, which require the Company to provide professional\nsolutions and consulting services over contract terms beginning on the commencement date of each contract, which is the date its service\nis made available to clients. Billings to the clients are generally on a monthly or quarterly basis over the contract term, which is\ntypically 6 to 12 months. The solutions and consulting services contracts typically include a single performance obligation. The revenue\nfrom solutions and consulting services is recognized over the contract term.\n\n \n\n**Income\nTax**\n\n** **\n\nCurrent\nincome tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using\nthe tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Management periodically evaluates\npositions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers\nwhether it is probable that a tax authority will accept an uncertain tax treatment. The Group measures its tax balances either based\non the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.\n\n \n\nDeferred\nincome tax is recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts\nin the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability\nin a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.\n\n \n\nA\ndeferred income tax liability is recognized on temporary differences arising on investments in subsidiaries, associates and joint ventures,\nexcept where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary\ndifference will not reverse in the foreseeable future.\n\n \n\nA\ndeferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which\nthe deductible temporary differences and tax losses can be utilized.\n\n \n\n55\n\n \n\n \n\nDeferred\nincome tax is measured:\n\n \n\n(i)at\nthe tax rates that are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability\nis settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and\n\n \n\n(ii)based\non the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the\ncarrying amounts of its assets and liabilities except for investment properties. Investment property measured at fair value is presumed\nto be recovered entirely through sale.\n\n \n\nCurrent\nand deferred income taxes are recognized as income or expense in profit or loss, except to the extent that the tax arises from a business\ncombination or a transaction which is recognized directly in equity. Deferred tax arising from a business combination is adjusted against\ngoodwill on acquisition.\n\n \n\nThe\nGroup accounts for investment tax credits (for example, productivity and innovation credit) similar to accounting for other tax credits\nwhere a deferred tax asset is recognized for unused tax credits to the extent that it is probable that future taxable profit will be\navailable against which the unused tax credits can be utilized."}