UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
For the quarterly period ended
For the transition period from _______ to _______
Commission file number:
(FORMERLY KNOWN AS ALLIED GAMING & ENTERTAINMENT INC.)
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 4, 2026,
ALL IN FUTURETECH ALLIANCE, INC.
Index to Condensed Consolidated Financial Statements
i
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Marketable securities | ||||||||
| Interest receivable | ||||||||
| Accounts receivable | ||||||||
| Other receivable | ||||||||
| Loans receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Digital assets | ||||||||
| Intangible assets, net | ||||||||
| Land use rights, net | ||||||||
| Deposits, non-current portion | ||||||||
| Operating lease right-of-use asset | ||||||||
| Investment in unconsolidated affiliate | ||||||||
| Goodwill | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Derivative instruments | ||||||||
| Deferred revenue | ||||||||
| Operating lease liability, current portion | ||||||||
| Loans payable | ||||||||
| Total Current Liabilities | ||||||||
| Operating lease liability, non-current portion | ||||||||
| Deferred tax liability | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 12) | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Total Allied Gaming & Entertainment Inc. Stockholders’ Equity | ||||||||
| Non-controlling interest | ||||||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||||
| In-person | $ | $ | $ | $ | ||||||||||||
| Multiplatform content | ||||||||||||||||
| Casual mobile gaming | ||||||||||||||||
| Total Revenues | ||||||||||||||||
| Costs and Expenses: | ||||||||||||||||
| In-person (exclusive of depreciation and amortization) | ||||||||||||||||
| Casual mobile gaming (exclusive of depreciation and amortization) | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Selling and marketing expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Gain on lease modification | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Impairment of goodwill | ||||||||||||||||
| Impairment of long-lived assets | ||||||||||||||||
| Total Costs and Expenses | ||||||||||||||||
| Income (Loss) From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Other (expense) income, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Realized gain on investment in money market fund | ||||||||||||||||
| Gain (loss) on investment in marketable securities, derivative and short-term investments | ( | ) | ( | ) | ||||||||||||
| (Loss) gain on foreign currency transactions, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of digital assets | ( | ) | ( | ) | ||||||||||||
| Interest income, net | ||||||||||||||||
| Total Other (Expense) Income | ( | ) | ||||||||||||||
| Pre-Tax Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit | ||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) Attributable to Common Stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Income (Loss) per Common Share | ||||||||||||||||
| Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||
| Total comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Other comprehensive (income) loss attributable to non-controlling interest | ||||||||||||||||
| Comprehensive Loss Attributable to Common Stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(unaudited)
| For The Three and Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||
| All In | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | FutureTech | |||||||||||||||||||||||||||||||||||||||
| Additional | Other | Alliance Inc. | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | Stockholders’ | Controlling | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | Interest | Equity | |||||||||||||||||||||||||||||||
| Balance - January 1, 2026 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Cancellation of restricted stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net (loss) | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance - March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||||||
| Round-up share adjustment due to reverse split | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance - June 30, 2026 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| For The Three Months and Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||
| All In | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | FutureTech | |||||||||||||||||||||||||||||||||||||||
| Additional | Other | Alliance Inc. | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | Stockholders’ | Controlling | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | Interest | Equity | |||||||||||||||||||||||||||||||
| Balance - January 1, 2025 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||||||
| Common stock | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Restricted common stock | - | - | ||||||||||||||||||||||||||||||||||||||
| Stock options | - | - | ||||||||||||||||||||||||||||||||||||||
| Shares withheld for employee payroll tax | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Cumulative effect adjustment upon adoption of ASU 2023-08 | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||||||
| Common stock | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Restricted common stock | - | - | ||||||||||||||||||||||||||||||||||||||
| Stock options | - | - | ||||||||||||||||||||||||||||||||||||||
| Cancelation of common stock previously issued pursuant to a Securities Purchase Agreement | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net (loss) income | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Non-cash operating lease expense | ||||||||
| Non-cash payment of legal fees | ||||||||
| (Gain) loss on investment in short-term investments | ||||||||
| Loss on transactions denominated in foreign currency | ( | ) | ||||||
| Gain on lease modification | ( | ) | ||||||
| (Gain) loss on investment in marketable securities and derivatives | ( | ) | ||||||
| Change in fair value of digital assets | ||||||||
| Depreciation and amortization | ||||||||
| Impairment of goodwill | ||||||||
| Impairment of long-lived assets | ||||||||
| CECL reserve | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Insurance recovery receivable | ( | ) | ||||||
| Interest receivable | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Deposit | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Total Adjustments | ||||||||
| Net Cash Provided By (Used In) Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Investment in unconsolidated affiliate | ( | ) | ||||||
| Proceeds from sale of digital assets | ||||||||
| Purchase of land use rights | ( | ) | ||||||
| Proceeds from maturity of short-term investments | ||||||||
| Proceeds from early withdrawal of short-term investments | ||||||||
| Purchases of short-term investments | ( | ) | ( | ) | ||||
| Payment for investment in marketable securities | ( | ) | ||||||
| Proceeds from sale of marketable securities | ||||||||
| Issuance of loans receivable | ( | ) | ||||||
| Proceeds from repayment of loans receivable | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Net Cash Provided By (Used In) Investing Activities | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| Return of proceeds upon cancellation of common stock previously issued pursuant to a share purchase agreement | ( | ) | ||||||
| Proceeds from short-term loans | ||||||||
| Repayment of short-term loans | ( | ) | ( | ) | ||||
| Net Cash (Used In) Provided By Financing Activities | ( | ) | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ALL IN FUTURETECH ALLIANCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows, continued
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Effect of Exchange Rate Changes on Cash | ||||||||
| Net (Decrease) Increase In Cash and Cash Equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents - Beginning of Period | ||||||||
| Cash and cash equivalents - End of Period | $ | $ | ||||||
| Cash and cash equivalents consisted of the following: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Money market funds | ||||||||
| $ | $ | |||||||
| Supplemental Disclosures of Cash Flow Information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Cumulative effect adjustment upon adoption of ASU 2023-08 | $ | $ | ( | ) | ||||
| ROU assets derecognized due to lease modification | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1 – Business Organization and Nature of Operations
All in FutureTech Alliance, Inc. (formerly known as Allied Gaming & Entertainment Inc.,“AIFA” and together with its subsidiaries, the “Company”) operates a public esports and entertainment company through its wholly owned subsidiaries Allied Esports Media Inc., (“AEM”), Allied Esports International, Inc., (“AEII”), Esports Arena Las Vegas, LLC (“ESALV”), Allied Mobile Entertainment Inc. (“AME”), Allied Mobile Entertainment (Hong Kong) Limited (“AME-HK”), Allied Experiential Entertainment Inc. (“AEE”), AGAE Investment Limited, formerly known as Skyline Music Entertainment (Hong Kong) Limited (“Skyline HK”), Beijing Lianhuan Technology Co., Ltd (“BLT”), Allied Commercial Development (Hainan) Co., Ltd (“ACD”), and Banshan Daomeng (Hainan) Cultural Tourism Co., Ltd (“BDCT”). AEII produces a variety of esports and gaming-related content, including world class tournaments, live and virtual events, and original programming to continuously foster an engaged gaming community. ESALV operates HyperX Arena Las Vegas, the world’s most recognized esports facility. AME-HK is a wholly owned subsidiary of BLT and owns a
Note 2 – Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies as set forth in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on May 22, 2026.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2026, and for the three and six months ended June 30, 2026 and 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results for the full year ending December 31, 2026 or any other period. These unaudited condensed consolidated financial statements have been derived from the Company’s accounting records and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2025, filed with the SEC on May 22, 2026.
On June 12, 2026, the Company effected a reverse stock split of its common stock at a ratio of
Investments in Equity Linked, Bond Linked, and ETF Linked Notes
The Company has elected the fair value option for recording its equity linked, bond linked, and ETF linked notes (the “Notes”), pursuant to ASC 825-10, Financial Instruments (“ASC 825”), whereby the hybrid instrument is initially recorded in its entirety at fair value and changes in fair value are recorded in other income (expense) on the condensed consolidated statements of operations. The Company determines the appropriate classification of these investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company’s Notes are included in short-term investments on the Company’s balance sheet if the maturity date is less than one year from the balance sheet date.
7
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Fair Value of Financial Instruments
The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”).
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities.
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).
The following table provides information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:
| As of June 30, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Digital assets | $ | $ | $ | $ | ||||||||||||
| Cash equivalent - money market funds | ||||||||||||||||
| Marketable securities | ||||||||||||||||
| Derivative instruments | ( | ) | ( | ) | ||||||||||||
| Short-term investment - Equity linked notes | ||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
| As of December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Digital assets | $ | $ | $ | $ | ||||||||||||
| Cash equivalent - Money market funds | ||||||||||||||||
| Marketable securities | ||||||||||||||||
| Derivative instruments | ( | ) | ( | ) | ||||||||||||
| Short-term investment - Bond linked notes | ||||||||||||||||
| Short-term investment - Equity linked notes | ||||||||||||||||
| Short-term investment - US Treasury Bond | ||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
The carrying amounts of the Company’s financial instruments, such as cash equivalents, accounts receivable, short-term investments (excluding equity, ETF, and bond linked notes), other receivable, deposits - current portion, interest receivable, loans receivable, accounts payable, operating lease liabilities – current portion, accrued liabilities, and loans payable approximate fair value due to the short-term nature of these instruments.
ETF, bond, and equity linked notes are categorized within level 2 of the fair value hierarchy, as the fair value is based on the price of the underlying equity securities or foreign exchange rates. See Note 5 – Short-Term Investments for further details on short-term investments.
8
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Net Loss per Common Share
Basic loss per common share is computed by dividing net loss attributable to the Company by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the potential exercise of outstanding stock options and warrants and vesting of restricted stock awards.
The following table presents the computation of basic and diluted net loss per common share:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Common shares outstanding | ||||||||||||||||
| Less: weighted average unvested restricted shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Denominator for basic and diluted net loss per share | ||||||||||||||||
| Basic and Diluted Net Loss per Common Share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
9
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Revenue Recognition
To determine the proper revenue recognition method, the Company evaluates each of its contractual arrangements to identify its performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of the Company’s contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is therefore not distinct. Some of the Company’s contracts have multiple performance obligations, primarily related to the provision of multiple goods or services. For contracts with more than one performance obligation, the Company allocates the total transaction price in an amount based on the estimated relative standalone selling prices underlying each performance obligation.
The Company recognizes revenue primarily from the following sources:
In-person revenue
In-person revenue was comprised of the following for the three and six months ended June 30, 2026 and 2025:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Event revenue | $ | $ | $ | $ | ||||||||||||
| Sponsorship revenue | ||||||||||||||||
| Food and beverage revenue | ||||||||||||||||
| Ticket and gaming revenue | ||||||||||||||||
| Merchandising revenue | ||||||||||||||||
| Total in-person revenue | $ | $ | $ | $ | ||||||||||||
Event revenues from the rental of the ESALV arena and gaming trucks are recognized over the term of the event based on the number of days completed relative to the total days of the event, as this method best depicts the transfer of control to the customer. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming and merchandising revenues, are recognized when control of the related goods are transferred to the customer.
The Company generates sponsorship revenue from the naming rights of its esports arena which is recognized on a straight-line basis over the contractual term of the agreement.
The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed.
10
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Multiplatform revenue
Distribution revenue amounted to $
Casual mobile gaming revenue
Casual mobile gaming revenue amounted to $
The transaction price is generally the product of the advertising units delivered (e.g. impressions, click-throughs) and the contractually agreed upon price per advertising unit. The price per advertising unit can also be based on revenue share percentages stated in the contract. The number of advertising units delivered is determined at the end of each month so there is no uncertainty about the transaction price.
The Company’s casual games are played on various mobile third-party platforms for which such third parties collect monies from advertisers and remit the net proceeds after deducting payment processing fees, user acquisition cost, agent fees, and player incentive payments. The Company is primarily responsible for providing access to the games, has control over the content and functionality of games before they are accessed by players, and has the discretion to establish the pricing for the advertisements. Therefore, the Company concluded that it is the principal, and as a result, revenues are reported gross of payment processing fees and player incentive fees. Payment processing fees and player incentive fees are recorded as components of cost of revenue in the accompanying condensed consolidated statements of operations.
11
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Revenue recognition
The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues Recognized at a Point in Time: | ||||||||||||||||
| Event revenue | $ | $ | $ | $ | ||||||||||||
| Food and beverage revenue | ||||||||||||||||
| Ticket and gaming revenue | ||||||||||||||||
| Merchandising revenue | ||||||||||||||||
| Casual mobile games | ||||||||||||||||
| Distribution revenue | ||||||||||||||||
| Total Revenues Recognized at a Point in Time | ||||||||||||||||
| Revenues Recognized Over a Period of Time: | ||||||||||||||||
| Event revenue | ||||||||||||||||
| Sponsorship revenue | ||||||||||||||||
| Total Revenues Recognized Over a Period of Time | ||||||||||||||||
| Total Revenues | $ | $ | $ | $ | ||||||||||||
The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of June 30, 2026 and December 31, 2025, the Company had contract liabilities of $
Through June 30, 2026, $
12
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Concentration Risks
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, loans receivable, interest receivable, accounts receivable, other receivables, and deposits – current portion. The Company maintains cash deposits and short-term investments with major U.S. financial institutions that at various times may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. As of June 30, 2026, the Company’s two largest customers represented
During the three months ended June 30, 2026 and 2025,
During the three months ended June 30, 2026, the Company’s two largest customers accounted for
During the three months ended June 30, 2025, the Company’s three largest customers accounted for
Foreign Currency Translation
The Company’s reporting currency is the United States Dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (primarily United States Dollar, and Chinese Yuan). Yuan-denominated assets and liabilities are translated into the United States Dollar using the exchange rate at the balance sheet date (
The Company engages in foreign currency denominated transactions with customers, suppliers, investments, and financing, as well as between subsidiaries with different functional currencies. Gains (losses) gains of ($
Segment Information
Reportable segments are components of an enterprise about which separate financial information is available for evaluation by the chief operating decision maker in making decisions about how to allocate resources and assess performance. The Company’s President is the chief operating decision maker of Allied Esports, (video game events and tournaments), Z-Tech and BLT (casual mobile games) and Skyline (live concert promotion), which are reported as separate operating segments. See Note 14 – Segment Data.
13
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Subsequent Events
The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed.
Recently Issued Accounting Pronouncements
In November 2024, The FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 – 04). This update requires an entity to disclose more detailed information regarding expenses for the entity. The amendments require that at each interim and the annual reporting period, the entity must disclose amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion, and amortization recognized as part of oil and gas- producing activities. Including the amounts, the entity is required to disclose and qualitative description of the amounts remaining in relevant expense captions, and to disclose the total amount of selling expenses and the definition of selling expenses. The amendments in this update should be applied prospectively to financial statements issued for reporting periods, and retrospectively to any prior periods presented in the financials. Although early adoption is permitted, the new guidance becomes effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows.
Note 3 – Impairment of Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets, including property and equipment, definite-lived intangible assets, and right-of-use (“ROU”) assets, in accordance with ASC 360 whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Such indicators include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets, adverse changes in the business climate, or a decision to dispose of or abandon an asset group.
For purposes of evaluating recoverability, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent (the “asset group”). The Company tests the recoverability of an asset group by comparing its carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset group’s fair value.
Fair value is determined using valuation techniques consistent with the market and income approaches, as appropriate, and is based on significant unobservable inputs (Level 3), including projected future cash flows, discount rates, and assumptions regarding future market conditions. The Company’s estimates of future cash flows are based on assumptions that are consistent with its internal forecasts and strategic plans.
During the three months ended June 30, 2026, the Company identified impairment indicators related to its Z-Tech business unit asset group due to a decline in revenues and changes in market conditions. As a result, the Company performed recoverability tests for these asset groups and determined that their carrying amounts were not recoverable.
Accordingly, the Company recorded an impairment charge of approximately $
| ● | Property and equipment of $ |
| ● | Operating lease ROU assets of $ |
| ● | Definite-lived intangible assets of $ |
The fair value of the impaired asset groups was determined primarily using a discounted cash flow model, which incorporated assumptions including projected revenue growth rates, operating margins, and discount rates.
As of June 30, 2026, the carrying amount of Z-Tech’s long-lived assets was $
14
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 4 – Impairment of Goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually as of December 31st, or more frequently if events or changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value.
During the three months ended June 30, 2026, the Company identified triggering events related to its Z-Tech reporting unit, including a decline in revenues from the prior year and underperformance compared with revenue forecast. As a result, the Company performed a quantitative goodwill impairment test in accordance with ASC 350, Intangibles – Goodwill and Other.
The Company estimated the fair value of the reporting unit using the income approach, utilizing the discounted cash flow model. Significant assumptions used in the valuation included projected revenues, gross profit and EBITDA margins, discount rates and terminal growth rates, which were based on historical performance, industry trends and market conditions. These assumptions require significant management judgment and are based on management’s best estimates and assumptions regarding future operating performance and market conditions.
Based on the results of the quantitative impairment test, the carrying amount of the reporting unit exceeded its estimated fair value. Accordingly, the Company recognized a non-cash goodwill impairment charge of $
The impairment charge reduced the carrying amount of goodwill attributable to the Z-Tech reporting unit from $
The Company will continue to monitor the operating performance of its reporting units and market conditions and will perform additional interim impairment assessments if events or changes in circumstances indicate that the carrying amounts of any reporting units may not be recoverable.
Note 5 – Short-Term Investments
Short-term investments consist of the following:
| Fixed Rate | Equity Linked | Bond Linked | US Treasury | Total Short-Term | ||||||||||||||||
| Deposits | Notes | Notes | Bonds | Investments | ||||||||||||||||
| Balance, January 1, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| Purchases | ||||||||||||||||||||
| Maturing | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Early withdrawals | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Fair value adjustment | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
15
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Short-term investments include fixed rate deposits with original maturities of greater than three months but less than or equal to twelve months when purchased. Interest income on fixed rate deposits amounted to $
As of January 1, 2026, the Company had entered into two three-month equity linked notes which are investment products that provide for a coupon amount of
As of January 1, 2026, the Company had entered into three three-month bond linked notes which are investment products that provide for a coupon amount between
As of January 1, 2026, the Company had purchased a U.S. Treasury Bond (
Note 6 – Marketable Securities
On October 15, 2024, the Company purchased $
| Balance as of January 1, 2026 | $ | |||
| Purchases of marketable securities | ||||
| Proceeds from sale of marketable securities | ( | ) | ||
| Net realized/unrealized gain on marketable securities | ||||
| Foreign currency transaction adjustment | ( | ) | ||
| Balance as of June 30, 2026 | $ |
16
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 7 – Other Receivable
On August 25, 2025, AEII agreed in principle to negotiate and enter into a Project and Venue Operation & Management Agreement (the “COFCO Agreement”) with Hainan Tourism Investment Duty Free Co., Ltd. (“HTIDF”) and Bethune Capital Limited (collectively, the “Parties”) under which the Parties agreed to collaborate on the transformation of the COFCO Yalong Bay International Conference Center located in Sanya, Hainan, China into a comprehensive entertainment complex known as the Allied Esports Arena Asia (the “Project”). AEII made a $
Note 8 – Loans Receivable
On July 2, 2024, AME-HK loaned an unrelated third party
On August 14, 2024, AME-HK loaned an unrelated third party
On October 10, 2024, AME-HK entered into a $
17
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
On March 27 and March 28, 2025, two additional loans of
On April 15, 2025, AME-HK and the Facility Borrower entered into a supplementary agreement to the loan contract under which (a) AME-HK issued a new loan of $
On April 15, 2025, AME-HK and the Additional Guarantor entered into a mortgage agreement, pursuant to which the Additional Guarantor pledged an equity interest it holds as collateral for Loan 1, Loan 2, Loan 3b, Loan 4 and Loan 5.
The Company, based on ongoing conversations with the borrowers of the loans that are currently past due, has begun to prepare for the legal and other actions necessary to exercise its rights over the collateral provided by the Guarantor and the Additional Guarantor. The Company has not received the principal and default rate interest payments on all five loans since their respective maturity dates.
The following is a roll forward of the Company’s loans receivable balance during the six months ended June 30, 2026:
| Balance as of January 1, 2026 | $ | |||
| CECL allowance | ( | ) | ||
| Foreign currency transaction adjustment | ( | ) | ||
| Balance as of June 30, 2026 | $ |
For the three and six months ended June 30, 2026, the Company recorded interest income of $
The Company has not received the principal and default rate interest payments on all five loans since their respective maturity dates.
Note 9 – Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Compensation expense | $ | $ | ||||||
| Event costs | ||||||||
| Legal and professional fees (a) | ||||||||
| Other accrued expenses | ||||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||
| (a) |
18
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 10 - Derivative Instruments
The Company has entered into an equity-linked decumulator contract with a financial institution to manage exposure to certain market positions and investment strategies. The Company has also entered into over the counter ("OTC") vanilla foreign exchange ("FX") option contracts and OTC Barrier FX option contracts to manage its exposure to fluctuations in foreign currency exchange rates associated with certain forecasted transactions and foreign currency-denominated assets and liabilities. These contracts are accounted for as derivative instruments under ASC 815 and are recorded at fair value. Changes in fair value are recognized currently in earnings within other income (expense). The fair value of the decumulator contracts is estimated using valuation models that incorporate significant assumptions, including expected volatility, market price movements, contractual settlement features, and discount rates. The fair value of the Company's OTC vanilla FX option contracts and OTC Barrier FX option contracts is determined using option pricing models that incorporate the contractual terms of the options and current market data, including forward foreign exchange rates, implied exchange volatilities, and interest rate yield curves. The valuation of OTC Barrier FX options also incorporates the probability of the barrier condition being triggered over the remaining life of each contract. As of June 30, 2026, the Company recorded a derivative liability of $
Note 11 – Loans Payable
AME-HK is party to a $
On January 31, 2025, AME-HK borrowed
On March 11, 2025, AME-HK borrowed an additional
On March 28, 2025, AME-HK borrowed an additional
On June 30, 2025, AME-HK borrowed an additional
On July 23, 2025, AME-HK borrowed an additional
On September 30, 2025, AME-HK borrowed an additional
On October 23, 2025, AME-HK borrowed an additional
19
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following is a roll forward of the Company’s loans payable balance during the six months ended June 30, 2026:
| Balance as of January 1, 2026 | $ | |||
| Additional borrowings under credit facility | ||||
| Repayment of borrowings | ( | ) | ||
| Foreign currency transaction adjustment | ( | ) | ||
| Balance as of June 30, 2026 | $ |
Interest expense incurred on the Company’s loans payable during the three and six months ended June 30, 2026 was $
Note 12 – Commitments and Contingencies
Litigations, Claims, and Assessments
The Company is periodically involved in various disputes, claims, liens and litigation matters arising out of the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Frank Ng
On October 4, 2023, Frank Ng, the former Chief Executive Officer of the Company, filed an arbitration demand with the American Arbitration Association alleging that the Company failed to make approximately $
Thereafter, Frank Ng filed a complaint in the Superior Court of California, County of Orange, asserting arbitration-related and breach of contract claims arising from the same underlying dispute. On June 12, 2026, the court granted in part the Company’s motion to compel arbitration and stayed the court proceedings pending completion of the arbitration. The arbitration has resumed, and the Company has asserted counterclaims against Mr. Ng. A hearing on the merits is scheduled for January 2027. The matter remains pending.
Since the Company is unable to reasonably estimate the amount of the loss, or range of loss, related to the Frank Ng matter, no accrual for this contingency has been included in the accompanying consolidated financial statements.
20
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Operating Leases
The Company’s aggregate lease expense incurred during the three months ended June 30, 2026 and 2025 amounted to $
The Company’s aggregate lease expense incurred during the six months ended June 30, 2026 and 2025 amounted to $
A summary of the Company’s right-of-use assets and liabilities is as follows:
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows used in operating activities | $ | $ | ||||||
| Right-of-use assets obtained in exchange for lease obligations | ||||||||
| Operating leases | $ | $ | ||||||
| Weighted Average Remaining Lease Term (Years) | ||||||||
| Operating leases | ||||||||
| Weighted Average Discount Rate | ||||||||
| Operating leases | % | % | ||||||
A summary of the Company’s remaining operating lease liabilities as of June 30, 2026 is as follows:
| For the Years Ending December 31, | Amount | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total lease payments | ||||
| Less: amount representing imputed interest | ( | ) | ||
| Present value of lease liability | ||||
| Less: current portion | ( | ) | ||
| Lease liability, non-current portion | $ | |||
21
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Lease Modification
In June 2026, the Company entered into an amendment to its operating lease agreement for its Esports arena in Las Vegas, Neveda. Under the amended lease, all remaining fixed minimum rental payments were eliminated and replaced with variable lease payments equal to a specified percentage of Gross Sales, as defined in the lease agreement.
The amendment was evaluated under ASC 842, Leases, and accounted for as a lease modification. Upon the effective date of the amendment, the Company derecognized the existing operating lease liability and the related right-of-use asset associated with the fixed lease payments. As a result, the Company recognized a gain of approximately $
Following the modification, lease payments based on a percentage of Gross Sales are accounted for as variable lease payments and are recognized in lease expense in the period in which the underlying sales occur. These variable payments are not included in the measurement of the operating lease liability or right-of-use asset under ASC 842.
Note 13 – Stockholders’ Equity
Restricted Common Stock
On March 27, 2026, the Board of Directors approved the grant of
For the three months and six months ended June 30, 2026, the Company recorded $
Note 14 – Segment Data
Each of the Company’s business segments offer different, but synergistic products and services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
The Company’s business consists of
| ● | Esports, provided through Allied Esports, including video game events and tournaments. |
| ● | Casual mobile gaming, provided through ZTech. |
| ● | Live concert promotion and events organizing, provided through Skyline. |
22
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
The Company’s significant segment revenue and expenses for the three and six months ended June 30, 2026 and 2025 are as follows:
| For the Three Months Ended June 30, 2026 | For the Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||
| E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | |||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||
| In-person | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Multiplatform content | ||||||||||||||||||||||||||||||||||||||||
| Casual mobile gaming | ||||||||||||||||||||||||||||||||||||||||
| Total Revenue | ||||||||||||||||||||||||||||||||||||||||
| Costs and Expenses | ||||||||||||||||||||||||||||||||||||||||
| In-person (excludes depreciation) | ||||||||||||||||||||||||||||||||||||||||
| Casual mobile gaming (excludes depreciation) | ||||||||||||||||||||||||||||||||||||||||
| Professional fees | ||||||||||||||||||||||||||||||||||||||||
| Salaries and benefits | ||||||||||||||||||||||||||||||||||||||||
| Selling and marketing expense | ||||||||||||||||||||||||||||||||||||||||
| Other expenses [1] | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||||||
| Gain on lease modification | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | ||||||||||||||||||||||||||||||||||||||||
| Impairment of long-lived assets | ||||||||||||||||||||||||||||||||||||||||
| Research and development expense | ||||||||||||||||||||||||||||||||||||||||
| Total Expense | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| All other segment items (2) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Consolidated pre-tax income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
23
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
| For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||
| E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | |||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||
| In-person | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Multiplatform content | ||||||||||||||||||||||||||||||||||||||||
| Casual mobile gaming | ||||||||||||||||||||||||||||||||||||||||
| Total Revenue | ||||||||||||||||||||||||||||||||||||||||
| Costs and Expenses | ||||||||||||||||||||||||||||||||||||||||
| In-person (excludes depreciation) | ||||||||||||||||||||||||||||||||||||||||
| Casual mobile gaming (excludes depreciation) | ||||||||||||||||||||||||||||||||||||||||
| Professional fees | ||||||||||||||||||||||||||||||||||||||||
| Salaries and benefits | ||||||||||||||||||||||||||||||||||||||||
| Selling and marketing expense | ||||||||||||||||||||||||||||||||||||||||
| Other expenses [1] | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||||||
| Gain on lease modification | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | ||||||||||||||||||||||||||||||||||||||||
| Impairment of long-lived assets | ||||||||||||||||||||||||||||||||||||||||
| Research and development expense | ||||||||||||||||||||||||||||||||||||||||
| Total Expense | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| All other segment items (2) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Consolidated pre-tax income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||
| (1) |
| (2) |
24
All in FutureTech Alliance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
The Company’s significant segment assets as of June 30, 2026 and December 31, 2025 are as follows:
| As of June 30, 2026 | As of December 31, 2025 | |||||||||||||||||||||||||||||||||||||||
| E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | E-sports | Casual Mobile Gaming | Concerts | Corporate | Total | |||||||||||||||||||||||||||||||
| Total assets for reportable segments: | ||||||||||||||||||||||||||||||||||||||||
| Goodwill and intangible assets, net | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Property and equipment, net | ||||||||||||||||||||||||||||||||||||||||
| Other segment assets (1) | ||||||||||||||||||||||||||||||||||||||||
| Total consolidated assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
The Company’s assets by geographic location are as follows:
| As of | ||||||||
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Total assets by geographic location: | ||||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Total consolidated assets | $ | $ | ||||||
The Company’s disaggregated revenues by geographic location for the three and six months ended June 30, 2026 and 2025 are as follows:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Total revenues by geographic location: | ||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| China | ||||||||||||||||
| Total consolidated revenues | $ | $ | $ | $ | ||||||||||||
25
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Statements
The following discussion and analysis of the results of operations and financial condition of ALL IN FUTURETECH ALLIANCE, INC. (the “Company”) as of June 30,2026 and for the three and six months ended June 30, 2026 and 2025 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2025, which are included in the Form 10-K (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on May 22, 2026. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company and its subsidiaries. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” in our Annual Report, and other factors that we may not know. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements above, to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
The Company
All In FutureTech Alliance, Inc. (formerly known as Allied Gaming & Entertainment Inc.), together with its subsidiaries (“AIFA” or the “Company”), currently operates an experiential entertainment business and a casual mobile gaming business. The Company’s existing operations and revenue sources continue to be derived primarily from in-person esports and entertainment activities, including events conducted at HyperX Arena Las Vegas and through mobile arena operations, and from casual mobile games that generate advertising and related platform revenue.
During 2026, the Company changed its name to All In FutureTech Alliance, Inc. and began pursuing a strategic transformation toward a future-technology platform built around two principal areas: an AI infrastructure network supported by optical communications and digital infrastructure, and an AI application-services matrix. The Company has announced initiatives involving cross-border fiber-optic networks, submarine-cable capacity, silicon-photonics-enabled computing and data infrastructure, AI education, AI-enabled content and creator-economy applications.
As part of this strategy, the Company has entered into agreements and initiated additional arrangements relating to a proposed controlling investment in HyalRoute Communication Group Limited and has announced planning activities for AI compute and digital-infrastructure projects in Hainan. The Company has also announced proposed integrations involving Aivolution Venture, Co-Intelligence Academy and LittleVault Traffic Holdings Ltd., including AI training, knowledge-content distribution, creator-economy and AI-enabled course initiatives. These transactions and initiatives are at various stages of negotiation, approval, implementation or integration and remain subject to applicable conditions and risks.
Notwithstanding these strategic initiatives, as of June 30, 2026 and through the date of this report, the Company’s existing consolidated operating businesses and principal sources of revenue had not materially changed from its experiential entertainment and casual mobile gaming operations. The announced technology, infrastructure, education and content initiatives have not yet resulted in a material change to the Company’s consolidated revenue sources. The Company intends to continue operating its existing businesses while evaluating and implementing its strategic transformation in a disciplined manner.
26
Results of Operations
Our operations consist of our esports gaming operations, casual mobile games and live entertainment events organizing. Our esports gaming operations take place at global competitive esports properties designed to connect players and fans via a network of connected arenas. Through our subsidiaries, we offer esports fans state-of-the-art facilities to compete against other players in esports competitions, host live events with esports superstars that potentially stream to millions of viewers worldwide and produce and distribute esports content at our on-site production facilities and studios. At our flagship arena in Las Vegas, Nevada, we provide an attractive facility for hosting a diverse range of events, including corporate events, tournaments, game launches, and brand activation. Furthermore, we boast a mobile esports arena, an 18-wheel semi-trailer, which seamlessly transforms into a top-tier esports arena and competition stage or a dynamic live show arena complete with full content production capabilities and an interactive talent studio.
Results of Operations for the Three Months Ended June 30, 2026 and 2025
| For the Three Months Ended | ||||||||||||
| June 30, | Favorable | |||||||||||
| (in thousands) | 2026 | 2025 | (Unfavorable) | |||||||||
| Revenues: | ||||||||||||
| In-person | $ | 813 | $ | 1,161 | $ | (348 | ) | |||||
| Multiplatform content | - | - | - | |||||||||
| Casual mobile gaming | 435 | 758 | (324 | ) | ||||||||
| Total Revenues | 1,248 | 1,919 | (672 | ) | ||||||||
| Costs and Expenses: | ||||||||||||
| In-person (exclusive of depreciation and amortization) | 450 | 618 | 167 | |||||||||
| Casual mobile gaming (exclusive of depreciation and amortization) | 339 | 736 | 397 | |||||||||
| Research and development expenses | 38 | 167 | 129 | |||||||||
| Selling and marketing expenses | 9 | 82 | 72 | |||||||||
| General and administrative expense | 3,636 | 6,019 | 2,383 | |||||||||
| Gain on lease modification | (3,446 | ) | - | 3,446 | ||||||||
| Depreciation and amortization | 214 | 390 | 176 | |||||||||
| Impairment of goodwill | 920 | - | (920 | ) | ||||||||
| Impairment of long-lived assets | 1,358 | - | (1,358 | ) | ||||||||
| Total Costs and Expenses | 3,519 | 8,011 | 4,492 | |||||||||
| Loss From Operations | (2,271 | ) | (6,092 | ) | 3,821 | |||||||
| Other Income (Expense): | ||||||||||||
| Other (expense) income, net | (19 | ) | (56 | ) | 37 | |||||||
| Realized gain on investment in money market fund | - | 20 | (20 | ) | ||||||||
| Gain (loss) on investment in marketable securities, derivatives, and short-term investments | (627 | ) | 788 | (1,415 | ) | |||||||
| Gain (loss) on foreign currency transactions, net | (224 | ) | (536 | ) | 312 | |||||||
| Change in fair value of digital assets | 9 | 28 | (19 | ) | ||||||||
| Interest income, net | 1,190 | 1,015 | 175 | |||||||||
| Total Other Income (Expense) | 329 | 1,258 | (929 | ) | ||||||||
| Pre-Tax Loss | (1,942 | ) | (4,834 | ) | 2,892 | |||||||
| Income tax benefit | - | - | - | |||||||||
| Net Loss | $ | (1,942 | ) | $ | (4,834 | ) | $ | 2,892 | ||||
27
Revenues
In-person experience revenues decreased by approximately $0.3 million to approximately $0.8 million for the three months ended June 30, 2026 from approximately $1.2 million for the three months ended June 30, 2025. The decrease in event revenue is primarily attributable to the number of events held during 2026 versus the quantity of such events in the prior year.
Casual mobile gaming revenue was $0.4 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively. The decrease in casual mobile games revenue was primarily due to contraction of the online card game market as well as increasing competition from new mobile game developers.
Costs and expenses
In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.2 million to approximately $0.5 million for the three months ended June 30 2026 from approximately $0.6 million for the three months ended June 30, 2025. The decrease is the result of the costs associated with third party events held at the arena during 2026 compared to 2025.
Casual mobile gaming costs (exclusive of depreciation and amortization) were $0.3 million for the three months ended June 30, 2026 and $0.7 million for the three months ended June 30, 2025, respectively, resulting from a decrease in user incentive, user acquisition and other costs directly associated with the decline in revenues.
Research and development expenses were $38 thousand and $167 thousand for the three months ended June 30, 2026 and 2025, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for Z-Tech.
Selling and marketing expenses decreased by approximately $72 thousand to approximately $9 thousand for the three months ended June 30, 2026 from approximately $82 thousand for the three months ended June 30, 2025.
General and administrative expenses decreased by approximately $2.4 million, or 40%, to approximately $3.6 million for the three months ended June 30, 2026, from approximately $6.0 million for the three months ended June 30, 2025. The decrease in general and administrative expenses resulted primarily from a $2.9 million decrease in legal and professional fees principally incurred in connection with a complaint filed by a dissident stockholder along with a proxy contest between the Company and such stockholder, a $0.3 million decrease in decrease in audit, tax and financial reporting fees, a $0.2 million decrease in directors’ and officers’ insurance costs, as well as a $0.2 million decrease in salaries and related costs. These decreases were partially offset by a $0.6 million CECL allowance on the Company’s loans receivable, a $0.2 million payment under a strategic cooperation agreement, which represented a significant first step in the Company’s planned development into a leading global fiber optic communication, computing power, and AI-enabled services provider, and a $0.5 million charge to operations for various M&A related consulting and advisory services.
Gain on lease modification was approximately $3.4 million for the three months ended June 30, 2026, compared to $0.0 million for the three months ended June 30, 2025. The gain relates an amendment to one of the Company’s operating lease agreements under which its fixed minimum rental payments were entirely replaced with variable lease payments equal to a specified percentage of gross sales, as defined.
Depreciation and amortization decreased by approximately $176 thousand to approximately $214 thousand for the three months ended June 30, 2026, from approximately $390 thousand for the three months ended June 30, 2025.
Impairment of goodwill was approximately $0.9 million for the three months ended June 30, 2026, compared to $0.0 million for the three months ended June 30, 2025. The impairment resulted from management’s determination that the fair value of one of its reporting units was less than its carrying amount.
Impairment of long-lived assets was approximately $1.4 million for the three months ended June 30, 2026, compared to $0.0 million for the three months ended June 30, 2025. The impairment resulted from management’s determination that the fair value of these assets was less than their carrying amounts.
Loss on investment in marketable securities and derivatives
The Company recognized a loss of $0.6 million on its investments in marketable securities and certain derivative instruments during the three months ended June 30, 2026, due to the change in the fair value of these investments during the period. During the three months ended June 30, 2025, the Company recognized a gain of $0.8 million on its investments in marketable securities. There were no investments in derivative instruments during the three months ended June 30, 2025.
28
Loss on foreign currency transactions, net
The gain (loss) on foreign currency transactions was approximately ($0.2) million and ($0.5) million for the three months ended June 30, 2026 and 2025, respectively These gains and losses result from changes in the exchange rate of the Japanese Yen to United States Dollar between the dates certain loans payable were borrowed, the dates certain loans receivable were issued, and the dates certain equity linked notes, bond linked notes, ETF linked notes, and foreign securities were purchased and their remeasurements on June 30, 2026 and 2025.
Interest income, net
Interest income, net, was approximately $1.2 million for the three months ended June 30, 2026, compared to approximately $1.0 million for the three months ended June 30, 2025. The increase is a result of the interest earned on fixed term deposits and equity, bond, and ETF linked notes, as well as interest earned on loans receivable during the periods.
Results of Operations for the Six Months Ended June 30, 2026 and 2025
| For the Six-Months Ended | ||||||||||||
| June 30, | Favorable | |||||||||||
| (in thousands) | 2026 | 2025 | (Unfavorable) | |||||||||
| Revenues: | ||||||||||||
| In-person | $ | 1,865 | $ | 2,818 | $ | (952 | ) | |||||
| Multiplatform content | - | - | - | |||||||||
| Casual mobile gaming | 936 | 1,377 | (441 | ) | ||||||||
| Total Revenues | 2,801 | 4,195 | (1,394 | ) | ||||||||
| Costs and Expenses: | ||||||||||||
| In-person (exclusive of depreciation and amortization) | 780 | 1,478 | 698 | |||||||||
| Casual mobile gaming (exclusive of depreciation and amortization) | 827 | 1,319 | 492 | |||||||||
| Research and development expenses | 246 | 348 | 102 | |||||||||
| Selling and marketing expenses | 20 | 122 | 101 | |||||||||
| General and administrative expense | 7,423 | 11,500 | 4,077 | |||||||||
| Gain on lease modification | (3,446 | ) | - | 3,446 | ||||||||
| Depreciation and amortization | 462 | 772 | 310 | |||||||||
| Impairment of goodwill | 920 | - | (920 | ) | ||||||||
| Impairment of long-lived assets | 1,358 | - | (1,358 | ) | ||||||||
| Total Costs and Expenses | 8,592 | 15,538 | 6,947 | |||||||||
| Loss From Operations | (5,791 | ) | (11,344 | ) | 5,553 | |||||||
| Other Income (Expense): | ||||||||||||
| Other (expense) income, net | (19 | ) | (32 | ) | 13 | |||||||
| Realized gain on investment in money market fund | - | 386 | (386 | ) | ||||||||
| Gain (loss) on investment in marketable securities, derivatives, and short-term investments | (2,261 | ) | 513 | (2,774 | ) | |||||||
| (Loss) on foreign currency transactions, net | (1,179 | ) | (1,101 | ) | (78 | ) | ||||||
| Change in fair value of digital assets | (55 | ) | (35 | ) | (20 | ) | ||||||
| Interest income, net | 2,127 | 1,879 | 248 | |||||||||
| Total Other Income (Expense) | (1,387 | ) | 1,610 | (2,997 | ) | |||||||
| Pre-Tax Loss | (7,177 | ) | (9,734 | ) | 2,557 | |||||||
| Income tax benefit | - | - | - | |||||||||
| Net Loss | $ | (7,177 | ) | $ | (9,734 | ) | $ | 2,557 | ||||
29
In-person experience revenues decreased by approximately $0.9 million, or 34%, to approximately $1.9 million for the six months ended June 30, 2026, from approximately $2.8 million for the six months ended June 30, 2025. The decrease in event revenue is primarily attributable to the number of events held during 2026 versus the quantity of such events in the prior year.
Casual mobile gaming revenue was $0.9 million for the six months ended June 30, 2026 and $1.4 million for the six months ended June 30, 2025, respectively. The decrease in casual mobile games revenue was primarily due to the contraction of the online card game market as well as increasing competition from new mobile game developers.
Costs and expenses
In-person costs (exclusive of depreciation and amortization) decreased by approximately $0.7 million, or 47%, to approximately $0.8 million for the six months ended June 30, 2026 from approximately $1.5 million for the six months ended June 30, 2025. The decrease is the result of the costs associated with third party events held at the arena during the six months ended June 30, 2026, compared to the six months ended June 30, 2025.
Casual mobile gaming costs (exclusive of depreciation and amortization) were $0.8 million for the six months ended June 30, 2026 and $1.3 million for the six months ended June 30, 2025, respectively, resulting from a decrease in user incentive, user acquisition and other associated with the decline in revenues.
Research and development expenses were $246 thousand and $348 thousand for the six months ended June 30, 2026 and 2025, respectively. Research and development expenses consist principally of costs related to the development of new casual mobile games for Z-Tech.
Selling and marketing expenses decreased by approximately $101 thousand to approximately $20 thousand for the six months ended June 30, 2026 from approximately $122 thousand for the six months ended June 30, 2025.
General and administrative expenses decreased by approximately $4.1 million, or 36%, to approximately $7.4 million for the six months ended June 30, 2026, from approximately $11.5 million for the six months ended June 30, 2025. The decrease in general and administrative expenses resulted primarily from a $5.1 million decrease in legal and other professional fees principally incurred in connection with a complaint filed by a dissident stockholder along with a proxy contest between the Company and such stockholder, a $0.2 million decrease in share-based compensation, a $0.3 million decrease in audit, tax and financial reporting fees, a $0.6 million decrease increase in salaries and related costs, a $0.1 million decrease in rent expense, as well as a $0.3 million decrease in directors’ and officers’ insurance costs. These decreases were partially offset by a $1.3 million CECL allowance on the Company’s loans receivable, $0.9 million in payments made under a strategic cooperation agreement, which represented a significant first step in the Company’s planned development into a leading global fiber optic communication, computing power, and AI-enabled services provider, and a $0.5 million charge to operations for various M&A related consulting and advisory services.
Gain on lease modification was approximately $3.4 million for the six months ended June 30, 2026, compared to $0.0 million for the six months ended June 30, 2025. The gain relates an amendment to one of the Company’s operating lease agreements under which its fixed minimum rental payments were entirely replaced with variable lease payments equal to a specified percentage of gross sales, as defined.
Depreciation and amortization decreased by approximately $0.3 million to approximately $0.5 million for the six months ended June 30, 2026, from approximately $0.8 million for the six months ended June 30, 2025. The decrease was mainly due to the impairment of certain property and equipment at December 31, 2025.
Impairment of goodwill was approximately $0.9 million for the six months ended June 30, 2026, compared to $0.0 million for the six months ended June 30, 2025. The impairment resulted from management’s determination that the fair value of one of its reporting units was less than its carrying amount.
Impairment of long-lived assets was approximately $1.4 million for the six months ended June 30, 2026, compared to $0.0 million for the six months ended June 30, 2025. The impairment resulted from management’s determination that the fair value of these assets was less than their carrying amounts.
30
Other (expense) income, net
We recognized other non-operating expense, net of approximately $19 thousand during the six months ended June 30, 2026, compared to $32 thousand of other non-operating expense, net, recorded for the six months ended June 30, 2025, representing a decrease in other expense, net of $13 thousand.
Loss on investment in marketable securities and derivatives
The Company recognized a loss of $2.3 million on its investments in marketable securities and certain derivative instruments during the six months ended June 30, 2026, due to the change in the fair value of these investments during the period. During the six months ended June 30, 2025, the Company recognized a gain of $513 thousand on its investments in marketable securities. There were no investments in derivative instruments during the six months ended June 30, 2025.
(Loss) gain on foreign currency transactions, net
The loss on foreign currency transactions was approximately $1.2 million for the six months ended June 30, 2026, compared to $1.1 million loss for the six months ended June 30, 2025. The increase in loss is a result of changes in the exchange rate of the Japanese Yen to United States Dollar between the dates certain loans payable were borrowed, the dates certain loans receivable were issued, and the dates certain equity linked notes, bond linked notes, ETF linked notes and foreign securities were purchased and the June 30, 2026 and 2025 remeasurement date.
Interest income, net
Interest income, net, was approximately $2.1 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. Interest income is a result of the interest earned on fixed term deposits and equity, bond, and ETF linked notes, as well as interest earned on loans receivable during the period.
Liquidity and Capital Resources
The following table summarizes our total current assets, current liabilities and working capital at June 30, 2026 and December 31, 2025, respectively:
| June 30, | December 31, | |||||||
| (in thousands) | 2026 | 2025 | ||||||
| Current Assets | $ | 52,073 | $ | 76,776 | ||||
| Current Liabilities | $ | 30,886 | $ | 49,589 | ||||
| Working Capital Surplus | $ | 21,187 | $ | 27,187 | ||||
Our primary sources of liquidity and capital resources have been cash and short-term investments on the balance sheet, including the funds received through the sale of World Poker Tour.
As of June 30, 2026, we had cash and cash equivalents of approximately $10.4 million (not including $18.7 million of short-term investments and $0.4 million of marketable securities) and working capital of approximately $21.2 million.
Cash requirements for our current liabilities include approximately $14.0 million for loans payable, approximately $13.6 million in the aggregate for accounts payable and accrued expenses, and approximately $0.1 million for the current portion of an operating lease liability. Cash requirements for non-current liabilities include approximately $0.1 million for the non-current portion of an operating lease liability. The Company intends to meet these cash requirements from its current cash, investments and loan receivable balances.
31
Cash Flows from Operating, Investing and Financing Activities
The table below summarizes cash flows for the six months ended June 30, 2026 and 2025:
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (3,017 | ) | $ | (3,074 | ) | ||
| Investing activities | $ | 20,015 | $ | (34,087 | ) | |||
| Financing activities | $ | (18,400 | ) | $ | 956 | |||
Net Cash Used in Operating Activities
Net cash used in operating activities for the six months ended June 30, 2026 was approximately $3.0 million and net cash used in operating activities for the six months ended June 30, 2025 was approximately $3.1 million, representing a decreased usage of $0.1 million.
During the six months ended June 30, 2026 and 2025, the net cash used in operating activities, respectively, was primarily attributable to the net loss of approximately $7.2 million and $9.7 million, respectively, adjusted for approximately $3.0 million and $2.8 million, respectively, of net non-cash expenses, and approximately $1.2 million and $3.9 million, respectively, of cash generated by changes in the levels of operating assets and liabilities.
Net Cash Provided By (Used In) Investing Activities
Net cash provided by investing activities for the six months ended June 30, 2026 was approximately $20.0 million, which consisted of $54.3 million in proceeds from the maturity of short-term investments, $3.1 million in proceeds from the sale of marketable securities, $57.6 million in proceeds from the early withdrawal of short-term investments, and $0.2 in proceeds from the sale of digital assets, partially offset by $93.2 million used for the purchase of short-term investments and $2.0 million used for the purchase of marketable securities.
Net cash used in investing activities for the six months ended June 30, 2025 was approximately $34.1 million, which consisted of $127.5 million used for the purchase of short-term investments, $10.6 million used for loans receivable, $1.7 million used for the purchase of land use rights, and $2.5 million used for the investment in a unconsolidated affiliate, partially offset by $102.4 million in proceeds from the maturing of short-term investments, $4.5 million from proceeds from the repayment of short-term loans, and $1.2 million from proceeds from the sale of marketable securities.
Net Cash Provided By Financing Activities
Net cash used in financing activities during the six months ended June 30, 2026, was approximately $18.4. million, consisting entirely of the repayment of short-term loans.
Net cash provided by financing activities during the six months ended June 30, 2025 was approximately $1.0 million, which consisted of $30.2 million in proceeds from short-term loans, which is partially offset by a repayment of short-term loans of 22.7 million and payment upon cancellation of common stock previously issued of $6.6 million.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
32
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider accounting for income taxes, impairment of long-lived assets, impairment of goodwill and current expected credit loss on loans receivable to be critical accounting estimates. There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Effectiveness of Disclosure Controls and Procedures
As previously disclosed, Mr. Weizhi (Eric) Shao was appointed as the Company’s Chief Executive Officer effective June 17, 2026. As of the date of this Quarterly Report, Mr. Yangyang Li, the Company’s President, has primary responsibility for the Company’s overall executive management. Accordingly, although Mr. Li holds the title of President, he is serving as the Company’s principal executive officer for purposes of this Quarterly Report and is executing the certifications required under Exchange Act Rules 13a-14(a) and 13a-14(b).
Our management, under the direction of our President, who is serving as our principal executive officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on this evaluation our management, including the Company’s President and Chief Financial Officer, has concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026 to ensure that the information required to be disclosed in our Exchange Act reports was recorded, processed, summarized and reported on a timely basis.
Inherent Limitations on Effectiveness of Controls
Even assuming the effectiveness of our controls and procedures, our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error or all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. In general, our controls and procedures are designed to provide reasonable assurance that our control system’s objective will be met, and our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures are effective at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls in future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2026, there were no changes in our internal control over financial reporting that have affected, or are reasonably likely to materially affect, our internal control over financial reporting.
33
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Frank Ng
On October 4, 2023, Frank Ng, the former Chief Executive Officer of the Company, filed an arbitration demand with the American Arbitration Association alleging that the Company failed to make approximately $1.0 million in payments allegedly due under certain Restricted Stock Unit and separation agreements. The arbitration was subsequently held in abeyance due to nonpayment of arbitration fees.
Thereafter, Mr. Ng filed a complaint in the Superior Court of California, County of Orange, arising from the same underlying dispute. On June 12, 2026, the court granted in part the Company’s motion to compel arbitration and stayed the court proceedings pending completion of the arbitration. The arbitration has resumed, and the Company has asserted counterclaims against Mr. Ng. A hearing on the merits is scheduled for January 2027. The matter remains pending.
For additional information, see Note 12, “Commitments and Contingencies,” to the accompanying condensed consolidated financial statements.
ITEM 1A. RISK FACTORS.
In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by Part II, Item 1A, “Risk Factors,” of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and the Company’s other filings with the Securities and Exchange Commission. Except as otherwise disclosed in this report, there have been no material changes to those risk factors.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
10b5-1 Arrangements
To the best of the Company’s knowledge during the second quarter ended June 30, 2026, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act) of the Company
34
ITEM 6. EXHIBITS.
| * | Filed herewith |
| ** | Furnished herewith |
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ALL IN FUTURETECH ALLIANCE, INC. | ||
| Dated: August 14, 2026 | By: | /s/ Yangyang Li |
| Yangyang Li, President | ||
| (Principal Executive Officer) | ||
| Dated: August 14, 2026 | By: | /s/ Roy Anderson |
| Roy Anderson, Chief Financial Officer | ||
| (Principal Financial Officer) | ||
36