Exhibit 99.1

Autonomous Power Corporation

Condensed Consolidated Financial Statements

As of and for the Six Months ended June 30, 2026 and June 30, 2025

AUTONOMOUS POWER CORPORATION

TABLE OF CONTENTS

AUTONOMOUS POWER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in dollars, except share amounts)

(unaudited)

See accompanying notes to the unaudited condensed consolidated financial statements

AUTONOMOUS POWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in dollars, except share amounts)

(unaudited)

See accompanying notes to the unaudited condensed consolidated financial statements

AUTONOMOUS POWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in dollars, except share amounts)

(unaudited)

See accompanying notes to the unaudited condensed consolidated financial statements

AUTONOMOUS POWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in dollars, except share amounts)

(unaudited)

See accompanying notes to the unaudited condensed consolidated financial statements

AUTONOMOUS POWER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in dollars, except share amounts)

(unaudited)

See accompanying notes to the unaudited condensed consolidated financial statements

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

1. ORGANIZATION AND BUSINESS DESCRIPTION

Autonomous Power Corporation (the “Company” or “APC”) was incorporated in Delaware on October 8, 2025. The Company was formed to acquire, develop, and operate businesses focused on autonomous systems, unmanned platforms, and related defense and industrial technology solutions.

Prior to 2026, the Company had no revenue-generating operations, and its activities consisted primarily of formation, fundraising, business development, acquisition-related activities, and other organizational activities.

On January 15, 2026, the Company acquired Tandem Defense LLC (“Tandem”), a defense technology company engaged in the design and development of unmanned aerial systems and related tactical defense solutions. The Tandem acquisition was not material to the consolidated financial statements.

On January 30, 2026, the Company acquired Kaizen Aerospace, Inc. (“Kaizen”), which manufactures and sells drone platforms and provides related drone services.

On February 20, 2026, the Company acquired Agile Autonomy LLC (“Agile”), which provides maritime autonomy and unmanned systems integration services, including the retrofitting of manned vessels into remotely operated or autonomous surface vessels, integration of unmanned aerial systems, customer-funded special projects, and related technical support. See Note 3 for further information regarding the Company’s acquisitions.

On March 8, 2026, the Company entered into an Agreement and Plan of Merger, which was amended in July 2026, with Aureus Greenway Holding, Inc. (“AGH”). The merger closed on October 1, 2026. See Note 21 for further information regarding the merger with AGH.

The accompanying consolidated financial statements include the results of operations, cash flows, assets, and liabilities of Kaizen, Agile and Tandem from their respective acquisition dates.

Unless otherwise indicated, references in these consolidated financial statements to “Autonomous Power Corporation,” the “Company,” “we,” “us,” or “our” refer to Autonomous Power Corporation and its consolidated subsidiaries, taken as a whole.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). References to applicable accounting guidance are to the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). The unaudited condensed consolidated financial statements should read in conjunction with the Company’s annual financial statements as of December 31, 2025 (Successor), the period from October 8, 2025 (inception) through December 31, 2025 (Successor), for the period from January 1, 2026 through January 30, 2026 (Predecessor) and as of and for the years ended December 31, 2024 and 2023 (Predecessor).

The unaudited condensed consolidated financial statements include the accounts of Autonomous Power Corporation and its consolidated subsidiaries. The Company consolidates entities in which it has a controlling financial interest from the date control is obtained. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements include successor and predecessor periods. The successor periods reflect the financial position, results of operations, changes in stockholders’ equity, and cash flows of Autonomous Power Corporation and its consolidated subsidiaries (the “Successor”). The predecessor periods reflect the historical financial position, results of operations, changes in stockholders’ equity, and cash flows of Kaizen prior to its acquisition by the Company (the “Predecessor”) on January 30, 2026.

The assets acquired and liabilities assumed in business combinations are recognized at their acquisition-date fair values. The results of operations and cash flows of acquired businesses are included in the unaudited condensed consolidated financial statements beginning on the date the Company obtains control. The successor and predecessor periods are presented on different bases and are not directly comparable.

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars, except for share, unless otherwise indicated.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include, but are not limited to, estimates related to revenue recognized over time, total estimated costs to complete customer contracts, the valuation and recoverability of inventory, the useful lives and recoverability of property and equipment and intangible assets, purchase accounting estimates, goodwill, the valuation allowance recorded against deferred tax assets, stock-based compensation, and the assessment of contingencies.

On the condensed consolidated balance sheets, estimates are used in determining the valuation and recoverability of assets and in determining the reported amounts of certain liabilities, all of which also impact the condensed consolidated statements of operations. Estimates are often based on judgments and assumptions that the Company believes to be reasonable but are inherently uncertain. The Company regularly evaluates estimates and assumptions using historical experience and expectations about future events. The Company adjusts estimates and assumptions when facts and circumstances indicate the need for change. Actual results could differ from those estimates.

Cash and Cash Equivalents 

Cash and cash equivalents include cash on hand, cash held in bank accounts, and highly liquid investments with original maturities of three months or less at the time of purchase. Due to their short-term nature, cash and cash equivalents are carried at cost, which approximates fair value.

Cash and cash equivalents are maintained with financial institutions, and amounts on deposit may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company did not have any restricted cash balances as of the condensed consolidated balance sheet dates presented.

Investment in Debt Securities

The Company invests excess cash in U.S. Treasury securities, corporate bonds and other debt securities. The Company classifies these investments as available-for-sale (AFS) debt securities and records them at fair value.

Investments in debt securities are measured at fair value, with unrealized gains and losses, net of any applicable tax effects, recorded in accumulated other comprehensive income (loss). Realized gains and losses from the sale or maturity of debt securities are recognized in earnings using the specific identification method. Interest income, including the amortization of premiums and accretion of discounts, is recognized using the effective interest method and is included within interest income in the accompanying condensed consolidated statements of operations.

The Company evaluates Investments in debt securities for impairment and expected credit losses in accordance with ASC 326, Financial Instruments – Credit Losses. For securities in an unrealized loss position, the Company assesses whether the decline in fair value is attributable to credit-related factors. Credit-related impairments are recognized through an allowance for credit losses with a corresponding charge to earnings, while non-credit-related changes in fair value are recognized in accumulated other comprehensive income (loss). Any allowance for credit losses is recorded through earnings and is limited to the amount by which amortized cost exceeds fair value. As of June 30, 2026, management concluded that no allowance for credit losses was required.

Investments in debt securities are presented within current assets as the Company manages these investments as part of its treasury and liquidity management activities.

Although certain investments have contractual maturities greater than one year, the Company classifies these investments as current assets because they are available to fund the Company’s current operations and liquidity requirements.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company evaluates the collectability of accounts receivable in accordance with ASC 326, Financial Instruments—Credit Losses (“ASC 326”). The allowance for credit losses is based on management’s estimate of expected credit losses over the contractual life of the receivables, considering customer-specific facts and circumstances, historical collection experience, current economic conditions, reasonable and supportable forecasts, and subsequent collections, as applicable. Accounts receivable are written off when deemed uncollectible. As of June 30, 2026, December 31, 2025 (Successor), and December 31, 2025 (Predecessor), no allowance for credit losses was recorded. During the six months ended June 30, 2026 (Successor) and 2025 (Predecessor), the Company did not write-off any accounts receivable.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, revenue, deferred revenue, and concentration of suppliers.

The Company’s accounts receivable may be concentrated among a limited number of customers due to the nature of its operations and customer contracts. In the normal course of business, the Company provides credit terms to its customers. The Company performs ongoing credit evaluations of its customers, generally does not require collateral, and considers the credit risk profile of the customer from which the receivable is due in evaluating collection risk. The Company monitors the creditworthiness of its customers and evaluates expected credit losses in accordance with ASC 326.

Customers that accounted for 10% or greater of revenue were as follows:

Customers that accounted for 10% or greater of deferred revenue were as follows:

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Concentration of Suppliers

The Company depends on suppliers, subcontractors, collaborators, and contract manufacturers for the supply of products, raw materials, components, technical services, and project-related support. The Company is dependent on certain suppliers, subcontractors, collaborators, and contract manufacturers that individually represent 10% or more of the Company’s cost of revenues. For the six months ended June 30, 2026, four vendors individually represented 10% or more of the Company’s total purchases, accounting for approximately 15%, 13%, 12%, and 12% respectively. For the six months ended June 30, 2025, two vendors individually represented 10% or more of the Company’s total purchases, accounting for approximately 15%, and 13%, respectively. Disruption from these suppliers, subcontractors, collaborators, or contract manufacturers could have a negative impact on the Company’s business, financial position, results of operations, or cash flows.

Prepaid Expenses and Other Receivables

Prepaid expenses and other receivables consist primarily of advance payments made to contract manufacturers, prepaid consulting and advisory services, and overpayments on vendor or credit card balances. These amounts are initially recorded as current assets on the condensed consolidated balance sheet and are subsequently expensed in the condensed consolidated statement of operations over the period in which the economic benefits are consumed or realized.

See Note 6 for further information regarding the Company’s prepaid expenses and other receivables.

Inventory, Net

Inventory consists of parts and finished goods held for customer projects. Inventory is accounted for in accordance with ASC 330, Inventory (“ASC 330”), and is stated at the lower of cost or net realizable value. Cost is determined using specific identification or another method that approximates cost the weighted-average cost method, as applicable to the related inventory category. Management evaluates inventory for excess, obsolete, or slow moving items based on expected usage, customer project requirements, physical condition, and other relevant factors. Adjustments to reduce inventory to net realizable value are recognized in cost of revenues in the period identified. See Note 7 for further information regarding the Company’s inventory.

Property and Equipment, Net

Property and equipment are recorded at cost, net of accumulated depreciation. Expenditures for additions and improvements that extend the useful lives of assets are capitalized, while maintenance and repair costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the condensed consolidated statement of operations.

The estimated useful lives of property and equipment are as follows:

See Note 9 for additional information regarding the Company’s property and equipment.

Intangible Assets, Net

The Company accounts for intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”). Intangible assets acquired in business combinations are recognized at their acquisition-date fair values. Intangible assets acquired in asset acquisitions are recorded based on the cost of the acquisition, including directly attributable transaction costs, and allocated to the assets acquired on a relative fair value basis in accordance with ASC 805-50, Business Combinations—Related Issues (“ASC 805-50”).

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. Amortization of customer relationships and trade names is included in operating expenses in the condensed consolidated statements of operations. Amortization of developed technology is included in cost of sales. The Company evaluates intangible assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

The estimated useful lives of the Company’s intangible assets are as follows:

See Note 10 for further information regarding the Company’s intangible assets.

Goodwill

The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”). Goodwill represents the excess of consideration transferred over the fair value of identifiable assets acquired and liabilities assumed in a business combination.

Goodwill is not amortized but is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company evaluates goodwill for impairment at the reporting unit level. As of June 30, 2026, the Company had one reporting unit for purposes of evaluating goodwill for impairment. The Company performs its annual goodwill impairment test during the fourth quarter of each fiscal year.

The Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the carrying amount of the reporting unit exceeds its fair value, or if the Company elects to bypass the qualitative assessment, the Company performs a quantitative impairment test. An impairment loss is recognized to the extent the carrying amount of a reporting unit exceeds its fair value, limited to the amount of goodwill allocated to that reporting unit. See Note 10 for further information regarding the Company’s goodwill.

Impairment of Long-lived Assets

The Company assesses long-lived assets, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”).

The Company evaluates recoverability at the asset group level by comparing the carrying amount of the asset group to the undiscounted future cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount of the asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value.

Fair Value of Certain Assets and Liabilities 

The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurement (“ASC 820”). The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and deferred acquisition consideration - related parties approximate fair value due to their short-term nature or contractual terms.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

The three levels of the fair value hierarchy are:

The fair value of the warrant liability is determined using a valuation model that incorporates assumptions including expected volatility, expected term, risk-free interest rate and other market-based inputs, as applicable. Changes in fair value are recognized in earnings in the period in which they occur.

See Note 8, Investments in Debt Securities, and Note 19, Fair Value Measurements, for additional information.

Business Combinations

The Company accounts for business combinations in accordance with ASC 805, Business Combinations (“ASC 805”). The Company recognizes identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree at their acquisition-date fair values. The excess of consideration transferred over the fair value of identifiable net assets acquired is recognized as goodwill.

The operating results of acquired businesses are included in the condensed consolidated statements of operations from the date the Company obtains control. Acquisition-related costs are expensed as incurred and included in general and administrative expenses.

The Company’s acquisition accounting may be provisional during the measurement period when information necessary to complete the accounting for a business combination is not available as of the reporting date. Measurement period adjustments are recognized in the period in which the adjustment amounts are determined, as if the accounting had been completed as of the acquisition date. The measurement period may not exceed one year from the acquisition date. See Note 3 for further information regarding the Company’s acquisitions.

Asset Acquisitions

The Company accounts for asset acquisitions in accordance with ASC 805-50, Business Combinations, Related Issues (“ASC 805-50”). Assets acquired and liabilities assumed in an asset acquisition are recognized based on the cost to the Company, including consideration transferred and directly attributable transaction costs, and are allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition.

Variable Interest Entities and Equity Method Investments

The Company evaluates its interests in legal entities to determine whether the entity is a variable interest entity (“VIE”) in accordance with ASC 810, Consolidation (“ASC 810”). The Company consolidates a VIE when it has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company accounts for investments in entities that it does not consolidate, but over which it has the ability to exercise significant influence, under the equity method of accounting in accordance with ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Under the equity method, investments are initially recorded at cost and subsequently adjusted for the Company’s share of the investee’s earnings or losses, distributions received, and impairments, if any. The Company evaluates equity method investments for impairment when events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. See Note 17 for further information regarding the Company’s investments.

Related Party

The Company identifies and discloses related party transactions in accordance with ASC 850, Related Party Disclosures (“ASC 850”). Related parties include the Company’s officers, directors, principal stockholders, affiliates, and entities under common ownership or control. See Note 18 for further information regarding the Company’s related party transactions and balances.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Debt and Notes Payable

The Company accounts for debt obligations in accordance with ASC 470, Debt (“ASC 470”). Debt obligations are initially recognized at the principal amount of proceeds received or, when issued as noncash consideration, at the fair value of the obligation incurred, net of debt discounts and debt issuance costs, as applicable. Debt issuance costs and debt discounts are presented as a direct deduction from the carrying amount of the related debt and are amortized to interest expense over the contractual term of the debt using the effective interest method.

When debt is issued with detachable instruments, the Company allocates the proceeds between the debt instrument and the detachable instruments based on the applicable accounting guidance. Amounts allocated to detachable equity-classified instruments are recorded in equity, and any resulting discount on the debt instrument is amortized to interest expense using the effective interest method.

The Company evaluates debt instruments and embedded features to determine whether any features are required to be accounted for separately as derivatives under ASC 815, Derivatives and Hedging (“ASC 815”). Embedded features that are not required to be bifurcated are accounted for together with the debt host. Debt obligations are derecognized when the obligation is extinguished, including when the Company is legally released from being the primary obligor, in accordance with ASC 405, Liabilities (“ASC 405”), and ASC 470. Gains and losses on extinguishment are recognized in the condensed consolidated statements of operations as the difference between the reacquisition price and the net carrying amount of the extinguished debt. See Note 12 for further information regarding the Company’s debt and notes payable.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on the specific terms of the warrant agreements and the applicable authoritative guidance, including ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). Equity-classified warrants are recorded in additional paid-in capital and are not remeasured after issuance.

When warrants are issued with debt or other financing instruments, the Company allocates proceeds to the warrants based on the applicable accounting guidance. Amounts allocated to equity-classified warrants are recorded in additional paid-in capital. See Note 13 for further information regarding the Company’s warrants.

Share Subscriptions

The Company accounts for share subscription proceeds in accordance with ASC 505, Equity (“ASC 505”), and considers the liability classification guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), as applicable. Cash received from investors for shares that have not been issued and remain subject to substantive closing conditions is recorded as a liability until the Company has issued the related shares and has an unconditional right to retain the proceeds. Upon issuance of the related shares, the liability is reclassified to condensed consolidated stockholders’ equity. See Note 14 for further information regarding the Company’s share subscriptions.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when, or as, control of promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The Company’s revenues are generated primarily from product sales of drone and related equipment and service revenue from consulting and technical support services, systems integration projects, and customer-funded special projects.

The Company’s contracts generally include fixed consideration specified in customer contracts or invoices. The Company does not have material arrangements with variable consideration, significant financing components, noncash consideration, or consideration payable to customers. Payment terms generally require customer payment within 30 days of invoice issuance, contract initiation, delivery of goods, or completion of services, depending on the terms of the underlying arrangement.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Product sales generally consist of drone and related equipment sales. Revenue from product sales is recognized at a point in time, generally upon delivery, when control transfers to the customer. The Company generally identifies a single performance obligation to transfer the related goods to the customer. Shipping and handling activities performed after control of a product has transferred to the customer are accounted for as fulfillment activities and not as separate performance obligations.

Service revenue generally consists of consulting, technical support, systems integration, and customer-funded project arrangements. The Company generally identifies a single performance obligation consisting of an integrated service that combines multiple interdependent activities to deliver a single overall outcome. These performance obligations are generally satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance as the services are provided. Revenue from these arrangements is recognized over time using a cost-to-cost input method. Under this method, revenue is recognized based on costs incurred to date relative to total estimated costs expected to satisfy the performance obligation.

Accounts receivable represent unconditional rights to consideration from customers. Deferred revenue represents amounts billed to or received from customers before the related performance obligations have been satisfied. Customer deposits are recorded as deferred revenue when consideration is received before control of the related goods or services is transferred to the customer. Deferred revenue is recognized as revenue when, or as, the Company transfers control of the related goods or services to the customer in accordance with ASC 606.

The Company evaluates whether it is acting as principal or agent in arrangements that involve third-party service providers or collaborators. When the Company controls the specified goods or services before they are transferred to the customer, the Company recognizes revenue on a gross basis as principal. Amounts paid to third-party service providers or collaborators are recognized as cost of revenues or capitalized as contract costs when the criteria in ASC 340-40 are met.

Product Warranty

The Company provides standard assurance-type warranties for certain product sales. These warranties generally provide customers with protection against non-conformance to agreed product specifications for a limited period following delivery. The Company accrues estimated warranty costs, if any, at the time the related revenue is recognized based on available information, including historical warranty experience, current product sales, and known warranty claims. Product warranty reserves are included in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company did not recognize a material warranty liability as of the condensed consolidated balance sheet dates presented and did not incur material warranty expense during the periods presented. See Note 4 for further information regarding the Company’s revenue, contract balances, and contract costs.

Cost of Revenues / Cost of Sales

Cost of revenues/cost of sales consists primarily of contract labor, materials and supplies, freight and shipping costs, subcontractor costs, collaborator costs, amortization of developed technology and other direct costs incurred to fulfill customer contracts. Such costs are recognized in cost of revenues as the related goods or services are transferred to the customer or as incurred when the costs do not qualify for capitalization under ASC 340-40.

Collaborative Arrangements

The Company evaluates collaborative arrangements in accordance with ASC 808, Collaborative Arrangements (“ASC 808”). Transactions with collaborative arrangement participants are accounted for based on their nature. Amounts paid to collaborators that assist the Company in fulfilling customer contracts are recognized as cost of revenues or capitalized as contract costs when the criteria in ASC 340-40 are met. Amounts received from customers are accounted for under ASC 606 when the customer obtains goods or services that are an output of the Company’s ordinary activities. See Note 5 for further information regarding the Company’s collaborative arrangement.

General and Administrative Expenses

General and administrative expenses include consulting and contractor costs, professional fees, legal costs, software subscription costs, travel, and other costs related to the Company’s formation and general operations. General and administrative expenses are recognized as incurred.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of advertising and promotional activities, public relations and investor awareness programs, trade show and marketing event costs, outbound shipping costs, business development activities, employee compensation and stock-based compensation associated with sales and marketing personnel, and other costs incurred to generate customer awareness and support revenue growth. Sales and marketing expenses are recognized as incurred.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in the design, development, testing and enhancement of the Company’s products, technologies and prototypes. Research and development expenses include prototype and engineering costs, materials and components used in development activities, outsourced engineering and consulting services, technology license fees, and costs associated with participation in research and development initiatives and competitions. Research and development costs are expensed as incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). Stock-based compensation cost is measured based on the grant-date fair value of the award and is recognized as compensation expense over the requisite service period.

For awards with service-based vesting conditions, expense is recognized on a straight-line basis over the requisite service period unless another attribution method is required. For awards with performance-based vesting conditions, expense is recognized when achievement of the performance condition becomes probable. Forfeitures are accounted for as they occur.

The fair value of stock options is estimated on the grant date using the Black-Scholes option-pricing model, which requires management to make assumptions, including the fair value of the Company’s common stock, expected term, expected volatility, risk-free interest rate, and expected dividend yield. See Note 15 for further information regarding the Company’s stock-based compensation.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities and for net operating loss carryforwards, as applicable. A valuation allowance is recorded when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Interest and penalties related to uncertain tax positions, if any, are recognized as a component of income tax expense.

The Successor is a corporation subject to U.S. federal and state income taxes. The Predecessor was treated as a pass-through entity for income tax purposes and, accordingly, its taxable income or loss was passed through to its members. The condensed consolidated financial statements do not carry forward the Predecessor’s pass-through income tax treatment for periods after the Company’s acquisition of the Predecessor. See Note 16 for further information regarding the Company’s income taxes.

Commitments and Contingencies

The Company accounts for contingencies in accordance with ASC 450, Contingencies (“ASC 450”). Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. See Note 20 for additional information regarding commitments and contingencies.

Recently Adopted and Recently Issued Accounting Standards

Recently Adopted Accounting Standards

The Company considers the applicability and impact of all accounting standards updates issued by the FASB. During the six months ended June 30, 2026, the Company adopted all accounting standards that were effective and applicable to the Company. The adoption of recently effective accounting standards did not have a material impact on the Company’s condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requires additional disclosures regarding certain natural expense categories included within relevant income statement captions. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statement disclosures.

ASU 2025-04, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, revises the guidance governing share-based payment awards granted to customers. The amendments (i) broaden the definition of a “performance condition” to explicitly encompass vesting conditions based on a customer’s purchases, (ii) eliminate the forfeiture-policy election for customer awards with service conditions, and (iii) clarify that the variable consideration constraint in ASC 606 does not apply to share-based consideration payable to a customer. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods therein. Early adoption is permitted, provided the entity applies the guidance as of the beginning of the annual period of adoption. The Company is currently evaluating the impact of this guidance and does not expect it to have a material impact on its condensed consolidated financial statements based on arrangements in effect as of June 30, 2026.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

3. BUSINESS COMBINATIONS (Successor)

Tandem acquisition

On January 15, 2026, the Company acquired all of the membership interests of Tandem for cash consideration of $500. The Tandem acquisition was not material to the condensed consolidated financial statements. The Company did not recognize any identifiable assets acquired, liabilities assumed, or goodwill in connection with the transaction, and the cash consideration was recognized in general and administrative expenses in the condensed consolidated statement of operations during the six months ended June 30, 2026.

Kaizen and Agile acquisitions

The sellers of Kaizen and Agile were related parties of the Company as a result of their indirect ownership of outstanding shares of APC prior to the respective acquisition dates. The following table summarizes the provisional consideration transferred and provisional amounts recognized for the assets acquired and liabilities assumed in connection with the Kaizen and Agile acquisitions and liabilities assumed as of the acquisition date:

The purchase price allocations are provisional and subject to change during the measurement period as the Company finalizes the valuation of acquired assets and liabilities assumed, including intangible assets, deferred revenue, working capital, and related tax impacts, if any. Measurement period adjustments, if any, will be recognized in the period in which the adjustments are determined.

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

The goodwill recognized in the Kaizen and Agile acquisitions primarily reflects the expected future benefits from the acquired workforce, expanded technology capabilities, and expected operating synergies.

The cash consideration of $1,000,000 and $2,000,000 paid upon the closings of the Kaizen and Agile acquisitions, respectively, approximated acquisition-date fair value.

The Kaizen acquisition included a contractual deferred installment of $1,000,000, payable approximately three months after closing, which was reduced by the deferred revenue assumed by the Company. The acquisition date fair value of the deferred consideration was $759,526. The Agile acquisition included a deferred installment of $2,000,000, payable approximately six months after closing, with an acquisition-date fair value of $1,906,000.

The deferred installments were valued using a present-value technique and a discount rate of 10%. The discount rate was based on an assessment of the Company’s overall risk profile and reflected implied credit risk consistent with ratings between B and CCC over the respective payment terms of approximately three months for Kaizen and six months for Agile.

The following table summarizes changes in deferred acquisition consideration during the six months ended June 30, 2026:

During the six months ended June 30, 2026, the Company settled the Kaizen deferred consideration in cash of $633,020 and a noncash settlement of a $126,506 note receivable from the Kaizen sellers to the Company, which was recognized separately from the business combination. No deferred consideration remained payable to the Kaizen sellers at June 30, 2026.

Deferred consideration of $2,000,000 remained payable to the Agile sellers at June 30, 2026 and was subsequently settled in full. See Note 21 Subsequent Events, for additional information on the payment.

The provisional identifiable intangible assets acquired in the Kaizen acquisition consist of developed technology of $1,200,000 and trade names and trademarks of $500,000. The developed technology was valued using the multi-period excess earnings method, and the trade names and trademarks were valued using the relief-from royalty method. The developed technology and trade names and trademarks are each being amortized over an estimated useful life of 10 years. The provisional identifiable intangible asset acquired in the Agile acquisition consists of trade names and trademarks of $500,000, which was valued using the relief-from-royalty method and is being amortized over an estimated useful life of 5 years. These amounts remain provisional pending completion of the related valuations. See Note 10 for additional information regarding the Company’s intangible assets.

In connection with the Kaizen acquisition, the Company paid $17,000 of transaction costs on behalf of the seller, which was included in the cash consideration transferred. The Company did not incur acquisition-related costs in connection with the Kaizen or Agile acquisitions.

4. REVENUE, AND CONTRACT BALANCES

Consolidated revenue for the six months ended June 30, 2026 (Successor) includes revenue attributable to Kaizen, Agile and Tandem beginning January 31, 2026, February 20, 2026 and January 15, 2026, respectively.

Revenue consisted of the following for the periods presented:

Product sales are generally recognized at a point in time, and service revenue is generally recognized over time. See Note 2 for further information regarding the Company’s revenue recognition policies.

Accounts receivable and contract liabilities consisted of the following:

Deferred revenue represents amounts billed to or received from customers before the related performance obligations have been satisfied. Deferred revenue - related parties as of June 30, 2026 (Successor) related to Worldwide Friends Foundation, a related party where a shareholder and a consultant of the Company serve on its board of directors. The Company expects to recognize substantially all of the deferred revenue balance as revenue during the year ending December 31, 2026 (Successor).

AUTONOMOUS POWER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2026, AND 2025

5. COLLABORATIVE ARRANGEMENT (Successor)

On October 24, 2025, the Company entered into an arrangement with Willard Marine, Inc. (“Willard”) related to a specific U.S. government boat project. Under the arrangement, the Company serves as the prime contractor and maintains the primary customer relationship, while Willard Marine, Inc. provides vessel design, manufacturing, testing expertise, personnel, facilities, and related technical capabilities.

The collaboration agreement does not create a separate legal entity. The Company recognizes revenue from the end customer in accordance with ASC 606, and amounts incurred with Willard are recognized as cost of revenues or capitalized as contract costs when the criteria for capitalization in ASC 340-40 are met.

Under the collaboration agreement, if the arrangement is dissolved or the boat project does not continue after the initial term, the Company is entitled to receive ownership of a 7-meter rigid inflatable boat owned by Willard. As of June 30, 2026, the arrangement had not been dissolved, the boat project remained ongoing, and the Company had not recognized the 7-meter rigid inflatable boat as an asset.

During the six months ended June 30, 2026 (Successor), the Company recognized no material revenue, cost of revenues, or capitalized contract costs related to the collaboration agreement.

6. PREPAID EXPENSES AND OTHER RECEIVABLES

Prepaid expenses and other receivables consisted of the following:

7. INVENTORY, NET (Successor)

Inventory, net consisted of the following: