Based on the provided financial report articles, I generated the title for the article: "Consolidated Balance Sheets and Statements of Changes in Stockholders' Equity (Deficit) for the fiscal years ended March 31, 2025 and 2026, and the period from April 1, 2024 to March 31, 2025" Please note that the title may not be exact, as the provided text is a large block of financial data and may not contain a specific title.

Critical Accounting Policies and Critical Accounting Judgments and Estimates

The Company prepared the consolidated financial statements in accordance with U.S. GAAP. These accounting principles require the Company to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each period, and the reported amounts of revenues and expenses during each period. The Company continually evaluates these judgments and estimates based on its own historical experience, knowledge and assessment of current business and other conditions, its expectations regarding the future based on available information, which together form its basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of the accounting policies require a higher degree of judgment than others in their application.

Critical accounting policies

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, including revenue recognition, contract assets, contract liabilities, mezzanine equity and income taxes, of which the details are set out in our consolidated financial statements.

Recently Accounting Pronouncements

See the discussion of the recent accounting pronouncements contained in Note 3 for the years ended March 31, 2026 and 2025 to the consolidated financial statements, “Summary of Significant Accounting Policies”.

Critical accounting estimates

You should also consider the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. The Company believes the following accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

The Company adopted the revenue standard Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.

As a professional interior design and fit-out service provider, the Company recognizes revenue based on the effort or inputs to the satisfaction of a performance obligation over time as work progresses because of the continuous transfer of control to the customer and the right to bill the customer as costs are incurred.

The Company uses the ratio of actual costs incurred to total estimated costs since costs incurred (an input method) represent a reasonable measure of progress towards the satisfaction of a performance in order to estimate the portion of revenue earned. This method faithfully depicts the transfer of value to the customer when the Company is satisfying a performance obligation that entails a number of interrelated tasks or activities for a combined output that requires the Company to coordinate the work of employees and subcontractors. Contract costs typically include direct labor, subcontract and consultant costs, materials and indirect costs related to contract performance. Changes in estimated costs to complete these obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates to be recognized in the current period. Changes in estimates can routinely occur over the contract term for a variety of reasons including, changes in scope, unanticipated costs, delays or favorable or unfavorable progress than original expectations. When the outcome of the contract cannot be reasonably measured, revenue is recognized only to the extent of contract costs incurred that are expected to be recovered. In situations where the estimated costs to perform exceeds the consideration to be received, the Company accrues the entire estimated loss during the period the loss becomes known.

Our operating subsidiary’s contracts may contain variable consideration in the form of unpriced or pending change orders or claims that either increase or decrease the contract price. Variable consideration is generally estimated using the expected value method but may from time to time be estimated using the most likely amount method depending on the circumstance. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are based upon historical experience and known trends.

Service Arrangement Settled in Digital Assets

During the year ended March 31, 2026, the Company, acting through its Hearth RWA tokenization platform, entered into the Tokenization Agreement, dated March 31, 2026, with the Real Word Asset to provide blockchain-based tokenization infrastructure and related technology services in connection with the Client’s mixed-use real estate development project located in Long Island City, New York. Under the Tokenization Agreement, the Company is entitled to a non-refundable Platform Technology Fee of $15,000,000, payable in two equal installments and settleable in U.S. dollars or in cryptocurrency.

The consideration received constitutes noncash consideration under ASC 606. Noncash consideration is measured at the fair value of the consideration received at contract inception.

The Client elected to settle the first installment of the Platform Technology Fee through the transfer of 12,500,000 PPDF on March 31, 2026. The PPDF received was issued by the customer and was established on March 25, 2026, shortly before the transfer to the Company. As of the date of receipt, the PPDF had not enough established trading history, was not traded in an active market, and was subject to significant liquidity restrictions. Based on these factors, the Company determined that the fair value of the noncash consideration received was not reliably measurable as of March 31, 2026.

Because the services had not been performed as of March 31, 2026 and the fair value of the noncash consideration was not reliably measurable, the Company has not recognized any revenue with respect to the Service Arrangement for the period. Consistent with its policy for consideration received in advance of performance, the Company recorded the arrangement as a contract liability; however, because the fair value of the consideration received could not be reliably measured, the contract liability and the related digital assets received were recorded at zero value as of March 31, 2026. Accordingly, the PPDF received is reflected in the consolidated balance sheet at zero carrying amount, and no contract liability was recognized at the $15,000,000 million stated contract value.

The Company will reassess the arrangement in subsequent periods. Revenue, and any associated remeasurement of the consideration received, will be recognized when (i) the related performance obligation is satisfied and (ii) the fair value of the consideration received becomes reliably measurable, such as upon the development of an active trading market for the PPDF or upon disposition. Any subsequent recognition could differ materially from the stated contract value, and the ultimate amount realized, if any, is subject to significant uncertainty.

Results of Operations

Comparison of Fiscal Years Ended March 31, 2026 and 2025

The following table sets forth key components of the results of operations for the years ended March 31, 2026 and 2025:

,, For the years ended March 31,,,,,,,,,,,,% of,,, ,, 2026,,,,2025,,,,Variance,,,,variance,,, Revenue,,$ 716 885,,,$,202 007,,,$,514 878,,,,254.88,%, Cost of revenue,,, 553 040,,,,113 376,,,,439 664,,,,387.79,%, Gross profit,,, 163 845,,,,88 631,,,,75 214,,,,84.86,%, Operating expenses,,,,,,,,,,,,,,,, Depreciation and amortization,,, 1 606 981,,,,-,,,,1 606 981,,,,100.00,%, Selling, general and administrative,,, 1 445 961,,,,369 991,,,,1 075 970,,,,290.81,%, Professional services,,, 2 665 876,,,,113 729,,,,2 552 147,,,,2 244.06,%, Advertising and marketing,,, 530 467,,,,20 558,,,,509 909,,,,2 480.34,%, Salaries and wages,,, 1 933 078,,,,271 568,,,,1 661 510,,,,611.82,%, Total operating expenses,,, 8 182 363,,,,775 846,,,,7 406 517,,,,954.64,%, Loss from operations,,,( 8 018 518,),,,(687 215,),,,(7 331 303,),,,1 066.81,%, Other income (expense),,,,,,,,,,,,,,,, Government subsidies,,, 9 029,,,,20 018,,,,(10 989,),,,(54.90,)%, Interest expense,,,(13 725,),,,(48 451,),,,34 726,,,,(71.67,)%, Interest income,,, 464,,,,968,,,,(504,),,,(52.07,)%, Total other income (expense), net,,,(4 232,),,,(27 465,),,,23 233,,,,(84.59,)%, Loss before income tax expense,,,(8 022 750,),,,(714 680,),,,(7 308 070,),,,1 022.57,%, Income tax expense,,,(66,),,,-,,,,66,,,,100.00,%, Net loss,,$ (8 022 816,),,$,(714 680,),,$,(7 308 136,),,,1 022.57,%,

Revenue

The following table sets forth the breakdown of the revenue by major revenue type for the years ended March 31, 2026 and 2025, respectively:

,, For the years ended March 31,,,,,,,,,,,,,,,,,,,,,, ,, 2026,,,,,,,,2025,,,,,,,,Variance,,,,,,, ,,(US$),,,,% of revenue,,,,(US$),,,,% of revenue,,,,Amount,,,,%,,, Revenue,,,,,,,,,,,,,,,,,,,,,,,, Design & Design and fit-out,,, 609 486,,,,85.02,%,,,97 440,,,,48.24,%,,,512 046,,,,525.50,%, Others,,, 107 399,,,,14.98,%,,,104 567,,,,51.76,%,,,2 832,,,,2.71,%, Total revenue,,, 716 885,,,,100.00,%,,,202 007,,,,100.00,%,,,514 878,,,,254.88,%,

The Company’s revenue increased by $514,878, or 254.88%, from $202,007 for the year ended March 31, 2025 to $716,885 for the year ended March 31, 2026, primarily due to a growth in customer demand for services during the year ended March 31, 2026. The primary reason for the increase in revenue was the fulfillment of new design, design and fit-out contracts earned in the year ended March 31, 2026. The Company expects revenue will continue to improve in the coming years along with the business environment stabilization, construction activities resume, and investment sentiment recovery.

The Company’s backlog of ongoing projects provides a certain degree of revenue stability going forward. As of March 31, 2026, the Company had 7 projects in progress with a total contract amount of $584,110 and recognized the related revenue of $35,418 up to the year ended March 31, 2026. The Company expects that such projects in progress as of March 31, 2026 will be completed and the remaining related revenue of $548,692 will be recognized during the year ending March 31, 2027. While overall market conditions remain uncertain, Due to the recovery in client activities, new projects are secured, which may support revenue growth in the coming periods.

In addition, preliminary discussions are underway regarding potential new projects and strategic collaborations, which would support revenue growth in the coming periods. The Company is expanding its footprint beyond Hong Kong into the Greater Bay Area and international markets to improve the market diversification. Efforts are also made for vertical integration across the whole project lifecycle. The Company is also focused on innovation, efficiency, and scalability, transitioning from a traditional project-based model to a subscription-based model for AI tools, real estate development and senior care infrastructure. The Company has started to implement AI-driven digital transformation to optimize design workflows and cost structures. OFA QikBIM is an AI-powered Building Information Modeling (“BIM”) platform designed to automate portions of the architectural and engineering design process, including the generation of coordinated architectural drawings, structural plans, BIM models, and related project documentation. The Company, through its Hearth RWA tokenization platform, will provide certain blockchain-based tokenization infrastructure and related technology services in connection with certain projects.

Revenue from the design, design and fit-out services increased by $512,046, or 525.50%, from $97,440 for the year ended March 31, 2025 to $609,486 for the year ended March 31, 2026. The increase was mainly due to a growth in customer demand for design and fit-out services during the year ended March 31, 2026. This exceptional growth was primarily driven by the successful execution of a major project secured in June 2025, which was substantially completed by the end of March 2026. Our revenue is subject to significant fluctuations based on the timing and completion of major projects within a given period. For example, our exceptional revenue growth for the year ended March 31, 2026 was primarily driven by the successful execution of a major commercial project secured in June 2025 and completed in March 2026, and such project-based revenue may not be indicative of future quarterly trends.

Others represent revenue from the application and project management services and increased by $2,832, or 2.71%, from $104,567 for the year ended March 31, 2025 to $107,399 for the year ended March 31, 2026. The revenue from application and project management remained relatively stable in this period.

The following table presents revenue by property type for the years ended March 31, 2026 and 2025, respectively:

,, For the years ended March 31,,,,,,,,,,,,,,,,,,,,,, ,, 2026,,,,,,,,2025,,,,,,,,Variance,,,,,,, ,,(US$),,,,% of revenue,,,,(US$),,,,% of revenue,,,,Amount,,,,%,,, Revenue,,,,,,,,,,,,,,,,,,,,,,,, Commercial,,$,698 738,,,,97.47,%,,$,80 569,,,,39.88,%,,$,618 169,,,,767.25,%, Industrial,,, 9 415,,,,1.25,%,,,37 853,,,,18.74,%,,,(28 438,),,,(75.13,)%, Institutional,,, 1 210,,,,0.16,%,,,-,,,,-,%,,,1 210,,,,100.00,%, Residential,,, 7 522,,,,1.00,%,,,74 563,,,,36.91,%,,,(67 041,),,,(89.91,)%, Lands,,,-,,,,-,%,,,9 022,,,,4.47,%,,,(9 022,),,,(100.00,)%, Total revenue,,$,716 885,,,,100.00,%,,$,202 007,,,,100.00,%,,$,514 878,,,,254.88,%,

Revenue from commercial project increased by $618,169 or 767.25%, from $80,569 for the year ended March 31, 2025 to $698,738 for the year ended March 31, 2026. The increase was primarily due to the launch of new design and fit-out projects, which resulted in an uptick in business during the year ended March 31, 2026.

Revenue from industrial projects decreased by $28,438, or 75.13%, from $37,853 for the year ended March 31, 2025 to $9,415 for the year ended March 31, 2026. This revenue decline is directly attributable to a lack of active, revenue-generating industrial projects during the year ended March 31, 2026. The completion of prior projects in the year ended March 31, 2025, coupled with a subdued pipeline for new industrial contracts in the year ended March 31, 2026, resulted in this temporary absence of activity within the industrial segment.

Revenue from institutional projects increased by $1,210, from none for the year ended March 31, 2025 to $1,210 for the year ended March 31, 2026. No institutional projects were earned in the year ended March 31, 2025.

Revenue from residential projects decreased by $67,041, or 89.91%, from $74,563 for the year ended March 31, 2025 to $7,522 for the year ended March 31, 2026. The decline was mainly due to the fewer residential projects recognized during the year ended March 31, 2026. However, the Company expects that revenue from the on-going residential segment will increase in the following year ended March 31, 2027 as work progresses and these projects reach revenue recognition milestones.

Revenue from lands projects decreased by $9,022, or 100.00%, from $9,022 for the year ended March 31, 2025 to none for the year ended March 31, 2026. There is no land project this year.

Cost of revenue

The following table sets forth the breakdown of the cost of revenue for the financial years ended March 31, 2026 and 2025:

,, For the years ended March 31,,,,,,,,,,,,,,,,,,,,,, ,, 2026,,,,,,,,2025,,,,,,,,Variance,,,,,,, ,,(US$),,,,%of cost of revenue,,,,(US$),,,,%of cost of revenue,,,,Amount,,,,%,,, Cost of revenue,,,,,,,,,,,,,,,,,,,,,,,, Subcontracting and material costs,,$,526 333,,,,95.17,%,,$,79 251,,,,69.90,%,,$,447 082,,,,564.13,%, Project staff costs,,, 26 707,,,,4.