10-K: ModuLink Reports 2025 Loss Amid Strategic Shift & Growth Plans

ModuLink Inc. reported a significant net loss for 2025, driven by operational expansion and business combination costs, while outlining strategic shifts towards design and project management services and an AI robotics acquisition.

Summary

• ModuLink Inc. is a Nevada holding company with operations primarily in Hong Kong and Australia, focusing on property development using Modular Integrated Construction (MiC), Air-to-Water (A2W) technology, and Internet of Things (IoT) property management.
• The company reported a net loss of $1,270,120 for the year ended December 31, 2025, a significant increase from $283,378 in 2024.
• Revenue increased by approximately 216% to $1,294,549 in 2025 from $409,342 in 2024, primarily due to a new design and build services project in Hong Kong.
• Cost of services rose to $1,226,786 in 2025 from $349,179 in 2024, consistent with revenue growth.
• General and administrative expenses surged to $1,304,707 in 2025 from $298,675 in 2024, attributed to subsidiary expansion and professional fees related to business combinations.
• Net cash used in operating activities was $1,236,551 in 2025, compared to $345,193 in 2024.
• The company had a working capital deficit of $112,961 as of December 31, 2025, a deterioration from a surplus of $126,004 in 2024.
• Accumulated deficit reached $4,119,851 as of December 31, 2025.
• A proposed acquisition of a 60% equity interest in ASA Robotics Limited for approximately $641,026 (HKD 5,000,000) through preferred stock issuance has been delayed to finalize capital restructuring and governance arrangements.
• The company's ability to continue as a going concern is dependent on continued financial support from stockholders and related parties, and the successful acquisition of additional capital.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period for ModuLink, marked by significant financial losses and a going concern warning, despite strategic initiatives and revenue growth. The high reliance on external funding and related-party support, coupled with operational dependencies and geopolitical uncertainties, indicates substantial risk.

Positives

• Revenue increased significantly by 216% to $1,294,549 in 2025, driven by a new design and build services project.
• Strategic shift towards design and project management services in overseas markets aims to reduce regulatory complexity and capital intensity.
• Proposed acquisition of ASA Robotics Limited is expected to expand capabilities in AI-enabled healthcare solutions and smart living.
• Focus on integrating Modular Integrated Construction (MiC), Air-to-Water (A2W) technology, and Internet of Things (IoT) for sustainable and smart property development.
• Actively exploring property development projects in Australia (affordable housing for elderly in New South Wales and Victoria), North America (Vancouver), and Europe.
• Successful completion of the Sheung Shui Town Lot No. 263 (F0874), Kwu Tung North Podium and Tower project in June 2025.
• Management believes its integrated ecosystem and strategic collaborations will drive sustainable growth and new revenue opportunities.

Negatives

• Reported a substantial net loss of $1,270,120 in 2025, significantly higher than $283,378 in 2024.
• Accumulated deficit reached $4,119,851 as of December 31, 2025.
• Working capital deteriorated to a deficit of $112,961 in 2025 from a surplus of $126,004 in 2024.
• Net cash used in operating activities increased to $1,236,551 in 2025.
• The company's ability to continue as a going concern is in substantial doubt, dependent on external financial support.
• Significant customer concentration, with two customers accounting for 99% of 2025 revenues (82% from one individual customer, 17% from Zenith (HK) Engineering Limited).
• Indebtedness of $132,260 to Zenith (HK) Engineering Limited, with notes due and payable, and no expectation of sufficient cash flow for repayment within 24 months.
• Reliance on third-party manufacturers for critical components exposes the company to supply chain disruptions and operational risks.
• A corporate guarantee of approximately $1.91 million for a related company represents a contingent liability.
• No dividends have been paid historically, and none are anticipated in the foreseeable future.
• Significant increase in general and administrative expenses in 2025 due to expansion and business combination costs.

Risks

• Going concern uncertainty due to recurring losses, negative cash flows from operations, and dependence on additional capital and continued financial support from stockholders and related parties.
• Substantial customer concentration, with two customers accounting for 99% of 2025 revenues, creating vulnerability to changes in their demand or contract terminations.
• Uncertainty regarding the success of the business plan, as property development projects require significant upfront financing and are subject to market conditions.
• Reliance on third-party manufacturers and partners for critical components (modular units, AWGs) exposes the company to supply chain disruptions, quality control issues, and delivery impairments.
• Potential for construction services shortages, labor scarcity, and delays in permitting/inspections, which could increase costs and impact project timelines.
• Exposure to warranty and construction defect claims, with potential for inadequate liabilities and negative publicity.
• Subject to myriad legal and regulatory requirements (zoning, environment, building codes) that can cause delays, increase costs, or restrict development.
• Risk of being required to make payments under a $1.91 million corporate guarantee provided for a related party.
• Inability to protect the confidentiality of trade secrets could harm the business and competitive position.
• Operating in a highly competitive market with low barriers to entry, facing larger, more established companies with greater resources.
• Need for significant additional funding ($6.5 million over 12 months, $13 million over 24 months) to implement the business plan, with no assurance of availability on acceptable terms.
• Potential for substantial dilution of ownership interests if additional capital is raised through equity or convertible debt securities.
• Indebtedness of $132,260 to Zenith (HK) Engineering Limited, with notes due and payable, and no expected cash flow for repayment within 24 months.
• Risks related to doing business in Hong Kong, including potential changes in PRC government policies, application of PRC laws, and restrictions on capital flows.
• Substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including those governing foreign investment, anti-monopoly, and data security.
• The Chinese government exerts substantial influence over business activities, potentially limiting the ability to offer securities or affecting operations.
• Potential for future cybersecurity review requirements if data processing activities affect national security or if the company holds data on more than 1,000,000 users.
• Risk of delisting from OTC Markets under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect the Hong Kong-based auditor for two consecutive years.
• Uncertainties under the PRC Securities Law (Article 177) regarding U.S. securities regulatory agencies' ability to conduct investigations and collect evidence within the PRC, potentially leading to suspension or de-registration.
• Adverse regulatory developments in China may lead to additional regulatory review, disclosure requirements, and increased compliance costs.
• Exposure to liabilities under the Foreign Corrupt Practices Act (FCPA) due to operations in Hong Kong.
• PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent the use of offshore financing proceeds for Hong Kong subsidiaries.
• Restrictions on the payment of dividends or other cash payments from subsidiaries due to local regulations or debt covenants.
• Potential for PRC income tax on dividends and gains from stock sales for foreign investors if the company is deemed a PRC resident enterprise.
• Risk of the company's global income being subject to PRC taxes under the PRC Enterprise Income Tax Law if classified as a PRC resident enterprise.
• Uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies, potentially leading to PRC taxation.
• More complex procedures for certain acquisitions of Chinese companies by foreign investors, which could hinder growth through acquisitions in China.
• Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject participants or the company to fines and sanctions.
• Risk of becoming directly subject to scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, potentially harming business operations and reputation.
• Difficulty for stockholders to enforce any judgment obtained in the United States against the company or its officers/directors due to assets and personnel being located in Hong Kong.
• Lack of an active market for common stock and limited trading market on OTCID, making transactions cumbersome and potentially reducing investment value.
• Common stock is subject to penny stock rules, which may make it more difficult for investors to dispose of shares.
• Potential for substantial dilution of investment due to the conversion of outstanding Series A Convertible Preferred Stock into common shares.
• The company is a controlled company, with ModuLink BVI and directors controlling approximately 67.93% of voting power, limiting the influence of other shareholders.
• Nevada state laws and corporate bylaws contain anti-takeover provisions that could hinder potential takeovers.
• Stockholders will not receive a return on their shares unless they sell them, as no cash dividends are anticipated in the foreseeable future.
• The stock may be subject to substantial price and volume fluctuations due to various factors beyond the company's control.

Future Outlook

Management expects increasing global demand for sustainable, technology-enabled communities to drive expansion across key markets, including Asia and Australia. The company anticipates its proprietary innovations, such as air-to-water generation systems and AI-powered assisted living solutions, will create new revenue opportunities through both project-based deployments and recurring SaaS-driven models. Plans include the rollout of next-generation products and an increased focus on design and project management services for future developments, particularly in overseas markets, to minimize regulatory complexity and operational risk. The company is actively evaluating various financing alternatives to meet estimated capital requirements of $6.5 million over the next 12 months and $13 million over the next 24 months to fund its business plan and strategic objectives, including potential MiC projects in Vancouver and property development in Australia.

Management Comments

• "We continue our mission to build communities that 'Live Smart, Live Green,' enhanced by air-to-water systems that deliver reliable, energy-efficient water generation for healthier and more resilient environments, enabling scalable, self-sustaining and eco-friendly developments worldwide."
• "By embracing advanced technologies, we expect to achieve competitive advantages, drive sustainable growth, and meet the evolving needs of modern urban environments."
• "Management believes that its focus on cost efficiency, sustainability, and rapid deployment provides a competitive advantage as regulatory requirements and consumer preferences increasingly favor environmentally responsible solutions."
• "Management believes the Company may be able to fund its current level of operations for at least the next 12 months only if such support, forbearance and/or additional financing remain available."
• "The Company does not currently have sufficient capital to fully implement its broader business plan without raising additional funds."
• "The Company is actively evaluating various financing alternatives to meet these capital requirements."
• "Management believes this acquisition [ASA Robotics] represents a strategic step in expanding the Company's capabilities in AI-enabled solutions within healthcare and institutional environments."

Industry Context

StockSavvy.ai notes that ModuLink's strategic pivot towards modular construction (MiC), atmospheric water generation (AWG), and IoT-enabled smart living aligns with several burgeoning industry trends. The global modular construction market is projected to grow at an 8.5% CAGR to $130.7 billion by 2027, driven by demand for affordable housing and faster methods. The AWG market is expected to reach $2.5 billion by 2030 (10.2% CAGR) due to water scarcity concerns, while IoT in real estate is forecast to hit $84 billion by 2030 (16% CAGR) fueled by smart building demand. ModuLink's integrated approach positions it to capitalize on these converging trends, particularly in sustainable and technology-enabled communities, differentiating it from traditional developers. The proposed acquisition of ASA Robotics further diversifies its offerings into AI healthcare, tapping into the growing elder care technology market.

Comparison to Industry Standards

• The global modular construction market was valued at approximately USD 86.4 billion in 2022 and is projected to reach USD 130.7 billion by 2027, growing at a compound annual growth rate (CAGR) of around 8.5%.
• The Atmospheric Water Generator (AWG) market is currently valued at around USD 1.2 billion in 2023 and is expected to grow to USD 2.5 billion by 2030, with a CAGR of approximately 10.2%.
• The global IoT in real estate market was valued at around USD 25 billion in 2022 and is anticipated to reach USD 84 billion by 2030, with a CAGR of approximately 16%.
• ModuLink aims to achieve green building certifications like LEED and BREEAM, which are global benchmarks for sustainable construction.
• The Lok Ma Chau Loop project, completed by a former affiliate, was the largest MiC-utilized site office in Hong Kong, marking a significant milestone in the region's adoption of modular construction.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not involved in any litigation that is believed to have a material adverse effect on its financial position or results of operations.
• There are no pending or threatened actions, suits, proceedings, inquiries, or investigations before any court, public board, government agency, self-regulatory organization, or body against the company or its officers or directors in their capacities as such.

Related Party Transactions

• **Promissory Notes with Zenith (Hong Kong) Engineering Limited (Zenith (HK))**: Two convertible promissory notes (principal amounts $65,000 and $75,000) were transferred to Zenith (HK) on January 30, 2025. Zenith (HK) waived conversion rights on February 28, 2025. The total outstanding amount (principal + accrued interest) is approximately $132,260 as of December 31, 2025. PUN, Ah Keung is the sole shareholder of Zenith (HK).
• **Design Services Management Agreement with Zenith (Hong Kong) Engineering Limited**: Zenith Integrated Modular Limited (subsidiary) provides design technical manpower services to Zenith (HK) for a project with a total contract sum of HK$4,000,000 (approximately $513,000). The project was completed in June 2025.
• **Design and Project Services Management Agreement with Zenith (PMS) Limited**: Zenith Integrated Modular Limited (subsidiary) receives technical manpower and expertise from Zenith (PMS) Limited. Project and design management service fees paid were $776,495 in 2025 and $245,716 in 2024. Amounts due to Zenith (PMS) Limited were $0 in 2025 and $47,798 in 2024. TAM, Hin Wah Anthony (Chairman) is the director and controlling shareholder of Zenith (PMS) Limited. These amounts are unsecured, non-interest-bearing, and repayable on demand.
• **Office Service Arrangement with AY Consulting Services Company**: ModuLink Corporation Limited (subsidiary) pays a monthly rate of $3,270 for office services. Rental expense recognized was $38,514 in 2025 and $7,890 in 2024. Amounts due to AY Consulting Services Company were $227,801 in 2025 and $153,847 in 2024. Au-Yeung Sai Kit (CFO and Director) is the sole proprietorship of AY Consulting Services Company. These amounts are unsecured, non-interest-bearing, and repayable on demand.
• **Product Development Services with Leidenford Ltd.**: Product development fees paid to Leidenford Ltd. were $87,821 in 2025 and $30,306 in 2024. FU Wah (CEO and Director) is the majority shareholder and sole director of Leidenford Ltd. The arrangement is oral, with a monthly fee of HK$30,000 (approximately US$3,846) from January 2025 onward.
• **Corporate Guarantee**: A subsidiary provided a corporate guarantee of approximately $1.91 million to a bank for general banking facilities granted to both the subsidiary and a related company wholly owned by Mr. Tam Hin Wah Anthony. No liability has been recognized as payment is not probable.

Stakeholder Impact

• **Shareholders**: Face potential for significant dilution from preferred stock conversion, limited influence due to concentrated voting power (67.93% by ModuLink BVI and directors), no anticipated dividends, and risks of delisting under HFCAA. Difficulty in enforcing U.S. judgments and the 'penny stock' classification further impact investment value.
• **Employees**: Subject to Hong Kong employment laws and MPF contributions, with potential for future application of PRC labor laws if operations expand to mainland China. Risks related to non-compliance with PRC regulations for employee share option plans.
• **Customers**: May experience service interruptions or project delays due to reliance on third-party manufacturers and potential construction labor shortages. High customer concentration means the loss of a major client could severely impact the company's ability to deliver services.
• **Suppliers/Contractors**: The company's reliance on third-party manufacturers for critical components and local suppliers for auxiliary materials exposes them to supply chain disruptions.
• **Creditors**: The 'going concern' warning, significant losses, and working capital deficit raise concerns about the company's ability to meet its financial obligations. The $132,260 notes payable to Zenith (HK) are due, and a $1.91 million corporate guarantee represents a contingent liability that could impact liquidity.

Next Steps

• Identify cost-effective areas and engage in feasibility discussions with local partners and landowners in Australia and Hong Kong for future projects.
• Undertake one to two MiC projects in Vancouver within the next 18 months, contingent upon obtaining requisite funding.
• Actively explore potential development projects in Australia, North America, and various parts of Europe.
• ModuLink InnoTech Limited expects to continue investing in the research and development of AWG and IoT technologies.
• Pursue one to two property development or MiC projects in Australia from mid-2026 through 2027, subject to market conditions, land availability, approvals, and financing.
• Establish project-specific joint venture entities for affordable housing projects in New South Wales and Victoria, Australia.
• Initiate outreach with local partners in Canada/North America/Europe as market conditions and finances permit.
• Standardize processes, materials, and components for MiC, AWG, and IoT integration.
• Target key markets with high demand for sustainable and efficient construction solutions.
• Ensure all construction projects comply with local, national, and international building codes and sustainability standards.
• Implement robust monitoring systems to track the performance of integrated solutions and gather feedback for continuous improvement.
• Complete the acquisition of ASA Robotics Limited as soon as practicable, following capital restructuring and governance arrangements.
• Adopt a formal insider trading policy and procedures no later than Q2 2026.
• Evaluate the appointment of a Chief Technology Officer to enhance technology leadership and governance.

Key Dates

Recommendation

The filing presents a company in a precarious financial state, marked by substantial net losses, a working capital deficit, and a clear 'going concern' warning from its auditor. While ModuLink has ambitious strategic plans and reported revenue growth, its heavy reliance on future capital raises and continued related-party support, coupled with significant customer concentration and exposure to evolving PRC regulatory risks, creates an exceptionally high-risk profile. The proposed acquisition of ASA Robotics, while strategic, is delayed and adds to the capital requirements without immediate clarity on its financial impact. For a seasoned investor, the combination of severe financial distress, operational dependencies, and geopolitical uncertainties warrants a strong sell recommendation, as the risk of capital impairment is substantial.

Keywords

Modular construction, MiC, Air-to-Water, AWG, IoT, Property development, Smart homes, Sustainable communities, Hong Kong, Australia, Real estate, AI healthcare, Robotics, SEC filing, 10-K, MDLK, Going concern, Capital raise