AMBITIONS ENTERPRISE MANAGEMENT CO. L.L.C

AMBITIONS ENTERPRISE MANAGEMENT CO. L.L.C (the "Company" or "Ambitions") operates as a holding company with its primary operations conducted in the UAE through its subsidiaries, Hunter Dubai and Multiple Dubai. The Company's core business revolves around providing tour operator, travel agency, and event planning and management services. The industry is characterized by intense competition and rapid change, influenced by new service introductions and market activities of other participants. Ambitions competes with service providers of tourism and MICE management, some of which are large, well-capitalized companies with greater market share, resources, and experience. Key competitors include Arabian Adventures LLC, Desert Gate Tourism LLC, and ADNEC Services LLC. The Company believes its competitive strengths lie in a broad range of customers, large-scale event planning and organizational capabilities, bespoke travel itinerary planning services, a diversified selection of services, and an experienced management team. For instance, the Company has provided event planning and organization services to over 300 clients across various sectors and has planned and executed approximately 900 events with over 100 participants, and around 50 events with more than 1,000 attendees, including the IDA Annual Conference in August 2025 with approximately 7,700 participants. The Company also works with 435 hotels, 213 restaurants, and 36 car rental companies to offer diverse experiences.

Ambitions generates revenue from four primary sources: MICE management service fees, one-stop tourism service fees, commissions for transportation ticketing and accommodation reservation services, and other travel-related services. The MICE management services involve comprehensive coordination and organization of events for corporate clients and industry associations, including guest invitation, event website development, advertising, and overall event management. One-stop tourism services provide comprehensive travel packages, including transportation, accommodations, meals, and guided tours, for both event participants and other travelers. Commission revenue is derived from ticketing and accommodation reservations, while other revenue includes service fees from insurance companies and commissions from other travel-related products like tourist attraction tickets and visa application services. The Company acts as a principal for MICE management and packaged tours, recognizing revenue on a gross basis, while commission revenue is recognized on a net basis.

For the fiscal year ended December 31, 2025, Ambitions reported total revenue of $20,229,180 ¹. Gross profit for the period was $5,028,527 ², resulting in a gross margin of 24.9% ³. Operating income stood at $1,291,078 ⁴, representing an operating margin of 6.4% ⁵. Net income for the year was $1,223,156 ⁶, leading to a diluted EPS of $0.04 ⁷. The Company generated net cash provided by operating activities of $496,518 ⁸. As of December 31, 2025, cash and cash equivalents were $2,868,138 ⁹, with total current assets of $10,710,043 ¹⁰ and total assets of $15,052,485 ¹¹. Total current liabilities were $2,560,618 ¹². The Company had no long-term debt explicitly stated, but held-to-maturity investments amounted to $2,528,278 ¹³.

Comparing the year ended December 31, 2025, to the year ended December 31, 2024, total revenue increased by approximately 9.1% ¹⁴ from $18,543,447 ¹⁵ to $20,229,180 ¹⁶. MICE management solution services revenue saw a significant increase of approximately 38.8% ¹⁷, rising from $12,377,069 ¹⁸ to $17,178,001 ¹⁹, and its contribution to total revenue grew from 66.7% ²⁰ to 84.9% ²¹. Conversely, packaged tours services revenue decreased by approximately 61.1% ²², from $5,613,299 ²³ to $2,183,915 ²⁴, and its percentage of total revenue declined from 30.3% ²⁵ to 10.8% ²⁶. Commission revenue for transportation ticketing and accommodation reservation services increased by approximately 47.2% ²⁷, from $520,982 ²⁸ to $766,977 ²⁹. Cost of revenue increased by approximately 7.5% ³⁰ from $14,137,109 ³¹ to $15,200,653 ³². Gross profit increased by approximately 14.1% ³³ from $4,406,338 ³⁴ to $5,028,527 ³⁵, with gross margin improving from 23.8% ³⁶ to 24.9% ³⁷. Operating income increased from $1,047,418 ³⁸ to $1,291,078 ³⁹, and net income increased from $950,865 ⁴⁰ to $1,223,156 ⁴¹.

During the fiscal year ended December 31, 2025, the Company closed its initial public offering on October 22, 2025, issuing 1,500,000 Class A Ordinary Shares at $4.00 per share, with the underwriter fully exercising an over-allotment option for an additional 225,000 Class A Ordinary Shares, generating gross proceeds of $6,900,000 ⁴². Net proceeds from the IPO were approximately $3.56 million ⁴³ after deducting underwriting discounts and offering expenses. The Company also made significant investments, with net cash used in investing activities amounting to $4,128,566 ⁴⁴, primarily due to the purchase of equipment of approximately $1,600,288 ⁴⁵ and payments for held-to-maturity investments of approximately $2,528,278 ⁴⁶. The Company received financial support three times from the Department of Dubai Business Events in amounts of $40,844 ⁴⁷, $102,110 ⁴⁸, and $34,037 ⁴⁹ for hosting large-scale exhibition events with over 500 attendees in 2023, 2024, and 2025, respectively.

Management's specific revenue, margin, or EPS guidance for the upcoming period is not explicitly provided in the filing. However, the Company's plans for business expansion and development are dependent upon raising significant additional capital, with an estimated capital need of approximately $5 million ⁵⁰ for expansion.

The Company intends to pursue several growth areas. Firstly, it plans to extend its reach into additional regional markets, specifically targeting various European countries including Spain, the United Kingdom, France, and Italy, as well as Oceanian nations such as Australia and New Zealand. This expansion involves working with local hotels, restaurants, and convention centers to broaden the scope of its one-stop tourism and MICE management services. Furthermore, the Company aims to acquire local travel agencies and establish new subsidiaries in these regions, although no potential target companies have been identified as of the date of this annual report. Secondly, Ambitions plans to expand its customer reach through three key strategies: launching an online booking platform to increase visibility and attract individual customers, establishing five to ten travel advisors in Europe, Oceania, and Southeast Asia to design, develop, promote, and sell local travel offerings, and executing an integrated marketing approach including social media promotions on platforms like TikTok and Instagram, customer incentives, and creating Arabic-language short dramas with integrated marketing content to enhance regional presence and brand influence. Thirdly, the Company plans to develop robotic solutions for an enhanced tourism experience by initiating a partnership with technology companies, supported financially by its subsidiaries. The initial investment in this venture is set at US$300,000 ⁵¹, with the goal of deploying these tourism robots by the first half of 2027 ⁵². These robots are intended for use in airports, hotels, and tourist attractions, offering services such as language translation, navigational assistance, streamlined hotel check-ins, emergency evacuations, interactive features, and intelligent guided tours.

Regarding operational outlook, the Company expects to continue receiving incentives from the Dubai government for hosting events with more than 500 attendees, as long as the policy remains in place, due to its commitment to expanding its customer base and service scope. The Company has identified a material weakness in its internal control over financial reporting related to a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements. Remedial measures include hiring more qualified accounting personnel, implementing regular U.S. GAAP and financial reporting training programs, and establishing an internal audit function, as well as engaging an external consulting firm to assist with Sarbanes-Oxley compliance and overall internal control improvement.

Planned capital allocation includes retaining any future earnings to finance the operation and expansion of its business and to repay indebtedness. The Company does not anticipate paying any cash dividends in the foreseeable future. While management estimates capital needs for expansion at approximately $5 million ⁵³, it may seek additional investments, loans, or debt financing if cash requirements exceed current on-hand amounts.

Management has flagged several structural headwinds and execution risks. The Company's ability to execute its business plan will be impaired if it does not obtain substantial additional financing beyond the estimated $5 million ⁵⁴ needed for expansion. There is no assurance that additional investment will be available on favorable terms. The Company's success also depends on its ability to retain, attract, and motivate key personnel, and the intense competition for qualified employees may necessitate increased compensation, materially increasing operating expenses. Geopolitical conflicts, particularly the heightened military conflict involving the United States, Israel, and Iran, which escalated significantly in February 2026, and the ongoing war in Ukraine, pose risks to global economic conditions and could disrupt travel patterns, reduce tourism demand, and lead to airspace restrictions, border closures, and flight delays, materially and adversely affecting the business. The Company also faces risks related to its dual-class capital structure, which concentrates voting control with the CEO and chairman, potentially leading to actions not aligned with other shareholders' interests and adversely affecting the trading market for Class A Ordinary Shares.

The Company faces several material risks, including macroeconomic, geopolitical, and operational challenges. Geopolitical conflicts, specifically the heightened military conflict involving the United States, Israel, and Iran, which escalated significantly in February 2026, and the ongoing war in Ukraine, pose substantial risks to global financial and energy markets, potentially leading to protracted and severe damage to the global economy and investment climate. Given that a substantial portion of the Company's operations are in the Middle East, particularly the UAE, such instability could disrupt travel patterns, reduce tourism demand, and cause airspace restrictions, border closures, and flight delays. Economically, the GCC region's high dependence on the oil and gas industry makes the Company vulnerable to volatile oil prices, which could adversely affect GDP and tourism. Operationally, the Company's growth rates may decline due to decreasing client demand, increasing competition, or changes in government policies. High customer concentration, with two customers accounting for 20.8% ⁵⁵ and 11.1% ⁵⁶ of total revenue in 2023, and one customer accounting for approximately 12.2% ⁵⁷ of accounts receivable as of December 31, 2025, exposes the Company to significant revenue fluctuations if these relationships are not maintained. Dependence on third-party services, such as the International Air Transport Association which accounted for 20.2% ⁵⁸ of overall purchases in 2025, could lead to service interruptions or increased costs if these relationships are disrupted. The seasonality of the UAE tourism industry, with reduced demand from June to August due to extreme summer weather, impacts revenue. The Company does not carry business interruption or property insurance, exposing it to significant uninsured costs and business disruption from events like natural disasters. Furthermore, the Company has identified material weaknesses in internal control over financial reporting due to a lack of accounting staff with U.S. GAAP and SEC reporting knowledge, which could lead to financial statement inaccuracies or fraud. Regulatory changes in the UAE, such as the 9% ⁵⁹ federal corporate tax regime on profits above AED375,000 (US$102,110) ⁶⁰ and potential de-pegging of the AED from the USD, could adversely affect profitability and the attractiveness of the UAE as a tourist destination.

Management's message to shareholders emphasizes a commitment to business expansion and strengthening brand loyalty through strategic initiatives. The Company plans to extend its geographic reach into Europe and Oceania by working with local partners, acquiring travel agencies, and establishing new subsidiaries. A key strategic priority is expanding customer reach through digital platforms, including launching an online booking platform, establishing travel advisors in key regions, and implementing an integrated social media marketing approach, including Arabic-language short dramas. Another significant strategic focus is the development of innovative robotic solutions for enhanced tourism experiences, with an initial investment of US$300,000 ⁶¹ and a target deployment by the first half of 2027 ⁶². Management acknowledges the need for approximately $5 million ⁶³ in additional capital for expansion and development plans. Despite the identified material weaknesses in internal control over financial reporting, management is actively implementing remedial measures, including hiring qualified accounting personnel, providing continuous U.S. GAAP training, and establishing a financial and system control framework. The overall tone suggests a forward-looking approach focused on leveraging market opportunities and technological advancements to drive growth, while also addressing internal control deficiencies.