Linkhome Holdings Inc.

Previous wording

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with those statements. You should read the following discussion in conjunction with “Selected Historical Financial and Other Data” and our audited consolidated financial statements and related notes which are included elsewhere in this prospectus. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, those described under “Risk Factors” and included in other portions of this prospectus.

Current wording

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with those statements. You should read the following discussion in conjunction with “Selected Historical Financial and Other Data” and our audited consolidated financial statements and related notes which are included elsewhere in this Quarterly Report on Form 10-Q. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, those described under “Risk Factors” and included in other portions of this Quarterly Report on Form 10-Q.

Previous wording

For the three months ended March 31, 2024, the Company acquired a property for $915,662 in cash from an unrelated party, holding title in its name, and subsequently sold the property to Haiyan Ma for $924,544.

Current wording

For the six months ended June 30, 2024, the Company acquired a property for $ 2,884,882 in cash from an unrelated party, holding title in its name, and subsequently sold the property to Haiyan Ma for $ 2,940,544.

Previous wording

For the three months ended March 31, 2025, the Company provided real estate agency services to Na Li, assisting with the sale of a property. The Company earned $126,000 in real estate agency commission from Na Li but paid a referral fee of $28,440 to Haiyan Ma for introducing the buyer, resulting in net revenue of $97,560 recognized on a net basis.

Current wording

For the six months ended June 30, 2025, the Company provided real estate agency services to Na Li, assisting with the sale of a property. The Company earned $126,000 in real estate agency commission from Na Li but paid a referral fee of $28,440 to Haiyan Ma for introducing the buyer, resulting in net revenue of $97,560 recognized on a net basis.

Previous wording

On May 1, 2024, Zhen Qin lent $530,000 to the Company to support its operational needs. As of March 31, 2025, the Company had fully repaid the outstanding balance to Zhen Qin, resulting in no amount due to the related party. As of December 31, 2024, the Company repaid $475,000 to Zhen Qin, leaving an outstanding balance of $55,000.

Current wording

On May 1, 2024, Zhen Qin lent $530,000 to the Company to support its operational needs. As of June 30, 2025, the Company had partially repaid the loan to Zhen Qin, leaving an outstanding balance of $139,347. As of December 31, 2024, the Company had repaid $475,000 to Zhen Qin, leaving an outstanding balance of $55,000.

Previous wording

Revenue from property purchases and sales through our Cash Offer program accounted for 95.98% and 80.82% of net revenues for the three months ended March 31, 2025 and 2024, respectively. Our revenue from this program increased by $4,555,346, or 492.71%, from $924,544 for the three months ended March 31, 2024, to $5,479,890 for the three months ended March 31, 2025. This significant increase was due to the expansion of our Cash Offer program, which commenced in late 2023. For the three months ended March 31, 2025 and 2024, we purchased and sold six and one properties, respectively, through the Cash Offer program, with average transaction prices of $0.90 million and $0.92 million, respectively.

Current wording

Revenue from property purchases and sales through our Cash Offer program accounted for 97.51% and 90.81% of net revenues for the three months ended June 30, 2025 and 2024, respectively. Our revenue from this program increased by $2,664,100, or 132.15%, from $2,016,000 for the three months ended June 30, 2024, to $4,680,100 for the three months ended June 30, 2025. This significant increase was due to the expansion of our Cash Offer program, which commenced in late 2023. For the three months ended June 30, 2025 and 2024, we purchased and sold seven and two properties, respectively, through the Cash Offer program, with average transaction prices of $0.67 million and $0.97 million, respectively.

Previous wording

Real estate agency commission increased by $4,135, or 1.99%, from $207,382 for the three months ended March 31, 2024, to $211,517 for the three months ended March 31, 2025. This increase was primarily driven by a 6.38% rise in gross commission, which grew from $245,337 for the three months ended March 31, 2024, to $261,000 for the same period in 2025, partially offset by higher rebates. Rebates increased by 30.37%, from $37,955 for the three months ended March 31, 2024, to $49,483 for the three months ended March 31, 2025, as we continued to offer rebates to attract more clients and expand market share. Despite the increase in gross commission, total transaction volume decreased by 41.33%, primarily due to a 38.46% decrease in the number of real estate transactions and a 4.66% decrease in the average transaction price. For the three months ended March 31, 2025, we achieved a total transaction volume of $7,093,791 by completing 8 real estate transactions at an average transaction price of $0.89 million, while we achieved a total transaction volume of $12,090,829 by completing 13 real estate transactions at an average transaction price of $0.93 million for the same period in 2024. The overall increase in gross commission was primarily driven by higher commission rates on certain transactions and a focus on higher-value transactions.

Current wording

Real estate agency commission decreased by $ 59,940, or 70.93%, from $ 84,509 for the three months ended June 30, 2024, to $ 24,569 for the three months ended June 30, 2025. This decrease was primarily driven by a 69.33% drop in gross commission, which drop from $127,134 for the three months ended June 30, 2024, to $38,993 for the same period in 2025. Rebates also decreased by 66.16%, from $42,625 for the three months ended June 30, 2024, to $14,423 for the three months ended June 30, 2025. Also, total transaction volume decreased by 57.26%, primarily due to a 66.67% decrease in the number of real estate transactions, partially offset by a 28.21% increase in the average transaction price. For the three months ended June 30, 2025, we achieved a total transaction volume of $2,069,500 by completing two real estate transactions at an average transaction price of $1.03 million, while we achieved a total transaction volume of $4,842,426 by completing six real estate transactions at an average transaction price of $0.81 million for the same period in 2024. The overall decrease in gross commission was primarily driven by a significant decline in the number of transactions and total transaction volume, despite a slight increase in average transaction price.

Previous wording

Revenue from home renovation service increased by $7,752, or 352.36%, from $2,200 for the three months ended March 31, 2024, to $9,952 for the three months ended March 31, 2025. This increase was primarily driven by higher service fees earned from the completed home renovation project in 2025. For the three months ended March 31, 2025 and 2024, we completed one home renovation projects in each period.

Current wording

Revenue from home renovation service decreased by $44,609, or 37.99%, from $ 117,426 for the three months ended June 30, 2024, to $ 72,817 for the three months ended June 30, 2025. This decrease was primarily driven by a lower number of completed home renovation projects in 2025. For the three months ended June 30, 2025 and 2024, we completed two and five home renovation projects respectively.

Previous wording

Revenue from mortgage referral service increased by $2,250, or 55.56%, from $4,050 for the three months ended March 31, 2024, to $6,300 for the three months ended March 31, 2025. This increase was primarily driven by a higher number of mortgage loans secured during the period. We assisted clients in securing three mortgage loans for the three months ended March 31, 2025, compared to one mortgage loan for the same period in 2024.

Current wording

Revenue from mortgage referral service increased by $20,303 from $0 for the three months ended June 30, 2024, to $20,303 for the three months ended June 30, 2025. This increase was primarily driven by a higher number of mortgage loans secured during the period. We assisted clients in securing three mortgage loans for the three months ended June 30, 2025, compared to zero mortgage loan for the same period in 2024.

Previous wording

Revenue from property management service decreased by $3,985, or 69.28%, from $5,752 for the three months ended March 31, 2024, to $1,767 for the three months ended March 31, 2025. This decrease was primarily due to lower tenant placement service revenue, as we did not complete any tenant placements for the three months ended March 31, 2025, compared to three tenant placements for the same period in 2024. Additionally, ongoing property management service revenue remained limited, as this service commenced in the third quarter of 2024. For the three months ended March 31, 2025, we managed three properties under ongoing property management service, while no properties were managed for the same period in 2024.

Current wording

Revenue from property management service decreased by $219, or 11.03%, from $1,986 for the three months ended June 30, 2024, to $1,767 for the three months ended June 30, 2025. This decrease was primarily due to lower tenant placement service revenue, as we did not complete any tenant placements for the three months ended June 30, 2025, compared to two tenant placements for the same period in 2024. Additionally, ongoing property management service revenue remained limited, as this service commenced in the third quarter of 2024. For the three months ended June 30, 2025, we managed three properties under ongoing property management service, while no properties were managed for the same period in 2024.

Previous wording

Cost of property purchases and sales through Cash Offer increased by $4,522,262, or 493.88%, from $915,662 for the three months ended March 31, 2024, to $5,437,924 for the three months ended March 31, 2025. This increase was primarily driven by a higher volume of transactions during the three months ended March 31, 2025, compared to the same period in 2024.

Current wording

Cost of property purchases and sales through Cash Offer increased by $2,658,570, or 135.01%, from $ 1,969,220 for the three months ended June 30, 2024, to $ 4,627,790 for the three months ended June 30, 2025. This increase was primarily driven by a higher volume of transactions during the three months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Cost of real estate services was $9,585 for the three months ended March 31, 2025, compared to $0 for the three months ended March 31, 2024. This increase was primarily driven by higher renovation costs incurred in connection with home renovation services.

Current wording

Cost of real estate services was $62,224 for the three months ended June 30, 2025, compared to $95,801 for the three months ended June 30, 2024. This decrease was primarily driven by lower number of completed home renovation projects in 2025.

Previous wording

Cost of revenues for the three months ended March 31, 2025 and 2024 was $5,447,509 and $915,662, respectively, representing an increase of $4,531,847, or 494.93%. This increase was primarily driven by higher costs associated with increased revenue from property purchases and sales through Cash Offer.

Current wording

Cost of revenues for the three months ended June 30, 2025 and 2024 was $4,690,014 and $2,065,021, respectively, representing an increase of $2,624,993, or 127.12%. This increase was primarily driven by higher costs associated with increased revenue from property purchases and sales through Cash Offer.

Previous wording

Gross profit for the three months ended March 31, 2025 and 2024 was $261,917 and $228,266, respectively, representing an increase of $33,651, or 14.74%. The blended gross margin was 4.59% for the three months ended March 31, 2025, compared to 19.96% for the same period in 2024.

Current wording

Gross profit for the three months ended June 30, 2025 and 2024 was $109,542 and $154,900, respectively, representing a decrease of $45,358, or 29.28%. The blended gross margin was 2.28% for the three months ended June 30, 2025, compared to 6.98% for the same period in 2024.

Previous wording

Gross profit from property purchases and sales through Cash Offer, as a percentage of revenue from property purchases and sales through Cash Offer, was 0.77% for the three months ended March 31, 2025, compared to 0.96% for the same period in 2024. We expect that our Cash Offer program may continue to adversely affect our gross margin in the short term but will provide significant long-term growth opportunities by allowing us to differentiate ourselves in a highly competitive real estate market, attract more clients, and increase market share.

Current wording

Gross profit from property purchases and sales through Cash Offer, as a percentage of revenue from property purchases and sales through Cash Offer, was 1.12% for the three months ended June 30, 2025, compared to 2.32% for the same period in 2024. We expect that our Cash Offer program may continue to adversely affect our gross margin in the short term but will provide significant long-term growth opportunities by allowing us to differentiate ourselves in a highly competitive real estate market, attract more clients, and increase market share.

Previous wording

Selling expenses primarily consisted of staging, advertising, and marketing costs. Selling expenses for the three months ended March 31, 2025 and 2024 were $17,341 and $900, respectively, representing an increase of $16,441, or 1,826.78%. This increase was primarily driven by higher advertising and marketing expenditures aimed at attracting more clients and listings, as well as enhancing brand awareness.

Current wording

Selling expenses primarily consisted of staging, advertising, and marketing costs. Selling expenses for the three months ended June 30, 2025 and 2024 were $7,455 and $1,760, respectively, representing an increase of $5,695, or 323.58%. This increase was primarily driven by higher advertising and marketing expenditures aimed at attracting more clients and listings, as well as enhancing brand awareness.

Previous wording

Other expenses were $11,749 for the three months ended March 31, 2025, compared to $293 for the three months ended March 31, 2024. For the three months ended March 31, 2025, other expenses primarily consisted of unrealized loss on trading securities of $11,007, interest expense of $682, and bank fees of $60. For the three months ended March 31, 2024, other expenses primarily consisted of interest expense of $800, partially offset by bank rewards of $300 and credit card rebates of $207.

Current wording

Other income was $7,590 for the three months ended June 30, 2025, compared to other expense of $963 for the three months ended June 30, 2024. For the three months ended June 30, 2025, other income primarily consisted of unrealized gain on trading securities of $11,007 and other income, net of $1, partially offset by realized loss on trading securities of $2,651, interest expense of $647, and bank fees of $120. For the three months ended June 30, 2024, other expenses primarily consisted of interest expense of $770 and bank fees of $193.

Previous wording

Income tax expenses for the three months ended March 31, 2025 and 2024 were $31,444 and $32,348, respectively, representing a decrease of $904, or 2.79%. This decrease was primarily due to a lower effective tax rate in 2025.

Current wording

Income tax expenses for the three months ended June 30, 2025 and 2024 were $6,446 and $ 17,780, respectively, representing a decrease of $11,334 or 63.75%. This decrease was primarily due to a lower effective tax rate in 2025.

Previous wording

Gross profit from real estate services, as a percentage of real estate service revenue, was 95.82% for the three months ended March 31, 2025, compared to 100.00% for the same period in 2024. This decrease was primarily due to higher renovation costs incurred in connection with home renovation services.

Current wording

Gross profit from real estate services, as a percentage of real estate service revenue, was 79.42% for the six months ended June 30, 2025, compared to 77.37 % for the same period in 2024. This decrease was primarily due to a lower number of completed home renovation projects in 2025.

Previous wording

General and administrative expenses for the three months ended March 31, 2025 and 2024 were $120,754 and $154,433, respectively, representing a decrease of $33,679, or 21.81%. This decrease was primarily due to a reduction in legal and accounting expenses of $46,253 and a slight decline in depreciation expense of $12, partially offset by increases in payroll expense of $5,625, payroll tax expense of $156, and rent expense of $530. Legal and accounting expenses decreased primarily due to a lower volume of advisory services utilized during the period. Payroll and payroll tax expenses increased primarily due to the hiring of new employees. Rent expense increased primarily due to a scheduled rent adjustment under the office lease, effective from September 2024.

Current wording

General and administrative expenses for the six months ended June 30, 2025 and 2024 were $209,567 and $237,942, respectively, representing a decrease of $28,375, or 11.93%. This decrease was primarily due to a reduction in legal and accounting expenses of $68,708, partially offset by increases in depreciation expense of $52, payroll expense of $17,467, payroll tax expense of $1,377, rent expense of $1,194, and other G&A expenses of $20,243. Legal and accounting expenses decreased primarily due to a lower volume of advisory services utilized during the period. Payroll and payroll tax expenses increased primarily due to the hiring of new employees. Rent expense increased primarily due to a scheduled rent adjustment under the office lease, effective from September 2024.

Previous wording

Net income for the three months ended March 31, 2025 and 2024 was $80,629 and $40,292, respectively, representing an increase of $40,337, or 100.11%. This increase was primarily driven by significant growth in net revenues and lower operating expenses.

Current wording

Net income for the six months ended June 30, 2025 and 2024 was $95,047 and $91,180, respectively, representing an increase of $3,867, or 4.24%. This increase was primarily driven by significant growth in net revenues and lower operating expenses.

Previous wording

Cash Flows For the Three Months Ended March 31, 2025 and 2024

Current wording

Cash Flows For the six Months Ended June 30, 2025 and 2024

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $584,143, other current assets of $2,755,445, current liabilities of $866,362, net working capital of $2,473,226, and a current ratio of 3.85:1. As of December 31, 2024, we had cash and cash equivalents of $1,670,949, other current assets of $1,652,699, current liabilities of $944,447, net working capital of $2,379,201, and a current ratio of 3.52:1.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $2,557,245, other current assets of $918,526, current liabilities of $974,439, net working capital of $2,501,332, and a current ratio of 3.57:1. As of December 31, 2024, we had cash and cash equivalents of $1,670,949, other current assets of $1,652,699, current liabilities of $944,447, net working capital of $2,379,201, and a current ratio of 3.52:1.

Previous wording

The following table presented a summary of our cash flows for the three months ended March 31, 2025 and 2024:

Current wording

The following table presented a summary of our cash flows for the six months ended June 30, 2025 and 2024:

Previous wording

Net cash used in operating activities was $893,832 for the three months ended March 31, 2025, primarily derived from (i) net income of $80,629, adjusted for noncash activities including lease expense of $11,337, unrealized loss on trading securities of $11,007, and depreciation of $4,639; (ii) net changes in operating assets and liabilities as of March 31, 2025 compared to December 31, 2024, primarily consisting of (a) an increase in accounts receivable of $1,815,840, (b) an increase in deferred IPO costs of $49,000, (c) an increase in advance to contractor of $26,873, (d) a decrease in accounts payable of $21,300, (e) a decrease in operating lease liabilities of $11,551, and (f) an increase in deferred tax assets of $3,080, partially offset by (a) a decrease in real estate held for sale of $907,061, (b) a decrease in prepaid expenses and other receivables of $9,979, and (c) an increase in other current liabilities of $9,160.

Current wording

Net cash provided by operating activities was $808,583 for the six months ended June 30, 2025, primarily derived from (i) net income of $ $95,048 , adjusted for noncash activities including lease expense of $ 22,673, realized loss on trading securities of $ 2,651, and depreciation of $ 9,407; (ii) net changes in operating assets and liabilities as of June 30, 2025 compared to December 31, 2024, primarily consisting of (a) a decrease of accounts receivable of $18,160, (b) a decrease of real estate held for sale of $907,061, (c) a decrease of prepaid expenses and other receivables of $9,979, partially offset by (a) an increase of deferred tax assets of $3,080, (b) and increase of deferred IPO cost of $201,027, (c) a decrease of accounts payable of $21,300, (d) a decrease of other current liabilities of $7,888, and (e) a decrease of payment of lease liabilities of $23,101.

Previous wording

Net cash used in operating activities was $40,297 for the three months ended March 31, 2024, primarily derived from (i) net income of $40,292, adjusted for noncash activities including lease expense of $11,335 and depreciation of $4,651; (ii) net changes in operating assets and liabilities as of March 31, 2024 compared to December 31, 2023, primarily consisting of (a) an increase in accounts receivable of $115,411, (b) an increase in deferred IPO costs of $50,000, (c) an increase in advance to contractor of $17,940, (d) a decrease in operating lease liabilities of $11,120, and (e) a decrease in accounts payable of $9,131, partially offset by (a) an increase in other current liabilities of $82,019 and (b) a decrease in prepaid expenses and other receivables of $25,008.

Current wording

Net cash used in operating activities was $11,999 for the six months ended June 30, 2024, primarily derived from (i) net income of $91,180 adjusted for noncash activities including: (a) lease expense of $22,673, and (b) depreciation of $9,355, which was partially offset by change in allowance for credit losses of $9,092; (ii) net changes of operating assets and liabilities at June 30, 2024 compared with operating assets and liabilities at December 31, 2023, principally consisting of (a) an increase in deferred IPO costs of $435,677, (b) a decrease in operating lease liabilities of $22,246, (c) an increase in accounts receivable of $18,202, (d) a decrease in accounts payable of $13,203, (e) an increase of prepaid expenses of $7,792, and (f) an increase in security deposits of $2,000, which was partially offset by an increase in other current liabilities of $373,005.

Previous wording

Net cash used in operating activities was $893,832 for the three months ended March 31, 2025, compared to $40,297 for the same period in 2024, representing an increase in cash outflow of $853,535. This increase was primarily due to (i) a decrease in cash inflow of $1,700,429 on accounts receivable, (ii) an increase in cash outflow of $72,859 on other current liabilities, (iii) an increase in cash outflow of $15,029 on prepaid expenses, (iv) an increase in cash outflow of $12,169 on accounts payable, (v) an increase in cash outflow of $8,933 on advance to contractor, (vi) an increase in cash outflow of $3,080 on deferred tax assets, and (vii) an increase in cash outflow of $431 on operating lease liabilities, partially offset by (i) an increase in cash inflow of $907,061 on real estate held for sale, (ii) an increase in cash inflow of $51,334 on net income adjusted for noncash activities, and (iii) a decrease in cash outflow of $1,000 on deferred IPO costs.

Current wording

Net cash provided by operating activities was $808,583 for the six months ended June 30, 2025, compared to $11,999 used by operating activities for the same period in 2024, representing an increase in cash inflow of $ 820,582. This increase was primarily due to (i) an increase in cash inflow of $36,362 on accounts receivable, (ii) an increase in cash inflow of $907,061 on real estate held of sale, (iii) a decrease in cash outflow of $17,771 on prepaid expenses and other receivables, (iv) a decrease in cash outflow of $234,650 on deferred IPO costs, (v) an increase in cash inflow of $2,000 on security deposits, and (vi)an increase in cash inflow of $15,663 on net income adjusted for noncash activities, partially offset by (i) an increase in cash outflow of $3,080 on deferred tax assets, (ii) an increase in cash outflow of $8,097 on accounts payables, (iii) an increase in cash outflow of $380,893 on other current liabilities, and (iv) an increase in cash outflow of $855 on payments of lease liabilities.

Previous wording

Net cash used in investing activities was $136,000 for the three months ended March 31, 2025, which primarily consisted of purchases of trading securities totaling $136,000.

Current wording

Net cash used in investing activities was $2,651 for the six months ended June 30, 2025, which primarily consisted of purchases of trading securities for $274,718 and proceeds from sale of trading securities for $272,067.

Previous wording

Net cash used in investing activities was $2,463 for the three months ended March 31, 2024, which primarily consisted of purchases of office equipment for $1,082, furniture for $982, and a trademark for $399.

Current wording

Net cash used in investing activities was $2,463 for the six months ended June 30, 2024, which primarily consisted of purchases of furniture and equipment of $2,064 and a trademark for $399.

Previous wording

Net cash provided by financing activities was $928,143 for the three months ended March 31, 2024, which primarily consisted of proceeds from equity financing of $930,000, partially offset by repayments of $1,857 on an auto loan.

Current wording

Net cash provided by financing activities was $1,023,257 for the six months ended June 30, 2024, which primarily included proceeds from shares issued in equity financing of $930,000, and proceeds from related party advance of $530,000, partially offset by repayments to related party advance of $433,000, and repayments to auto loan of $3,743.

Previous wording

The Company also offers a full range of home renovation services, from bathroom and kitchen renovations to customized home renovations and extensions, helping clients prepare their homes for sale or personalize newly purchased properties. The Company considers itself as a principal for this service as it has control of the specified service at any time before it is transferred to the customer, which is evidenced by (i) the Company is primarily responsible for fulfilling the promises to provide home renovation services meeting customer specifications, and assumes fulfilment risk (i.e., risk that the performance obligation will not be satisfied); and (ii) the Company has discretion in selecting third-party renovation contractors and establishing the price, and bears the risk for services that are not fully paid for by customers. The renovation period is usually within one to three months; the Company recognizes revenue when the renovation service is completed, on a gross basis with corresponding costs incurred.

Current wording

The Company also offers a full range of home renovation services, from bathroom and kitchen renovations to customized home renovations and extensions, helping clients prepare their homes for sale or personalize newly purchased properties. The Company considers itself as a principal for this service as it has control of the specified service at any time before it is transferred to the customer, which is evidenced by (i) the Company is primarily responsible for fulfilling the promises to provide home renovation services meeting customer specifications, and assumes fulfillment risk (i.e., risk that the performance obligation will not be satisfied); and (ii) the Company has discretion in selecting third-party renovation contractors and establishing the price, and bears the risk for services that are not fully paid for by customers. The renovation period is usually within one to six months; the Company recognizes revenue when the renovation service is completed, on a gross basis with corresponding costs incurred.

Previous wording

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for credit losses. The Company maintains allowances for credit losses for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment pattens and creditworthiness, current economic conditions, and reasonable and supportable forecasts of future economic conditions. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2025 and December 31, 2024, the Company had no allowances for credit losses.

Current wording

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for credit losses. The Company maintains allowances for credit losses for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment patterns and creditworthiness, current economic conditions, and reasonable and supportable forecasts of future economic conditions. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2025 and December 31, 2024, the Company had no allowances for credit losses.

Previous wording

The Company evaluates events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such a determination is made. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on the above analysis, no impairment loss was recognized related to these assets for the three months ended March 31, 2025 and 2024.

Current wording

The Company evaluates events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such a determination is made. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on the above analysis, no impairment loss was recognized related to these assets for the six months ended June 30, 2025 and 2024.

Previous wording

Under the provisions of FASB ASC Topic 740, when tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. For the three months ended March 31, 2025 and 2024, the Company did not take any uncertain positions that would necessitate recording a tax related liability.

Current wording

Under the provisions of FASB ASC Topic 740, when tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. For the six months ended June 30, 2025 and 2024, the Company did not take any uncertain positions that would necessitate recording a tax related liability.