Greenland Technologies Holding Corp.

Previous wording

Through its subsidiaries in the PRC, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue increased from approximately $21.68 million for the three months ended March 31, 2025 to $25.54 million for the three months ended March 31, 2026. The increase in revenue was primarily the result of an increase of approximately $3.99 million in the Company’s sales volume of transmission products for the three months ended March 31, 2026. Based on its revenues for the three months ended March 31, 2026 and 2025, Greenland believes that it is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China.

Current wording

Through its subsidiaries in the PRC, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue increased from approximately $43.40 million for the six months ended June 30, 2025 to $55.42 million for the six months ended June 30, 2026. The increase in revenue was primarily the result of an increase of approximately $12.10 million in the Company’s sales volume of transmission products for the six months ended June 30, 2026. Based on its revenues for the six months ended June 30, 2026 and 2025, Greenland believes that it is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China.

Previous wording

Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products directly to forklift-truck manufacturers. For the three months ended March 31, 2026 and 2025, Greenland sold an aggregate of 46,027 and 38,734 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.

Current wording

Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products directly to forklift-truck manufacturers. For the six months ended June 30, 2026 and 2025, Greenland sold an aggregate of 99,270 and 81,642 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.

Previous wording

Greenland’s revenue was approximately $25.54 million for the three months ended March 31, 2026, representing an increase of approximately $3.86 million, or 17.8%, as compared to that of approximately $21.68 million for the three months ended March 31, 2025. The increase in revenue was primarily a result of the increase of approximately $3.99 million in the Company’s sales volume of transmission products for the three months ended March 31, 2026. For the three months ended March 31, 2026, the Company sold an aggregate of 46,027 sets of transmission products, compared to 38,734 sets sold in the three months ended March 31, 2025. This represents an increase of approximately 7,293 units, or approximately 18.8%. The sales volume growth was driven by sustained demand from the Company’s customer base in the material handling sector.

Current wording

Greenland’s revenue was approximately $29.88 million for the three months ended June 30, 2026, representing an increase of approximately $8.16 million, or 37.6%, as compared to that of approximately $21.72 million for the three months ended June 30, 2025. The increase in revenue was primarily attributable to an increase of approximately $8.12 million in the Company’s sales volume of transmission products for the three months ended June 30, 2026, which was primarily driven by a favorable shift in product mix toward higher-value hydraulic transmission products and increased demand from the Company’s customer base in the material handling sector. . For the three months ended June 30, 2026, the Company sold an aggregate of 53,243 sets of transmission products, compared to 42,908 sets sold in the three months ended June 30, 2025, representing an increase of approximately 10,335 units, or approximately 24.1%.

Previous wording

Greenland’s cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the Company’s manufacturing activities. The write down of inventory using the net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold was approximately $16.78 million for the three months ended March 31, 2026, representing an increase of approximately $1.76 million, or 11.7%, as compared to that of approximately $15.02 million for the three months ended March 31, 2025. Cost of goods sold increased due to the increase in our sales volume.

Current wording

Greenland’s cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the Company’s manufacturing activities. The write-down of inventory using the net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold was approximately $20.34 million for the three months ended June 30, 2026, representing an increase of approximately $4.37 million, or 27.3%, as compared to that of approximately $15.97 million for the three months ended June 30, 2025. The increase in cost of goods sold was primarily attributable to the increase in the Company’s sales volume.

Previous wording

Greenland’s gross profit was approximately $8.76 million for the three months ended March 31, 2026, representing an increase of approximately $2.10 million, or 31.5%, as compared to that of approximately $6.66 million for the three months ended March 31, 2025. For the three months ended March 31, 2026 and 2025, Greenland’s gross margins were approximately 34.3% and 30.7%, respectively. The increase in gross profit in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to the increase in our sales volume and a shift in Greenland’s product mix towards higher value and more sophisticated products, such as hydraulic transmission products.

Current wording

Greenland’s gross profit was approximately $9.54 million for the three months ended June 30, 2026, representing an increase of approximately $3.79 million, or 65.9%, as compared to that of approximately $5.75 million for the three months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, Greenland’s gross margins were approximately 31.9% and 26.5%, respectively. The increase in gross profit for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was primarily attributable to the increase in the Company’s sales volume and a shift in the Company’s product mix toward higher-value and more sophisticated products, such as hydraulic transmission products.

Previous wording

Selling expenses mainly comprise of operating expenses such as sales staff payroll, traveling expenses, and transportation expenses. Our selling expenses were approximately $0.42 million for the three months ended March 31, 2026, representing an increase of approximately $0.09 million, or 26.3%, as compared to approximately $0.33 million for the three months ended March 31, 2025. The increase in selling expenses was mainly due to an increase in the shipping expenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Selling expenses consist primarily of operating expenses such as sales staff payroll, traveling expenses, and transportation expenses. Greenland’s selling expenses were approximately $1.67 million for the three months ended June 30, 2026, representing an increase of approximately $0.67 million, or 66.8%, as compared to approximately $1.00 million for the three months ended June 30, 2025. The increase in selling expenses was primarily attributable to an increase in after-sales service fees for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

Previous wording

General and administrative expenses comprise of management and staff salaries, employee benefits, depreciation for office facility and office furniture and equipment, travel and entertainment expenses, legal and accounting fees, financial consulting fees, and other office expenses. General and administrative expenses were approximately $1.84 million for the three months ended March 31, 2026, representing an increase of approximately $0.40 million, or 28.0%, as compared to that of approximately $1.44 million for the three months ended March 31, 2025. The increase in general and administrative expenses was mainly due to an increase of approximately $0.53 million in consultancy fees offset by a decrease of approximately $0.09 million in employee salary for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Current wording

General and administrative expenses consist of management and staff salaries, employee benefits, depreciation for office facility and office furniture and equipment, travel and entertainment expenses, legal and accounting fees, financial consulting fees, and other office expenses. General and administrative expenses were approximately $0.84 million for the three months ended June 30, 2026, representing a decrease of approximately $5.79 million, or 87.4%, as compared to that of approximately $6.63 million for the three months ended June 30, 2025. The decrease in general and administrative expenses was primarily attributable to the decrease in stock-based compensation expense, offset by the increase in provision for inventory for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. On May 1, 2025, the Company issued a total of 3,799,696 ordinary shares to employees as compensation and recorded stock-based compensation of approximately $6.95 million.

Previous wording

R&D expenses consist of R&D personnel compensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses were approximately $0.78 million for the three months ended March 31, 2026, representing an increase of approximately $0.70 million, or 855.4%, as compared to that of approximately $0.08 million for the three months ended March 31, 2025. Such increase was primarily attributable to a significant increase in the Company’s R&D activities during the three months ended March 31, 2026.

Current wording

R&D expenses consist of R&D personnel compensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses were approximately $1.05 million for the three months ended June 30, 2026, representing an increase of approximately $0.60 million, or 135.9%, as compared to that of approximately $0.44 million for the three months ended June 30, 2025. The increase was primarily attributable to a significant increase in the Company’s R&D activities during the three months ended June 30, 2026.

Previous wording

Income from operations for the three months ended March 31, 2026 was approximately $5.72 million, representing an increase of approximately $0.91 million, as compared to that of approximately $4.81 million for the three months ended March 31, 2025.

Current wording

Income (loss) from operations for the three months ended June 30, 2026 was approximately $5.98 million, representing an increase of approximately $8.31 million, as compared to that of approximately $(2.32) million for the three months ended June 30, 2025.

Previous wording

Greenland’s interest expenses were approximately $0.03 million for the three months ended March 31, 2026, representing an increase of approximately $0.03 million, or 100.0%, as compared to nil for the three months ended March 31, 2025. The increase was primarily due to an increase in interest expense on the discounted note for the three months ended March 31, 2026, compared to those for the three months ended March 31, 2025.

Current wording

Greenland’s interest expenses were approximately $0.01 million for the three months ended June 30, 2026, representing an increase of approximately $0.01 million, or 100.0%, as compared to nil for the three months ended June 30, 2025. The increase was primarily attributable to an increase in interest expense on the discounted note for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

Previous wording

Greenland’s income tax was approximately $1.00 million for the three months ended March 31, 2026, as compared to that of approximately $0.88 million for the three months ended March 31, 2025.

Current wording

Greenland’s income tax was approximately $1.24 million for the three months ended June 30, 2026, as compared to that of approximately $0.85 million for the three months ended June 30, 2025.

Previous wording

Zhejiang Zhongchai obtained a “high-tech enterprise” status near the end of the fiscal year of 2022. Such status allows Zhejiang Zhongchai to enjoy a reduced statutory income tax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. Income tax for the three months ended March 31, 2026 and 2025 were calculated based on a rate of 15%. The “high-tech enterprise” status is reevaluated by relevant Chinese government agencies every three years. Zhejiang Zhongchai’s current “high-tech enterprise” status will be reevaluated near the end of 2028.

Current wording

Zhejiang Zhongchai obtained “high-tech enterprise” status near the end of the fiscal year of 2022. Such designation entitles Zhejiang Zhongchai to a reduced statutory income tax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. Income taxes for the three and six months ended June 30, 2026 and 2025 were calculated based on a rate of 15%. The “high-tech enterprise” status is reevaluated by the relevant Chinese government agencies every three years. Zhejiang Zhongchai’s current “high-tech enterprise” status will be reevaluated near the end of 2028.

Previous wording

On January 14, 2020, Greenland established HEVI, its wholly owned subsidiary in the state of Delaware. HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market. On December 22, 2017, the U.S. federal government enacted the 2017 Tax Act. The 2017 Tax Act includes a number of changes in existing tax law impacting businesses, including the transition tax, a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, and accordingly, the effects must be recognized on companies’ calendar year-end financial statements, even though the effective date for most provisions is January 1, 2018. Since HEVI was established in 2020, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of March 31, 2026.

Current wording

On January 14, 2020, Greenland established HEVI, its wholly owned subsidiary in the State of Delaware. HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market. On December 22, 2017, the U.S. federal government enacted the 2017 Tax Act. The 2017 Tax Act includes a number of changes in existing tax law impacting businesses, including the transition tax, a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, and accordingly, the effects must be recognized on companies’ calendar year-end financial statements, even though the effective date for most provisions is January 1, 2018. Since HEVI was established in 2020, the one-time transition tax did not have any impact on the Company’s tax provision and there were no undistributed accumulated earnings and profits as of June 30, 2026.

Previous wording

On March 26, 2024, the Company entered into a share exchange agreement with Greenland Holding Enterprises Inc. and Zhongchai Holding (the “2024 Share Exchange Agreement”). Pursuant to the 2024 Share Exchange Agreement, Greenland Holding Enterprises Inc. issued 100 shares of common stock to the Company, par value $0.01 per share, representing all issued and outstanding share capital of Greenland Holding Enterprises Inc., in exchange for 100% of the equity interest of Zhongchai Holding. Greenland Holding Enterprises Inc. is a holding company registered on August 28, 2023 in the State of Delaware with no material operations. Since Greenland Holding Enterprises Inc. was established in 2023, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of as of March 31, 2026.

Current wording

On March 26, 2024, the Company entered into a share exchange agreement with Greenland Holding Enterprises Inc. and Zhongchai Holding (the “2024 Share Exchange Agreement”). Pursuant to the 2024 Share Exchange Agreement, Greenland Holding Enterprises Inc. issued 100 shares of common stock to the Company, par value $0.01 per share, representing all issued and outstanding share capital of Greenland Holding Enterprises Inc., in exchange for 100% of the equity interest of Zhongchai Holding. Greenland Holding Enterprises Inc. is a holding company registered on August 28, 2023 in the State of Delaware with no material operations. Since Greenland Holding Enterprises Inc. was established in 2023, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of June 30, 2026.

Previous wording

Our net income was approximately $5.75 million for the three months ended March 31, 2026, representing an increase of approximately $1.19 million, as compared to that of approximately $4.56 million for the three months ended March 31, 2025.

Current wording

Our net income was approximately $4.94 million for the three months ended June 30, 2026, representing an increase of approximately $7.70 million, as compared to a net loss of approximately $2.76 million for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, our PRC subsidiary, Zhejiang Zhongchai, paid approximately $1.44 million in dividends, extended approximately $4.00 million in loans to third parties, and maintained approximately $10.61 million in cash on hand. We plan to maintain the current debt structure and rely on government-supported loans at lower cost, if necessary.

Current wording

For the six months ended June 30, 2026, our PRC subsidiary, Zhejiang Zhongchai, paid approximately $1.46 million in dividends, extended approximately $11.41 million in loans to third parties, and maintained approximately $40.01 million in cash on hand. We plan to maintain the current debt structure and rely on government-supported loans at lower cost, if necessary.

Previous wording

Government subsidies mainly consist of an incentive granted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinese government. Government subsidies are recognized when there is reasonable assurance that the subsidy will be received, and all conditions be completed. Total government subsidies recorded under long-term liabilities were $1.04 million and $1.08 million as of March 31, 2026 and December 31, 2025, respectively.

Current wording

Government subsidies primarily consist of incentives granted by the Chinese government to encourage the transformation of fixed assets in China and other miscellaneous subsidies from the Chinese government. Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all conditions have been met. Total government subsidies recorded under long-term liabilities were $0.88 million and $1.08 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

The Company currently plans to fund its operations mainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial support from its shareholders and affiliates controlled by its principal shareholders, if necessary. The Company might implement a stricter policy on sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances. The Company is actively working with customers and suppliers and expects to fully collect the remaining balance.

Current wording

The Company currently plans to fund its operations primarily through cash flow from operations, renewal of bank borrowings, additional equity financing, and, if necessary, continued financial support from its shareholders and affiliates controlled by its principal shareholders. The Company may implement a stricter policy on sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances. The Company is actively working with its customers and suppliers and expects to fully collect the remaining balances.

Previous wording

We believe that the Company has sufficient cash, even with uncertainty in the Company’s manufacturing and sale of electric industrial heavy equipment in the future and potential fluctuations in demand for our transmission products. We believe our existing funding sources will be sufficient to fund our operations for the next 12 months. We remain confident and expect to continue to generate positive cash flow from our operations.

Current wording

The Company believes that it has sufficient cash to fund its operations, notwithstanding uncertainty in the Company’s manufacturing and sale of electric industrial heavy equipment in the future and potential fluctuations in demand for the Company’s transmission products. The Company believes its existing funding sources will be sufficient to fund its operations for the next twelve months. The Company remains confident and expects to continue to generate positive cash flow from its operations.

Previous wording

We may need additional cash resources in the future, if the Company experiences failure in collecting account receivables, changes in business conditions, changes in financial conditions, or other developments. We may also need additional cash resources, if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation, or other similar actions. If the Company’s management and its board of directors determine that the cash required for specific corporate activities exceed Greenland’s cash and cash equivalents on hand, the Company may issue debt or equity securities to raise cash.

Current wording

The Company may need additional cash resources in the future if it experiences a failure to collect accounts receivable, changes in business conditions, changes in financial conditions, or other developments. The Company may also need additional cash resources if it wishes to pursue opportunities for investment, acquisition, strategic cooperation, or other similar actions. If the Company’s management and its board of directors determine that the cash required for specific corporate activities exceeds Greenland’s cash and cash equivalents on hand, the Company may issue debt or equity securities to raise additional capital.

Previous wording

Historically, we have expended considerable resources on building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that our cash flow will continue to improve for the remainder of fiscal year 2026. More specifically, Zhejiang Zhongchai can pledge the deed of its factory as a collateral to banks in order to obtain loans, refinance expiring loans, restructure short-term loans, and fund other working capital needs upon acceptable terms to Greenland.

Current wording

Historically, the Company has expended considerable resources on building a new factory and repaying a considerable amount of debt, resulting in reduced available cash. However, the Company anticipates that its cash flow will continue to improve for the remainder of fiscal year 2026. More specifically, Zhejiang Zhongchai can pledge the deed of its factory as collateral to banks in order to obtain loans, refinance expiring loans, restructure short-term loans, and fund other working capital needs upon terms acceptable to Greenland.

Previous wording

Cash equivalents refer to all highly liquid investments purchased with original maturity of three months or less. As of March 31, 2026, Greenland had approximately $10.39 million of cash and cash equivalents, representing an increase of approximately $2.62 million, or 33.66%, as compared to approximately $7.78 million as of December 31, 2025. The increase of cash and cash equivalents was mainly due to a decrease in short-term investment, as compared to that as of December 31, 2025.

Current wording

Cash equivalents refer to all highly liquid investments purchased with an original maturity of three months or less. As of June 30, 2026, Greenland had approximately $8.98 million of cash and cash equivalents, representing an increase of approximately $1.21 million, or 15.5%, as compared to approximately $7.78 million as of December 31, 2025. The increase in cash and cash equivalents was primarily attributable to a decrease in short-term investments, as compared to that as of December 31, 2025.

Previous wording

Restricted cash represents the amount held by a bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired, which typically takes less than twelve months. As of March 31, 2026, Greenland had approximately $0.22 million of restricted cash, representing an increase of approximately $0.14 million, or 200.59%, as compared to that of approximately $0.07 million as of December 31, 2025. The increase in restricted cash was due to an increase in notes payable collateralized by cash.

Current wording

Restricted cash represents amounts held by a bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired, which typically takes less than twelve months. As of June 30, 2026, Greenland had no restricted cash, representing a decrease of approximately $0.07 million, or 100.0%, as compared to approximately $0.07 million as of December 31, 2025. The decrease in restricted cash was primarily attributable to a decrease in notes payable collateralized by cash.

Previous wording

As of March 31, 2026, Greenland had approximately $25.89 million of accounts receivables, an increase of approximately $8.63 million, or 50.00%, as compared to approximately $17.26 million as of December 31, 2025. The increase in accounts receivable was due to the increase in our sales volume and our slowed-down efforts in receivables collections.

Current wording

As of June 30, 2026, Greenland had approximately $30.47 million of accounts receivable, an increase of approximately $13.22 million, or 76.59%, as compared to approximately $17.26 million as of December 31, 2025. The increase in accounts receivable was primarily attributable to the increase in the Company’s sales volume and a moderation in the Company’s receivables collection efforts.

Previous wording

Greenland recorded approximately $0.02 million and $0.02 million of allowance for expected credit losses as of March 31, 2026 and December 31, 2025, respectively. Greenland conducted an aging analysis of each customer’s delinquent payments to determine whether allowance for expected credit losses is adequate. In establishing the allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected collectability of past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer probable. When bad debts are identified, such debts are written off against the allowance for expected credit losses. Greenland will continuously assess its expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine whether its allowance for expected credit losses on its accounts receivable is adequate. Greenland believes that its collection policies are generally in line with the transmissions industry’s standard in the PRC.

Current wording

Greenland recorded approximately $0.06 million and $0.02 million of allowance for expected credit losses as of June 30, 2026 and December 31, 2025, respectively. Greenland conducted an aging analysis of each customer’s delinquent payments to determine whether allowance for expected credit losses is adequate. In establishing the allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected collectability of past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer probable. When bad debts are identified, such debts are written off against the allowance for expected credit losses. Greenland will continuously assess its expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine whether its allowance for expected credit losses on its accounts receivable is adequate. Greenland believes that its collection policies are generally in line with the transmissions industry’s standard in the PRC.

Previous wording

As of March 31, 2026, Greenland had approximately $18.73 million of notes receivable, which Greenland expects to collect within the next twelve months. The increase was approximately $4.03 million, or 27.40%, as compared to approximately $14.70 million as of December 31, 2025.

Current wording

As of June 30, 2026, Greenland had approximately $22.15 million of notes receivable, which Greenland expects to collect within the next twelve months. The increase was approximately $7.44 million, or 50.62%, as compared to approximately $14.70 million as of December 31, 2025.

Previous wording

Our working capital was approximately $56.08 million as of March 31, 2026, as compared to $46.97 million as of December 31, 2025. The increase in working capital of $9.11 million was primarily attributable to an increase in accounts receivable and prepayments and other current assets.

Current wording

Greenland’s working capital was approximately $62.06 million as of June 30, 2026, as compared to $46.97 million as of December 31, 2025. The increase in working capital of $15.61 million was primarily attributable to an increase in accounts receivable and notes receivable.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 was approximately $1.19 million, resulting primarily from net income of approximately $5.75 million, adjusted for non-cash item of depreciation and amortization expenses of approximately $0.52 million, change in fair value of warrant liability of approximately $0.05 million, change in accrued expense of approximately $(1.82) million and changes in operating assets and liabilities including: (i) an increase of approximately $8.36 million in accounts receivable due to the increase in our sales volume, (ii) an increase of approximately $3.81 million in notes receivables, and (iii) an increase of approximately $7.58 million in accounts payable because we extended the payment cycle.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 was approximately $0.09 million, resulting primarily from net income of approximately $10.69 million, adjusted for non-cash items of depreciation and amortization expenses of approximately $1.05 million, a change in fair value of warrant liability of approximately $(0.05) million, a change in accrued expenses of approximately $(0.68) million, and changes in operating assets and liabilities including: (i) an increase of approximately $12.59 million in accounts receivable due to the increase in our sales volume, (ii) an increase of approximately $6.91 million in notes receivable as customers increasingly utilized bank acceptance notes as a payment method in line with industry practice, and (iii) an increase of approximately $8.55 million in accounts payable due to an extended payment cycle and increased procurement to support higher sales volume.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 was approximately $1.24 million, primarily attributable to net income of approximately $4.56 million, adjusted for non-cash item of depreciation and amortization expenses of approximately $0.52 million, change in fair value of warrant liability of approximately $(0.21) million, change in accrued expense of approximately $(2.59) million and changes in operating assets and liabilities including: (i) an increase of approximately $6.06 million in accounts payable because we extended the payment cycle, (ii) an increase of approximately $5.53 million in accounts receivable due to our slowed-down efforts in receivables collections, (iii) a decrease of approximately $2.18 million in notes receivables because we prioritized collecting cash rather than accepting notes receivables, and (ⅳ) a decrease of approximately $5.22 million due to related parties.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was approximately $0.46 million, resulting primarily from net income of approximately $1.80 million, adjusted for non-cash items of depreciation and amortization expenses of approximately $1.04 million and stock-based compensation expense of approximately $6.95 million, and changes in operating assets and liabilities including: (i) an increase of approximately $6.04 million in accounts payable because we extended the payment cycle, (ii) an increase of approximately $5.98 million in accounts receivable primarily due to a slowdown in our receivables collection efforts, (iii) a decrease of approximately $5.98 million in other current and non-current assets primarily reflecting the reclassification of cash into fixed deposits, and (iv) a decrease of approximately $5.21 million in due to related parties because we repaid the related party payable of $5.21 million during the period.

Previous wording

Net cash used in investing activities resulted in cash outflow of approximately $4.17 million for the three months ended March 31, 2026. Cash used in investing activities for the three months ended March 31, 2026 was mainly due to approximately $0.17 million used for purchases of long-term assets and approximately $4.00 million loaned to third parties.

Current wording

Net cash used in investing activities resulted in a cash outflow of approximately $10.64 million for the six months ended June 30, 2026. Cash used in investing activities for the six months ended June 30, 2026 was mainly due to approximately $1.35 million used for purchases of long-term assets and approximately $11.41 million loaned to third parties, partially offset by approximately $2.12 million in repayments of loans lent to third parties.

Previous wording

Net cash used in investing activities resulted in cash outflow of approximately $0.70 million for the three months ended March 31, 2025. Cash used in investing activities for the three months ended March 31, 2025 was mainly due to approximately $0.01 million used for purchases of long-term assets and approximately $0.69 million loaned to third parties.

Current wording

Net cash used in investing activities resulted in a cash outflow of approximately $0.57 million for the six months ended June 30, 2025, which was mainly attributable to approximately $0.15 million used for purchases of long-term assets and approximately $0.69 million loaned to third parties.

Previous wording

Net cash provided by financing activities resulted in a cash inflow of approximately $8.14 million for the three months ended March 31, 2026, which was mainly attributable to approximately $3.49 million change in notes payable and approximately $5.59 million proceeds from equity and debt financing offset by approximately $1.44 million in dividend.

Current wording

Net cash provided by financing activities resulted in a cash inflow of approximately $11.66 million for the six months ended June 30, 2026, which was primarily attributable to approximately $7.03 million in net change in notes payable and approximately $5.58 million in proceeds from equity and debt financing, partially offset by approximately $1.46 million in dividends paid.

Previous wording

Net cash used in financing activities resulted in a cash outflow of approximately $1.77 million for the three months ended March 31, 2025, which was mainly attributable to approximately $1.00 million in repayment of loans from related parties and approximately $0.58 million change in notes payable.

Current wording

Net cash used in financing activities resulted in a cash outflow of approximately $2.86 million for the six months ended June 30, 2025, which was primarily attributable to approximately $1.00 million in repayment of loans from related parties and approximately $1.67 million in repayment of notes payable.

Previous wording

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of March 31, 2026, cash and cash equivalents of $40,412,787 were deposited in financial institutions in the PRC, and each bank account is insured by the PRC government with the maximum limit of RMB500,000 (equivalent to $69,800). To limit exposure to credit risk relating to deposits, the Company primarily places cash and cash equivalent with large financial institutions in China which management believes are of high credit quality and the Company also continually monitors their credit worthiness.

Current wording

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as of the balance sheet dates. As of June 30, 2026, cash and cash equivalents of $35,111,541 were deposited in financial institutions in the PRC, and each bank account is insured by the PRC government up to a maximum limit of RMB500,000 (equivalent to $69,800). To limit exposure to credit risk relating to deposits, the Company primarily places cash and cash equivalents with large financial institutions in China, which management believes are of high credit quality, and the Company also continually monitors their creditworthiness.

Previous wording

A significant portion of the Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.

Current wording

A significant portion of the Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other factors.

Previous wording

The Company cannot guarantee that the current exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and yet, because of the fluctuating exchange rate, record higher or lower profit depending on exchange rate of RMB converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without notice.

Current wording

The Company cannot guarantee that the current exchange rate will remain steady. Accordingly, there is a possibility that the Company could post the same amount of profit for two comparable periods and yet, due to fluctuating exchange rates, record higher or lower profit depending on the exchange rate of RMB converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without notice.

Previous wording

Accounts receivable are typically unsecured and derived from goods sold to customers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables with specific customers. As of March 31, 2026, one customer accounted for 16.44% of total accounts receivable. As of December 31, 2025, three customers accounted for 11.24%, 10.24% and 10.12% of total accounts receivable, respectively. No other customers accounted for more than 10% of the Company’s total accounts receivable as of March 31, 2026 and December 31, 2025.

Current wording

Accounts receivable are typically unsecured and derived from revenue generated by goods sold to customers located primarily in China, thereby exposing the Company to credit risk. Such risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables with specific customers. As of June 30, 2026, one customer accounted for 14.64% of total accounts receivable. As of December 31, 2025, three customers accounted for 11.24%, 10.24%, and 10.12% of total accounts receivable, respectively. No other customer accounted for more than 10% of the Company’s total accounts receivable as of June 30, 2026 or December 31, 2025.

Previous wording

For the three months ended March 31, 2026, one customer accounted for 16.69% of total revenue. For the three months ended March 31, 2025, one customer accounted for 17.77% of total revenue. No other customers accounted for more than 10% of the Company’s total revenue for the three months ended March 31, 2026 and 2025.

Current wording

For the six months ended June 30, 2026, one customer accounted for 13.97% of total revenue. For the six months ended June 30, 2025, one customer accounted for 16.33% of total revenue. No other customer accounted for more than 10% of the Company’s total revenue for the six months ended June 30, 2026 or 2025.

Previous wording

There were no suppliers representing more than 10% of the Company’s total purchases for the three months ended March 31, 2026 and 2025, respectively.

Current wording

There were no suppliers representing more than 10% of the Company’s total purchases for the six months ended June 30, 2026 or 2025.

Previous wording

We prepare our consolidated financial statements in accordance with U.S. GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts, circumstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us. Material changes in certain of the estimates that we use could potentially affect, by a material amount, our consolidated financial position and results of operations. Although results may vary, we believe our estimates are reasonable and appropriate. See Note 2 to our consolidated financial statements included in “Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” for a summary of our significant accounting policies. The following describes certain of our significant accounting policies that involve more subjective and complex judgments where the effect on our consolidated financial position and operating performance could be material.

Current wording

We prepare our consolidated financial statements in accordance with U.S. GAAP. In applying accounting principles, it is often necessary to use estimates. These estimates consider the facts, circumstances, and information available, and may be based on subjective inputs, assumptions, and information known and unknown to us. Material changes in certain of the estimates that we use could potentially affect, by a material amount, our consolidated financial position and results of operations. Although results may vary, we believe our estimates are reasonable and appropriate. See Note 2 to our consolidated financial statements included in “Part I, Item 1 — Financial Statements” for a summary of our significant accounting policies. The following describes certain of our significant accounting policies that involve more subjective and complex judgments where the effect on our consolidated financial position and operating performance could be material.