# EDGAR Filing Document

**Accession Number:** 0001868395
**File Stem:** 0001213900-25-088184
**Filing Date:** 2025-9
**Character Count:** 140600
**Document Hash:** 516d6c40ab5efd38f3a5855e4fa27b7d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-088184.hdr.sgml**: 20250916

**ACCESSION NUMBER**: 0001213900-25-088184

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 94

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250916

**DATE AS OF CHANGE**: 20250916

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Planet Image International Ltd
- **CENTRAL INDEX KEY:** 0001868395
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMPUTER PERIPHERAL EQUIPMENT, NEC [3577]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41928
- **FILM NUMBER:** 251317439

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 756 GUANGFU ROAD
- **STREET 2:** HI-TECH DEVELOPMENT ZONE
- **CITY:** XINYU CITY, JIANGXI PROVINCE
- **PROVINCE COUNTRY:** F4
- **BUSINESS PHONE:** 86-0790-7138216

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 756 GUANGFU ROAD
- **STREET 2:** HI-TECH DEVELOPMENT ZONE
- **CITY:** XINYU CITY, JIANGXI PROVINCE
- **PROVINCE COUNTRY:** F4

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER**

**PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

**For the month of September 2025**

**Commission File Number: 001-41928**

**Planet Image International Limited**

**No. 756 Guangfu Road**

**Hi-tech Development Zone**

**Xinyu City, Jiangxi Province**

**People's Republic of China**

**+86 0790-7138216**

**(Address of principal executive office)**

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒&nbsp;&nbsp;&nbsp;&nbsp; Form 40-F ☐

**Explanatory Note**

Planet Image International Limited (the "Company") is filing this current report on Form 6-K to report its financial results for the six months ended June 30, 2025 and to discuss its recent corporate developments.

Attached as exhibits to this current report on Form 6-K are:

(1) the unaudited condensed interim consolidated financial statements and related notes as Exhibit 99.1;

(2) Management's Discussion and Analysis of Financial Condition and Results of Operations as Exhibit 99.2; and

(3) Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T.

This current report on Form 6-K is being incorporated by reference into the registration statement on [Form F-3](http://www.sec.gov/Archives/edgar/data/1868395/000121390025050771/ea0244123-f3_planet.htm) of the Company (File No. 333-287740), declared effective by the U.S. Securities and Exchange Commission on July 3, 2025.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Statements in this current report with respect to the Company's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "intend," "seek," "may," "might," "could" or "should," and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.

All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Consolidated Financial Statements and Related Notes as of June 30, 2025 and for the Six Months Ended June 30, 2025 and 2024](ea025717101ex99-1_planet.htm) |
| 99.2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](ea025717101ex99-2_planet.htm) |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Planet Image International Limited** | **Planet Image International Limited** |
| Date: September 16, 2025 | By: | /s/ Shaofang Weng |
|  | Name: | Shaofang Weng |
|  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.1**

**PLANET IMAGE INTERNATIONAL LIMITED**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page(s)** |
| [Condensed Consolidated Balance Sheets as of December 31, 2024 and June 30, 2025 (Unaudited)](#a_001) | F-2 |
| [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the Six Months Ended June 30, 2024, and 2025](#a_002) | F-3 |
| [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2024 and 2025](#a_003) | F-4 |
| [Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2025](#a_004) | F-5 |
| [Notes to the Unaudited Condensed Consolidated Financial Statements](#a_005) | F-6 – F-26 |

---

**PLANET IMAGE INTERNATIONAL LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amount in thousands of U.S. dollars, except for share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,**<br>**2024** | **As of <br> June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| **Assets** |  |  |
| **Current assets:** |  |  |
| Cash and cash equivalents | $42997 | $52269 |
| Restricted cash | 2889 | 593 |
| Short-term investments | 6464 | 2565 |
| Accounts receivable, net | 31640 | 36995 |
| Inventories, net | 20616 | 13998 |
| Prepaid expenses and other current assets | 10916 | 7932 |
| **Total current assets** | **115522** | **114352** |
| **Non-current assets:** |  |  |
| Property, plant and equipment, net | 8200 | 8025 |
| Right-of-use assets, net | 3228 | 5983 |
| Deferred tax assets, net | 1528 | 1533 |
| Long-term investments | 10293 | 10353 |
| Other non-current assets | 151 | 105 |
| **Total non-current assets** | **23400** | **25999** |
| **TOTAL ASSETS** | $**138922** | $**140351** |
| **Liabilities and Shareholders' Equity** |  |  |
| **Current liabilities:** |  |  |
| Short-term borrowings | $23438 | $31268 |
| Accounts payable | 26058 | 21525 |
| Bank acceptance notes payable | 13753 | 10840 |
| Amounts due to related parties – current | 155 | 105 |
| Accrued expenses and other current liabilities | 13239 | 9948 |
| Derivative liabilities | 26 |  |
| Operating lease liabilities – current | 1027 | 1392 |
| Taxes payable | 2168 | 2300 |
| **Total current liabilities** | **79864** | **77378** |
| **Non-current liability:** |  |  |
| Operating lease liabilities – non-current | 2172 | 4786 |
| **Total non – current liability** | **2172** | **4786** |
| **TOTAL LIABILITIES** | $**82036** | $**82164** |
| **Commitments and Contingencies** |  |  |
| **Shareholders' equity** |  |  |
| Preferred shares (par value of HK$0.0001 per share; 800,000,000 preferred shares authorized, nil preferred shares issued and outstanding as of December 31, 2024 and June 30, 2025) |  |  |
| Class A ordinary shares (par value of HK$0.0001 per share; 2,000,000,000 Class A ordinary shares authorized, 27,565,800 and 32,918,421 Class A ordinary shares issued and outstanding as of December 31, 2024 and June 30, 2025, respectively)\* | 1 | 1 |
| Class B ordinary shares (par value of HK$0.0001 per share; 1,000,000,000 Class B ordinary shares authorized, 26,315,800 Class B ordinary shares issued and outstanding as of December 31, 2024 and June 30, 2025)\* | 1 | 1 |
| Additional paid-in capital | 17405 | 26050 |
| Statutory reserve | 3193 | 3193 |
| Retained earnings | 33138 | 25099 |
| Accumulated other comprehensive income | 3148 | 3843 |
| **Total shareholders' equity** | **56886** | **58187** |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $**138922** | $**140351** |

---

\* The value of Class A and Class B ordinary shares are rounded, with a difference no more than $0.4 from the absolute amount.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**AND COMPREHENSIVE INCOME/(LOSS)**

**(Amount in thousands of U.S. dollars, except for share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
| Net revenues | $77264 | $74508 |
| Cost of revenues | (49044) | (50505) |
| **Gross profit** | **28220** | **24003** |
| **Operating expenses:** |  |  |
| Selling expenses | (15761) | (18909) |
| General and administrative expenses | (3671) | (8368) |
| Research and development expenses | (2966) | (7267) |
| **Total operating expenses** | **(22398)** | **(34544)** |
| **Income/(loss) from operations** | **5822** | **(10541)** |
| **Other (expenses)/income:** |  |  |
| Other non-operating income, net | 1008 | 697 |
| Government subsidy | 149 | 243 |
| Fair value loss on derivative instruments | (1156) | (14) |
| Foreign exchange (loss)/gain | (507) | 1795 |
| Interest expense, net | (217) | (12) |
| **Total other (expenses)/income, net** | **(723)** | **2709** |
| **Income/(loss) before income tax expense** | **5099** | **(7832)** |
| Income tax expense | (802) | (207) |
| **Net income/(loss)** | **4297** | **(8039)** |
| **Other comprehensive (loss)/income** |  |  |
| Foreign currency translation adjustment | (106) | 695 |
| **Total comprehensive income/(loss)** | $**4191** | **(7344)** |
| **Net income/(loss) per share** |  |  |
| Basic and diluted | 0.08 | (0.15) |
| **Weighted average shares** |  |  |
| Basic and diluted | 52263976 | 54684493 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS** 

**OF CHANGES IN SHAREHOLDERS' EQUITY (Amount in thousands of U.S. dollars, except for share and per share data)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A Ordinary<br> shares\*** | **Class A Ordinary<br> shares\*** | **Class B Ordinary<br> shares** | **Class B Ordinary<br> shares** | | | | | |
|  | **Share** | **Amount** | **Share** | **Amount** | **Additional<br> paid-in**<br>**capital** | **Statutory**<br>**reserve** | **Retained**<br>**earnings** | **Accumulated<br> other<br> comprehensive**<br>**Income** | **Total<br> shareholder's**<br>**equity** |
| **Balance as of December 31, 2023** | **15790** | $**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -** | **26316** | $**1** | $**833** | $**3193** | $**26024** | $**3060** | $**33111** |
| Net income |  |  |  |  |  |  | 4297 |  | **4297** |
| Issuance of new shares | 1250 |  |  |  | 4305 |  |  |  | **4305** |
| Foreign currency translation adjustment |  |  |  |  |  |  |  | (106) | **(106)** |
| Offering cost incurred for initial public offering |  |  |  |  | (1836) |  |  |  | **(1836)** |
| Transfer of Mezzanine equity | 10526 | 1 | - | - | 14103 | - | - | - | **14104** |
| **Balance as of June 30, 2024** | **27566** | $**1** | **26316** | $**1** | $**17405** | $**3193** | $**30321** | $**2954** | $**53875** |
| **Balance as of December 31, 2024** | **27566** | $**1** | **26316** | $**1** | $**17405** | $**3193** | $**33138** | $**3148** | $**56886** |
| Net loss |  |  |  |  |  |  | (8039) |  | **(8039)** |
| Share-based compensation | 5353 |  |  |  | 8645 |  |  |  | **8645** |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | 695 | **695** |
| **Balance as of June 30, 2025** | **32919** | $**1** | **26316** | $**1** | $**26050** | $**3193** | $**25099** | $**3843** | $**58187** |

---

\* The value of Class A and Class B ordinary shares are presented in thousand and are rounded, with a difference no more than $0.4 from the absolute amount.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amount in thousands of U.S. dollars, except for share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net income/(loss) | $4297 | $(8039) |
| Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| Change in allowance for credit losses | 3 | 169 |
| Provision for inventory reserve | 1174 | 1154 |
| Depreciation | 603 | 704 |
| Amortization of right-of-use assets | 650 | 879 |
| Share-based compensation |  | 8645 |
| Loss from the disposal of property and equipment | 77 |  |
| Unrealized exchange losses |  | 94 |
| Fair value loss on derivative instruments | (690) | (26) |
| Deferred income tax expenses/(benefits) | 707 | (5) |
| Changes in operating assets and liabilities |  |  |
| Accounts receivable | (6143) | (5524) |
| Inventories | (1082) | 5443 |
| Prepaid expenses and other current assets | (784) | 2969 |
| Other non-current assets | 60 | 46 |
| Accounts payable | 4048 | (4555) |
| Notes payable | 1000 | (2911) |
| Amount due to related parties | (53) |  |
| Accrued expenses and other current liabilities | (5339) | (3365) |
| Operating lease liabilities | (725) | (303) |
| Taxes payable | (218) | 132 |
| **Net cash used in operating activities** | **(2415)** | **(4493)** |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| Payments for acquisition of property, plant and equipment | (482) | (400) |
| Purchase of short-term investments |  | (2565) |
| Proceeds from sales of short-term investments | - | 6464 |
| **Net cash (used in)/provided by investing activities** | **(482)** | **3499** |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from bank loans | 14784 | 15323 |
| Repayments of bank loans | (10511) | (7662) |
| Contribution from controlling shareholder | 4305 |  |
| Payments of offering costs | (417) | - |
| **Net cash provided by financing activities** | **8161** | **7661** |
| Effect of exchange rate changes | (67) | 309 |
| Net increase in cash and cash equivalents and restricted cash | 5197 | 6976 |
| Cash and cash equivalents and restricted cash, at beginning of the period | 64166 | 45886 |
| Cash and cash equivalents and restricted cash, at end of the period | $**69363** | $**52862** |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:** |  |  |
| Cash paid for income tax | $318 | $71 |
| Cash paid for interest | $544 | $524 |
| **SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION:** |  |  |
| Obtaining right-of-use assets in exchange for operating lease liabilities | $34 | $3282 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES** 

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***Principal activities*** 

Planet Image International Limited ("Planet Image" or the "Company") was incorporated in the Cayman Islands on August 5, 2019 under the Cayman Islands Companies Act. The Company, through its consolidated subsidiaries (collectively, the "Group"), is principally engaged in the manufacturing and sale of compatible toner cartridges with its manufacturing facilities based in the People's Republic of China (the "PRC" or "China"). The majority of the Company's products are sold in the United States of America (the "U.S.") and Europe, including on an original design manufacturer ("ODM") basis and throughout distributors or online sales.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)***  ***Organization*** 

Planet Image was incorporated as an ultimate holding company in the Cayman Islands on August 5, 2019.

Plant Image owns 100% equity interest of Aster Graphics Company Limited ("Aster BVI"), Aster Industrial Limited ("Aster Industrial") and Lucky Knot Limited ("Lucky Knot"), all established as investment holding companies in the British Virgin Islands (the "BVI").

Aster Graphics Company Limited ("Aster HK"), a wholly-owned subsidiary of Aster Industrial, and Aster Online Company Limited ("Aster Online"), a wholly-owned subsidiary of Lucky Knot, were both incorporated under the laws of the Special Administrative Region of Hong Kong ("Hong Kong"), while Aster Graphics, Inc. ("Aster US"), a company incorporated in the State of California in March 2011 and Aster Technology Holland B.V. ("Aster NL"), a company incorporated in the Netherlands in July 2011, were both 100% owned by Aster BVI.

Jiangxi Yibo E-Tech Co., Ltd. ("Jiangxi Yibo") was established under the laws of the PRC in January 2011 and along with its subsidiaries, are the Group's main operating entities in China.

Prior to the Reorganization (as defined below) described below, Jiangxi Yibo was controlled by several individual shareholders. A reorganization of the Company's legal structure ("Reorganization") was completed in March 2020. The Reorganization involved the following major events:

● Formation of Planet Image, Aster BVI, Aster Industrial, Lucky Knot, Aster HK and Aster Online;

● Transfer of 95% equity interests of Jiangxi Yibo from several of its former shareholders to Aster HK and 5% equity interests of Jiangxi Yibo from a former shareholder to Aster Online and then to Aster HK, and as a result, Jiangxi Yibo became a wholly-owned subsidiary of Aster HK; meanwhile the total consideration of $15,083 (RMB100,000) that received by the former shareholders of Jiangxi Yibo was not injected to the Company during the Reorganization and was deemed as a return of capital that led to their dilutive proportion of shareholding in the Company;

● Transfer of 100% equity interests of Aster US and Aster NL to Aster BVI, and as a result Aster US and Aster NL became wholly-owned subsidiaries of Aster BVI; and

● Transfer of 100% equity interests of Aster Supplies GmbH ("Aster Germany"), Aster Technology Italia S.R.L. ("Aster Italy") and Aster Technology France ("Aster France") to Aster NL, and as a result Aster Germany, Aster Italy and Aster France became wholly-owned subsidiaries of Aster NL.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)***  ***Organization (cont.)*** 

Upon the completion of the above Reorganization, Plant Image became the ultimate holding company of the Group. The Company is effectively controlled by the same group of shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of these entities under common control.

The details of the Company's subsidiaries as of June 30, 2025 are as follows. All subsidiaries of the Company are all wholly-owned by the Company through equity investment.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Entity** | **Date of incorporation** | **Place of<br> incorporation** | **Percentage<br> of direct<br> ownership** | **Principal activities** |
| Aster BVI | February 25, 2011 | BVI | 100% | Investment holding |
| Lucky Knot Limited | July 18, 2019 | BVI | 100% | Investment holding |
| Aster Industrial Limited | August 8, 2019 | BVI | 100% | Investment holding |
| Aster Online | August 15, 2019 | Hong Kong | 100% | Investment holding |
| Aster HK | August 16, 2019 | Hong Kong | 100% | Sales of compatible <br> toner cartridges |
| Aster Graphics, Inc. ("Aster U.S.") | March 1, 2011 | U.S. | 100% | Sales of compatible toner cartridges in the U.S. |
| Aster NL | July 8, 2011 | Netherlands | 100% | Sales of compatible toner cartridges in Europe |
| Jiangxi Yibo | January 12, 2011 | PRC | 100% | Manufacture of compatible toner cartridges in the PRC |
| Aster Germany | September 25, 2018 | Germany | 100% | Sales of compatible toner cartridges in Europe |
| Aster Italy | May 7, 2018 | Italy | 100% | Sales of compatible toner <br> cartridges in Europe |
| Aster France | April 3, 2019 | France | 100% | Sales of compatible toner <br> cartridges in Europe |
| Jiangxi Leibotai Electronic Technology Co., Ltd. ("Jiangxi Leibotai") | June 26, 2012 | PRC | 100% | Provision of procurement <br> services in the PRC |
| Yantuo (Guangdong) Technology Co., Ltd. ("Yantuo")<sup>(1)</sup> | April 8, 2013 | PRC | 100% | Provision of sales management services in the PRC |
| Planet Image International Electronic Technology Shenzhen Co., Ltd. (formerly known as Shenzhen Dinghong Shengda E-commerce Co., Ltd.) | February 28, 2020 | PRC | 100% | Provision of sales management services in the PRC |
| Aster Technology UK Ltd. ("Aster UK") | January 21, 2019 | United Kingdom | 100% | Sales of compatible toner <br> cartridges in Europe |
| Peony Trade Co., Limited | March 9, 2020 | Hong Kong | 100% | Investment holding |
| White Poplar Co., Limited | March 9, 2020 | Hong Kong | 100% | Investment holding |
| Joyful Product Trade Co., Limited | March 9, 2020 | Hong Kong | 100% | Investment holding |
| Grand Future Trade Co., Limited | March 9, 2020 | Hong Kong | 100% | Investment holding |
| Oriental Poetry Co., Limited | March 5, 2020 | Hong Kong | 100% | Investment holding |
| Prosperity Product Trade Co., Limited | March 9, 2020 | Hong Kong | 100% | Investment holding |
| Atlantic Marketing Co., Limited | March 5, 2020 | Hong Kong | 100% | Investment holding |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Aster UK is a directly wholly-owned subsidiary of Yantuo through equity investment.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***Basis of presentation*** 

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. The accompanying unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the years ended December 31, 2023 and 2024.

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. For consolidated subsidiaries where the Company's ownership in the subsidiary is less than 100%, the equity interest not held by the Company is shown as non-controlling interests.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)***  ***Use of estimates*** 

The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported periods in the unaudited condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, allowance for credit loss, impairment provision for inventories, useful lives and impairment of long-lived assets, determination of the fair value of derivative instruments and derivative liability arising from foreign exchange forward contracts, accounting for deferred income taxes and valuation allowance for deferred tax assets. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)***  ***Foreign currencies and foreign currency translation*** 

The functional and reporting currency of the Company is the United States Dollar ("US$"). The Company's operating subsidiaries in China, Europe and the United States use their respective currencies, Renminbi ("RMB"), Pound ("GBP"), Euro ("EUR") and US$, as their functional currencies.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)***  ***Foreign currencies and foreign currency translation (cont.)*** 

The financial statements of Planet Image and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution.

Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated statements of changes in shareholders' equity. Gains and losses from foreign currency transactions are included in the Company's consolidated statements of income and comprehensive income.

The following table outlines the currency exchange rates that were used in preparing the unaudited condensed consolidated financial statements:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30**<br>**2025** |
| Period end RMB: USD exchange rate | US$1=RMB7.1891 | US$1=RMB7.1480 |
| Period end EUR: USD exchange rate | US$1=EUR0.9615 | US$1=EUR0.8475 |
| Period end GBP: USD exchange rate | US$1=GBP0.7937 | US$1=GBP0.7299 |

---

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
| Average RMB: USD exchange rate | US$1=7.1023 | US$1=7.1788 |
| Average EUR: USD exchange rate | US$1=0.9223 | US$1=0.9147 |
| Average GBP: USD exchange rate | US$1=0.7874 | US$1=0.7668 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)***  ***Accounts Receivable, net*** 

Accounts receivables are recognized in the period when the Group has sold products to its customers and when its right to consideration is unconditional. The Group adopted Accounting Standards Update ("ASU") 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments", including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, "ASC 326") on January 1, 2023 using the modified retrospective transition approach. ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of the new standard did not have a material effect on the Group's unaudited condensed consolidated financial statements.

Account receivables are stated net of provision of credit losses. The Group has developed a current expected credit loss ("CECL") model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The Group considers historical collection rates, current financial status, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)** 

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)***  ***Inventories, net*** 

Inventories, primarily consisting of raw materials, goods in transit, worked in progress and finished goods, are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined using the weighted average cost method. The Group writes down the cost of obsolete and slow-moving inventories to the estimated net realizable value, based on inventory obsolescence trends, historical experience, forecasted consumer demand and application of the specific identification method. As of December 31, 2024 and June 30, 2025, $1,165 and $1,313 was written down from the cost of inventories to their net realizable values, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(f)***  ***Revenue recognition*** 

The Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") on January 1, 2019 and the Company's revenue recognition policies are presented as below.

The Group's revenues are mainly generated from the sales of compatible toner cartridges through offline and online channels. The Group provides products: (i) to offline overseas customers who own their brands on an ODM basis; (ii) to offline overseas dealers who primarily sell its self-branded products and white-label products to end consumers; and (iii) directly to customers on a retail basis under its self-owned brands through online retail platforms. There is no major difference in terms of product capability between the Company's ODM products, white-label products, and self-own brand products, and the main difference lies in product packaging and pricing.

The Group usually enters into sales orders with customers or receives online sales orders, in which the Group identifies the only performance obligation is to transfer the promised products stated in the sales order. The Group performs shipping services before the products are delivered at the place designated by customers. Shipping service is determined as an activity to fulfill the Group's promise to transfer the products, rather than another distinct performance obligation as it is performed before the customers obtain control of the products. In the normal course of business, the Group's warranties are limited to product specifications, and the Company does not accept product returns unless the item is defective as manufactured. Accordingly, warranty costs are treated as a cost of fulfillment subject to accrual, rather than a performance obligation. The Company establishes provisions for both estimated returns and warranties when revenues are recognized.

Revenues represent the amount of consideration that the Group is entitled to, including products settlement price, net of value-added tax ("VAT"), surcharges, discounts and returns, if any. The transaction price is variable as adjusted by return allowances, rebates, which the Group estimates by using the expected value method and updates to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. The Group considers itself a principal as it self-produces all the products. The Group recognizes revenue from the sales of compatible toner cartridges at a point in time when the control of products is transferred to the customers upon customers' acceptance on a gross basis. Payment is usually required within four months after the issuance of invoice for offline customers and the consideration of online orders is collected in advance of shipment by online platform. Therefore, it is probable that the Group will collect substantially all of the consideration without existence of any significant financing component.

Disaggregation of Revenues

The Group disaggregates its revenues from contracts by sales channel and region, as the Group believes it best depicts how the nature, amount, timing and uncertainty of the revenues and cash flows are affected by economic factors. The Group's disaggregation of revenues for the six months ended June 30, 2024 and 2025 are disclosed in Note 17 of these unaudited condensed consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(f)***  ***Revenue recognition (cont.)*** 

Contract Balances

When either party to a revenue contract has performed, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the Group's performance and the customer's payment. The Group merely incurs cost to obtain a contract with a customer. The Group presents any unconditional rights to consideration separately as a receivable. The Group does not have any contract asset. The balance of accounts receivable, net of allowance for credit loss were $31,640 and $36,995 as of December 31, 2024 and June 30, 2025, respectively.

The Group presents the consideration that a customer pays before the Group transfers products to the customer as a contract liability (advance from customers) when the payment is made. Advance from customers is the Group's obligation to transfer products to a customer for which the Group has received consideration from the customer. As of December 31, 2024 and June 30, 2025, the balance of advance from customers amounted to $486 and $455, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)***  ***Share-based Compensation*** 

The Group applies ASC 718, Compensation—Stock Compensation ("ASC 718"), to account for all of its share-based payments. In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or equity award. All the Group's grants of share-based awards without vesting conditions were classified as equity awards and are recognized in the financial statements based on their grant date fair value.

 ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(h)***  ***Concentration of risk*** 

Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalent, restricted cash and accounts receivable. As of December 31, 2024 and June 30, 2025, the aggregate amounts of cash and cash equivalent and restricted cash of $17,983 and $22,202, respectively, were held at major financial institutions located in the mainland China, and each bank account is insured by the government authority with the maximum limit of RMB500 (equivalent to $70). The aggregate amounts of cash and cash equivalent and restricted cash of $27,903 and $30,660 were deposited with major financial institutions located outside the mainland China, and each bank account is insured with the minimum amount of $150. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions.

The Company's exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by group of counterparties that share similar attributes. Substantially all of the Company's sales are made to customers located primarily in the USA and Europe. The Company's operating results could be adversely affected by the government policy in the PRC on exporting business, foreign exchange rate fluctuation, and changes in local market conditions. No customer individually represented greater than 10% of the Company's total revenues for the six months ended June 30, 2024 and 2025.

The Company's inventory purchases were approximately 25.0% and 15.9% from the supplier A, and 10.1% and 8.7% from the supplier B for the six months ended June 30, 2024 and 2025, respectively.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)***  ***Recent accounting pronouncements*** 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items, require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Group early adopted ASU 2023-07 from the annual period ended December 31, 2024. The adoption of this standard did not have a material impact to the Group's results of operations, cash flows or financial condition.

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company does not expect that the adoption of this standard will have a material impact on its future consolidated financial statements.

In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements ("ASU 2024-02"). The amendments in this Update affect a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. This update contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. ASU 2024-02 is effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Group does not expect to early adopt this guidance and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03") which requires detailed disclosures in the notes to financial statements disaggregating specific expense categories and certain other disclosures to provide enhanced transparency into the nature and function of expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. The Group does not expect to early adopt this guidance and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)***  ***Recent accounting pronouncements (cont.)*** 

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). The amendments in ASU 2025-05 provide entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers ("ASC 606") by allowing the assumption that current conditions as of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for the Company for its annual reporting periods beginning July 1, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact ASU 2025-05 will have on its future consolidated financial statements.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption.

The Group does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **ACCOUNTS RECEIVABLE, NET** 

Accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Accounts receivable | $31744 | $37274 |
| Allowance for credit losses | (104) | (279) |
| **Accounts receivable, net** | $**31640** | $**36995** |

---

The movement of allowance of credit losses was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| Balance at beginning of the periods presented | $121 | $104 |
| Addition in credit losses | 3 | 169 |
| Write off | (3) |  |
| Foreign currency translation adjustment | (1) | 6 |
| **Balance at end of the periods presented** | $**120** | $**279** |

---

The Group recorded a credit loss of $3 and $169, and wrote off accounts receivable of $3 and nil for the six months ended June 30, 2024 and 2025, respectively. As of August 15, 2025, approximately 46.2% of the Group's net accounts receivable balance at June 30, 2025 have been subsequently collected and the remaining balance is expected to be collectible and covered by the commercial insurance that the Group purchased for the accounts receivable of offline sales with a coverage rate varying from 80% to 90% for credit losses under a maximum credit period of 180 days.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **INVENTORIES, NET** 

Inventories consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30，**<br>**2025** |
|  | | **(Unaudited)** |
| Raw materials | $4246 | $3413 |
| Goods in transit | 4715 | 3059 |
| Work in progress | 2649 | 2166 |
| Finished goods | 10171 | 6673 |
| **Inventories, gross** | **21781** | **15311** |
| Impairment provision | (1165) | (1313) |
| **Inventories, net** | $**20616** | $**13998** |

---

As of December 31, 2024 and June 30, 2025, $1,165 and $1,313 was written down from the cost of inventories to their net realizable values, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **PREPAID EXPENSES AND OTHER CURRENT ASSETS** 

Prepaid expenses and other current assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Export input VAT receivables <sup>(a)</sup> | $3384 | $3303 |
| Advance to suppliers | 4221 | 2315 |
| Receivable from third parties <sup>(b)</sup> | 708 | 1114 |
| Employee receivables and business advances | 1788 | 468 |
| Security deposits | 205 | 282 |
| Interest receivable | 181 | 223 |
| Insurance receivables on written-off accounts receivables <sup>(c)</sup> | 282 | 201 |
| Others <sup>(d)</sup> | 147 | 26 |
| **Total** | $**10916** | $**7932** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Export input VAT receivables mainly represent the refundable input VAT the Group has paid for the production of the products in the PRC when declaring goods for export.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Receivable from third parties represent the funds held on third-party settlement platforms.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Insurance receivables on written-off accounts receivables mainly represent insurance claim receivables due from insurance companies.

&nbsp;&nbsp;&nbsp;&nbsp;(d) Others mainly include prepaid miscellaneous service fee and prepaid rental fee.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **PROPERTY, PLANT AND EQUIPMENT, NET** 

Property, plant and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Building improvement | $6457 | $6455 |
| Machinery and equipment | 6163 | 6561 |
| Land use rights | 3437 | 3457 |
| Office equipment, furniture and fixtures | 1764 | 1833 |
| Automobiles | 417 | 411 |
| **Total** | **18238** | **18717** |
| Less: accumulated depreciation | (10038) | (10692) |
| **Property, plant and equipment, net** | $**8200** | $**8025** |

---

Depreciation expense was $603 and $704 for the six months ended June 30, 2024 and 2025, respectively.

As of December 31, 2024 and June 30, 2025, land use rights owned by Jiangxi Yibo, a subsidiary of the Company, for which the carrying value were $2,385 and $2,358, respectively, were pledged to secure short-term loans and bank acceptance notes payable from Bank of China Xinyu branch and Agricultural Bank of China Xinyu Branch.

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **INVESTMENTS** 

Investments consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Fixed deposit receipt, current | $6464 | $2565 |
| **Total short-term investments** | **6464** | **2565** |
| Fixed deposit receipt, non-current | 10293 | 10353 |
| **Total long-term investments** | **10293** | **10353** |
| **Total investments** | $**16757** | $**12918** |

---

As of June 30, 2025, $2,565 of short-term investments and $10,353 of long-term investments in bank fixed deposits were pledged for Jiangxi Yibo's issuance of commercial bank acceptance bills. Long-term fixed deposits will expire in 2027 with a deposit term of three years. All the fixed deposits were deposited in local banks in the PRC.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES** 

Accrued expenses and other current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Accrued payroll and employee benefits | $8339 | $5737 |
| Accrued expenses<sup>(a)</sup> | 4124 | 3128 |
| Advance from customers<sup>(b)</sup> | 486 | 455 |
| Others | 290 | 628 |
| **Total** | $**13239** | $**9948** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Accrued expenses mainly represent accrued freight charges and other accrued expenses related to the business operation.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Advance from customers mainly represent the advance received from customers for the finished goods purchases. The change in contract liabilities primarily represents the cash received, less amounts recognized as revenues during the period.

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **SHORT-TERM BORROWINGS** 

Short-term borrowings represent amounts due to various banks normally maturing within one year. The principal of the borrowings is due at maturity. Accrued interest is due either monthly or quarterly. The bank borrowings were for working capital and capital expenditure purposes. The balance of short-term borrowings consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Bank of China Xinyu Branch <sup>(a)</sup> | $9737 | $11192 |
| Export-Import Bank of China Jiangxi Branch <sup>(b)</sup> | 6051 | 6086 |
| Agricultural Bank of China Xinyu Branch <sup>(c)</sup> | 3477 | 5596 |
| Xinyu Rural Commercial Bank Gaoxin Branch <sup>(d)</sup> | 4173 | 4197 |
| Industrial and Commercial Bank of China Limited Xinyu High Tech Branch <sup>(e)</sup> | - | 4197 |
| **Total** | $**23438** | $**31268** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) As of December 31, 2024, the Jiangxi Yibo had two outstanding bank loans, totaling $9,737 (RMB70,000), from Bank of China Xinyu Branch with an annual interest rate of 3.10%, which matured on July 8, 2025 and July 19, 2025, respectively. These two loans were fully repaid in July 2025. The bank loans were guaranteed by related parties. (See Note 16). For the six months ended June 30, 2025, the Jiangxi Leibotai entered into another bank loan agreement of $1,399 (RMB10,000) with Bank of China Xinyu Branch with an annual interest rate of 2.90% and a maturity date of March 18, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(b) On September 14, 2024, the Jiangxi Yibo entered into a bank loan agreement with Export-Import Bank of China Jiangxi Branch in a total amount of $6,051 (RMB43,500) with an annual interest rate of 3.10%, which will mature on September 13, 2025. The loan was guaranteed by Xinyu High-Tech Investment Co., Ltd., a related party of the Group. (See Note 16). The loan was fully repaid in September 2025.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **SHORT-TERM BORROWINGS (cont.)** 

&nbsp;&nbsp;&nbsp;&nbsp;(c) As of December 31, 2024, the Jiangxi Yibo had an outstanding balance of $3,477 (RMB 25,000) with a maturity date of April 24, 2025 and an annual interest rate of 3.00%. The loan was guaranteed by a related party of the Group and was secured by mortgaging the properties of Jiangxi Yibo. (See Note 16). As of June 30, 2025, the loan was fully repaid upon maturity. For the six months ended June 30, 2025, the Jiangxi Yibo entered into two additional bank loan agreements with Agricultural Bank of China Xinyu Branch, totaling $5,596 (RMB40,000). The loans, with principal amounts of $2,099 (RMB15,000) and $3,498 (RMB25,000) respectively, carry annual interest rates of 3.10% and 3.10% and will mature on December 30, 2025 and April 29, 2026, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;(d) As of December 31, 2024, the Jiangxi Yibo had an outstanding bank loan of $4,173 (RMB30,000) from Xingyu Rural Commercial Bank Gaoxin Branch, with a maturity date of January 8, 2025 and an annual interest rate of 3.80%. The loan was guaranteed by a related party of the Group. (See Note 16). As of June 30, 2025, the loan was fully repaid upon maturity. On January 14, 2025, the Jiangxi Yibo entered into a bank loan with an amount of $4,197 (RMB30,000) with a maturity date of January 13, 2026. The bank loans were guaranteed by the legal entity.

&nbsp;&nbsp;&nbsp;&nbsp;(e) On March 13, 2025, the Jiangxi Yibo entered into a bank loan with an amount of $4,197 (RMB30,000) with a maturity date of February 24, 2026 and an annual interest rate of 2.80%. The loan was fully repaid in August 2025.

Interest expenses were $583 and $512 for the six months ended June 30, 2024 and 2025, respectively. The weighted average interest rates of short-term loans outstanding were 3.72% and 3.08% per annum for the six months ended June 30, 2024 and 2025, respectively.

As of June 30, 2025, the Group had unutilized lines of credit aggregating $654 for short-term financing. To utilize these unused lines of credit, the Group is required to obtain consent of the lenders and be in compliance with financial covenants, such as requirement for certain financial ratios and use the funds according to the agreed purpose, etc. The Group has been in compliance with these financial covenants up to the date of these unaudited consolidated financial statements.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**10.** **LEASES** 

The leases of the Company were classified as operating leases mainly for offices and staff dormitories. Rent expense is recognized on a straight-line basis over the lease term. The discount rate was set with reference to the loan prime rate published by the Bank of China.

Supplemental balance sheet information related to operating lease was as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| Right-of-use assets | $3228 | $5983 |
| Operating lease liabilities – current | $1027 | $1392 |
| Operating lease liabilities – non-current | 2172 | 4786 |
| **Total operating lease liabilities** | $**3199** | $**6178** |

---

The weighted average remaining lease terms and discount rates for the operating lease as of June 30, 2025 were as follows:

---

| | |
|:---|:---|
| Remaining lease term and discount rate: |  |
| Weighted average remaining lease term (years) | 5.76 |
| Weighted average discount rate | 3.75% |

---

During the six months ended June 30, 2024 and 2025, the Group incurred total operating lease expenses of $680 and $771, respectively.

The following is a schedule of future minimum payments under the Company's operating leases as of June 30, 2025:

---

| | |
|:---|:---|
|  | **Amounts** |
| 2026 | $1599 |
| 2027 | 1485 |
| 2028 | 1411 |
| 2029 | 1349 |
| 2030 | 876 |
| **Total lease payments** | **6720** |
| Less: imputed interest | (542) |
| **Total operating lease liabilities, net of interest** | $**6178** |

---

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**11.** **SHARE BASED COMPENSATION** 

**2025 Equity Incentive Plan**

Effective on May 9, 2025, the board of directors of the Company approved the 2025 Equity Incentive Plan (the "Plan"), to attract and retain the best available personnel for positions of responsibility with the Group, to provide additional incentives to them and align their interests with those of the Company's shareholders, and to thereby promote the Group's long-term business success. On May 28, 2025, 5,352,621 Class A ordinary shares, par value HK$0.0001 per share, with no vesting conditions were granted to the best available personnel. The estimated fair value of Class A ordinary shares granted under 2025 Equity Incentive Plan were the closing prices prevailing on the grant date. On June 3, 2025, the Group issued 5,352,621 Class A ordinary shares to these personnel.

A summary of activities of the restricted shares for the six months ended June 30, 2025 is as follow:

---

| | |
|:---|:---|
|  | **Number of nonvested<br> restricted shares** |
| Unvested on December 31, 2024 |  |
| Granted | 5353 |
| Vested | (5353) |
| **Unvested on June 30, 2025** | - |

---

Share-based compensation expenses of $8,645 were recognized for the Plan during the six months ended June 30, 2025. As of June 30, 2025, there was no unrecognized share-based compensation expenses in relation to the Plan.

The allocation of total share-based compensation expenses is set forth as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| General and administrative expenses | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $4123 |
| Research and development expenses | - | 4522 |
| **Total** | $**-** | $**8645** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**12.** **TAX** 

 ****

***Cayman Islands and BVI***

The Company was incorporated in the Cayman Islands and several of its wholly-own subsidiaries were incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands and the BVI.

 ****

***Hong Kong***

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, effective April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance ("IRO")) for corporations. The Group was not subject to Hong Kong profit tax for any period presented as it did not have assessable profit during the periods presented.

 ****

 **

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

 **

&nbsp;&nbsp;&nbsp;&nbsp;**12.** **TAX (cont.)** 

***United States***

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Tax Act") which significantly changed previous U.S. tax laws, including a reduction of corporate income tax rate from 35% to 21% and a one-time transition tax on deemed repatriation of undistributed foreign earnings.

 ****

***Europe***

The Company's subsidiaries, which were mainly incorporated in European Union ("EU") countries, such as Netherland, Italy, and France, are subjected to enterprise income tax on the respective country's taxable income as determined under the tax laws and accounting standards at rates ranging from 16.5% to 28%.

***The PRC***

Generally, the Company's subsidiaries that are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%.

In accordance with the implementation rules of Enterprise Income Tax Laws of the PRC (the "EIT Laws"), a qualified "High and New Technology Enterprise" ("HNTE") is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. The Company's subsidiary, Jiangxi Yibo, is qualified as HNTE and has renewed its HNTE certificate in 2022, which will expire on December 14, 2025. Therefore, Jiangxi Yibo is eligible to enjoy a preferential tax rate of 15% from 2019 to 2025 to the extent it has taxable income under the EIT Law.

For the six months ended June 30, 2024 and 2025, Jiangxi Leibotai, a wholly owned subsidiary of Jiangxi Yibo, was recognized as a small low-profit enterprise. For the six months ended June 30, 2024, Yantuo, a wholly owned subsidiary of Jiangxi Yibo, was recognized as a small low-profit enterprise.

According to the Announcement on Preferential Income Tax policies for Small and micro enterprises and Individual industrial and commercial households (Caishui[2023] No.6) issued by the Ministry of Finance and the State Taxation Administration on March 26, 2023, for small and low-profit enterprises with an annual taxable income not exceeding RMB1 million (equivalent to $0.1 million), a reduction of 25% will be included in the taxable income and the enterprise income tax will be paid at a 20% tax rate. The execution period of this announcement was from January 1, 2023 to December 31, 2024. According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Further Supporting the Development of Small and Micro Enterprises and Individual Businesses in Relevant Tax Policies (Caishui[2023] No.12) issued by the Ministry of Finance and the State Taxation Administration on August 2, 2023, The execution period is extended to December 31, 2027.

With the above preferential income tax rate, the tax holiday resulted in a cost of $520 and savings of $846 for the six months ended June 30, 2024 and 2025, respectively.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**12.** **TAX (cont.)** 

The income tax provision consisted of the following components:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| Current income tax expense | $(95) | $(212) |
| Deferred income tax (expense)/benefit | (707) | 5 |
| **Total income tax expense** | $**(802)** | $**(207)** |

---

***The PRC* (cont.)**

A reconciliation of the Group's PRC statutory tax rate to the effective income tax rate during the periods is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| Computed income tax expense with PRC statutory tax rate | 25.00% | 25.00% |
| Non-deductible items | 0.11% | (0.05)% |
| Additional deduction of qualified R&D expenditures | (8.73)% | 5.25% |
| Effect of tax holiday and preferential tax rate | (10.19)% | (10.80)% |
| Changes in valuation allowance | 9.64% | (22.12)% |
| Effect of income tax rate differences in jurisdictions other than the PRC | 0.17% | 0.08% |
| **Effective income tax rate** | **16.00%** | **(2.64)%** |

---

The per share effect of the tax holiday were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| Tax holiday effect | $(520) | $846 |
| Effect of tax holiday on basic net income per share | (0.01) | 0.02 |
| Effect of tax holiday on diluted net income per share | (0.01) | 0.02 |

---

As of December 31, 2024 and June 30, 2025, the significant components of the deferred tax assets and deferred tax liability were summarized below:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| **Deferred tax assets:** |  |  |
| Allowance for inventories and others | $253 | $283 |
| Net operating loss carried forward | 2671 | 4374 |
| **Total deferred tax assets** | **2924** | **4657** |
| Valuation allowance | (946) | (2679) |
| **Deferred tax assets, net of valuation allowance** | $**1978** | $**1978** |
| **Deferred tax liability:** |  |  |
| Accelerated tax depreciation and others | $(450) | $(445) |
| **Total deferred tax liability** | $**(450)** | $**(445)** |

---

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**13.** **MEZZANINE EQUITY** 

On September 30, 2019, the Company issued 105,263 ordinary shares to Xinyu High-Tech Investment Co., Ltd. ("Gaoxin" or the "Holder") which were then split and re-designated to 10,526,300 Class A ordinary shares, in exchange for RMB100,000 (approximately $14,104) investment in the Company. The ordinary shares issued to Gaoxin was subject to redemption upon the occurrence of any of the following events (referred to as a "Redemption Event"): (1) the Company fails to successfully complete its initial public offering on either Hong Kong Stock Exchange or Nasdaq Capital Market and New York Stock Exchange before March 31, 2023; (2) its initial public offering price per share were to be lower than or equal to 1.15 times of the share price paid by Gaoxin; or (3) the shares held by Gaoxin could not trade immediately after completion of the Group's initial public offering or Gaoxin did not receive the shortest applicable lock-up period for its shares. Upon the occurrence of any of these Redemption Events, Gaoxin would have the option to request the Company to repurchase all of these ordinary shares with the original investment price plus a 7.5% annualized return. The interest shall have been accrued from the date when Gaoxin made the payment of the investment to the date when the Company completed the repurchase of all equity interests held by Gaoxin. The ordinary shares issued to Gaoxin featured certain redemption rights that were considered by the Company to be outside of the Company's control and subject to the occurrence of uncertain future events.

The Company accounted for these redeemable ordinary shares in accordance with ASC 480 "Distinguishing Liabilities from Equity." Ordinary shares subject to conditional redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control is classified as mezzanine equity.

The Company evaluated the likelihood of these redeemable ordinary shares becoming redeemable at each reporting date. If the contingencies of the redemption event outside the Company's control are resolved, the ordinary shares will become non-redeemable and the Company will reclassify the mezzanine equity as permanent equity. If it is probable that redeemable ordinary shares will be redeemed, the Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of the instrument to equal the redemption value at the end of each reporting period. Accordingly, if the ordinary shares are not currently redeemable and it is not probable that the ordinary shares will become redeemable, subsequent adjustment of the amount presented in mezzanine equity is unnecessary.

The date specified in the first Redemption Event was extended for eighteen months to September 30, 2024 upon the supplementary agreement entered into with Gaoxin, without any other modification on the remaining terms, upon the supplementary agreement entered into with Gaoxin on February 18, 2023. Therefore, the Company assessed that it is not probable that these redeemable ordinary shares will become redeemable as the Redemption Events are not estimated to occur as of the issuance of this financial statement, accordingly, no adjustment was made to the carrying amount of the mezzanine equity.

On January 29, 2024, the Company closed its initial public offering on the Nasdaq Capital Market where 1,250,000 Class A ordinary shares were newly issued at a price of $4.0 per share with the total net proceeds of $4,305. With the success of the IPO, the Redemption Event was resolved and as a result, all of the redeemable ordinary shares, the mezzanine equity, was reclassified as permanent equity of Class A ordinary shares in accordance with ASC 480-10-S99-3A18. The mezzanine equity in the total amount of $14,104,236 was converted into 10,526,300 Class A ordinary shares, and the Company recognized an additional paid-in capital of $14,103, which represented the amount by which the carrying value of the mezzanine equity exceeded the par value of 10,526,300 Class A ordinary shares.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**14.** **EQUITY** 

 ****

***Ordinary shares***

After a share split and a re-designation effective on October 20, 2021, the Company's authorized share capital became 2,000,000,000 Class A ordinary shares, 1,000,000,000 Class B ordinary shares, and 800,000,000 Preferred shares of par value HK$0.0001 each.

Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting, transfer and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to ten votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

On January 29, 2024, the Company closed its initial public offering on the Nasdaq Capital Market where 1,250,000 Class A ordinary shares were newly issued at a price of $4.0 per share with the total net proceeds of $4,305. With the success of the IPO, the mezzanine equity in the total amount of $14,104 was converted into 10,526,300 Class A ordinary shares as permanent equity.

As of December 31, 2024 and June 30, 2025, the number of the Company's authorized Class A ordinary shares was 2,000,000,000, and the number of the Company's issued Class A ordinary shares was 27,565,800 and 32,918,421, respectively. As of December 31, 2024 and June 30, 2025, the number of the Company's authorized and issued Class B ordinary shares was 26,315,800.

 ****

***Preferred shares***

As of December 31, 2024 and June 30, 2025, the number of the Company's authorized preferred shares was 800,000,000 and no preferred share was issued. The classes or series of preferred shares including designations, powers, preferences and relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption privileges, voting powers, full or limited or no voting powers, and liquidation will be fixed upon each issuance.

&nbsp;&nbsp;&nbsp;&nbsp;**15.** **RESTRICTED NET ASSETS** 

A significant portion of the Group's operations are conducted through its PRC (excluding Hong Kong) subsidiaries, and the Company's ability to pay dividends is primarily dependent on receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company's subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations, and after it has met the PRC requirements for appropriation to statutory reserves. The Group is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC ("PRC GAAP"). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. Appropriations to the surplus reserve are made at the discretion of the Board of Directors of the Company. Paid-in capital of the Company's subsidiaries included in the Company's consolidated net assets are also non-distributable for dividend purposes.

As a result of these PRC laws and regulations, the Company's PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2024 and June 30, 2025, net assets restricted in the aggregate, which include paid-in capital and statutory reserve funds of the Company's subsidiaries, that are included in the Company's consolidated net assets were approximately $18,803 and $19,605, respectively.

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**16.** **RELATED PARTY TRANSACTIONS** 

 ****

***Related parties***

The Company's related parties with which the Group had transactions include its affiliates, any director or executive officers of the Company and their immediate family members, as well as any shareholders owning more than 5% of the Company's ordinary shares.

The table below sets forth the related parties and their relationships with the Group who had transaction with the Group for the six months ended June 30, 2024 and 2025:

---

| | |
|:---|:---|
| **Name** | **Relationship** |
| Mr. Weidong Gu | Founder and chairman of the board of directors of the Company |
| Mr. Zhisheng Cheng | Vice president of the Company |
| Mr. Xingzhi Huang | Shareholder of the Company |
| Xinyu High-Tech Investment Co., Ltd. | Shareholder of the Company |

---

***Amounts due to Related parties***

 ****

The amounts due to a related party are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**<br>**2024** | **As of June 30,**<br>**2025** |
|  | | **(Unaudited)** |
| **Rental income received in advance:** |  |  |
| Xinyu High-Tech Investment Co., Ltd. | $155 | $105 |

---

***Related party transactions***

The transactions of related parties are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Guarantee provided for bank short-term borrowings** |  |  |
| Mr. Weidong Gu – Bank of China | $9737 | $9793 |
| Mr. Weidong Gu – Export-Import Bank of China Jiangxi Branch |  | 6086 |
| Mr. Weidong Gu – Xinyu Rural Commercial Bank | 4173 | 4197 |
| Mr. Weidong Gu – Agricultural Bank of China | 3478 |  |
| Mr. Zhisheng Cheng – Bank of China | 9737 | 9793 |
| Mr. Zhisheng Cheng – Export-Import Bank of China Jiangxi Branch |  | 6086 |
| Mr. Xingzhi Huang – Bank of China | 9737 | 9793 |
| Mr. Xingzhi Huang – Export-Import Bank of China Jiangxi Branch |  | 6086 |
| Mr. Xingzhi Huang – Agricultural Bank of China | 3478 |  |
| Xinyu High-Tech Investment Co., Ltd. – Export-Import Bank of China Jiangxi Branch | 6051 | 6086 |
| **Rental income:** |  |  |
| Xinyu High-Tech Investment Co., Ltd. | $102 | $50 |

---

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

&nbsp;&nbsp;&nbsp;&nbsp;**16.** **RELATED PARTY TRANSACTIONS (cont.)** 

Mr. Weidong Gu, Mr. Zhisheng Cheng and Mr. Xingzhi Huang also provided guarantees with their personal property for the Group's notes payable credited by Xinyu Rural Commercial Bank Gaoxin Branch, Agricultural Bank of China Xinyu Branch and Bank of China Xinyu Branch.

&nbsp;&nbsp;&nbsp;&nbsp;**17.** **SEGMENT INFORMATION** 

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Group's chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision-making group, in deciding how to allocate resources and in assessing performance. The Group uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group's reportable segments. The Group's CODM has been identified as the chief executive officer (the "CEO"), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group has determined that there is only one reportable operating segment since the manufacturing and sales of products are viewed as an integrated business process and allocation of the resources and assessment of the performance are not separately evaluated by the Group's CODM.

**<u>Revenues by sales channel</u>**

The Group's revenues derived from different channels for the years ended December 31, 2024 and June 30, 2025, are as below:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| Offline sales to dealers | $45668 | $39384 |
| Offline sales to ODM customers | 25711 | 27735 |
| Online sales to retail customers | 5885 | 7389 |
| **Total** | $**77264** | $**74508** |

---

**<u>Geographic information</u>**

The majority of the Group's revenues for the six months ended June 30, 2024 and June 30, 2025 was generated from North America, Europe and others. The following table sets forth the disaggregation of revenues by geographic area:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2024** | **2025** |
|  | **(Unaudited)** | **(Unaudited)** |
| North America | $47503 | $45255 |
| Europe | 25918 | 22273 |
| Others | 3843 | 6980 |
| **Total** | $**77264** | $**74508** |

---

**PLANET IMAGE INTERNATIONAL LIMITED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Amount in thousands of U.S. dollars, except share and per share data)**

**17.** **SEGMENT INFORMATION (cont.)** 

As of December 31, 2024 and June 30, 2025, the Group's 99.25% and 95.77% of long-lived assets, except for several right-of-use assets of overseas leasing, are located in the PRC.

&nbsp;&nbsp;&nbsp;&nbsp;**18.** **SUBSEQUENT EVENTS** 

**<u>Borrowings</u>**

On July 9, 2025, Jiangxi Yibo entered into a bank loan in the amount of $5,596 (RMB40,000), from Bank of China Xinyu Branch with an annual interest rate of 3.00%, which will mature on July 9, 2026. The loan was guaranteed by Mr. Weidong Gu, Mr. Zhisheng Cheng, Mr. Xingzhi Huang and Jiangxi Leibotai, and was secured by the mortgage of Jiangxi Yibo's properties.

On July 22, 2025, Jiangxi Yibo entered into a bank loan in the amount of $4,197 (RMB30,000), from Bank of China Xinyu Branch with one year maturity and an annual interest rate of 3.00%. The loan was guaranteed by Mr. Weidong Gu, Mr. Zhisheng Cheng, Mr. Xingzhi Huang and Jiangxi Leibotai, and was secured by the mortgage of Jiangxi Yibo's properties.

On August 29, 2025, Jiangxi Yibo entered into a bank loan in the amount of $8,394 (RMB60,000), from Industrial and Commercial Bank of China Limited Xinyu High Tech Branch with an annual interest rate of 3.00%, which will mature on August 29, 2028. The loan was guaranteed by Planet Image International Limited.

On September 9, 2025, Jiangxi Yibo entered into a bank loan in the amount of $6,086 (RMB43,500), from Export Import Bank of China Jiangxi Branch with an annual interest rate 3.00%, which will mature on September 8, 2026. The loan was guaranteed by Xinyu High-Tech Investment Co., Ltd.

The Group has evaluated subsequent events from June 30, 2025 through September 16, 2025, the date the unaudited condensed consolidated financial statements were issued, and did not identify any subsequent events with material financial impact on the unaudited condensed consolidated financial statements.

## Exhibit 99.2

**Exhibit 99.2**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in the Form 6-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in the Company's Form 20-F for the year ended December 31, 2024.*

**Overview**

Through its operating subsidiaries, Planet Image International Limited (the "Company," "we," "our," and "us") is an export-oriented manufacturer and seller of compatible toner cartridges based in People's Republic of China ("China" or the "PRC"), the United States of America (the "U.S.") and Europe, with the mission to deliver high-quality and cost-effective printing solutions to consumers around the world with our proprietary technology, research and development capabilities and our integrated and localized sales, logistics and service platform.

Through the operating subsidiaries, we primarily develop and manufacture compatible toner cartridges that can be used for a wide range of commonly available models of laser printers from different manufacturers, on a white-label or third-party brand basis or under our self-owned brands. Through the operating subsidiaries, we have a wide international footprint through offline sales channels, and the operating subsidiaries' products are mainly sold to customers in the U.S. and Germany. Through the operating subsidiaries, we also have online sales channels that allow our self-owned brands have a global reach. Customers of the operating subsidiaries range from wholesalers, dealers to retail customers. We believe that our integrated business model encompassing a value chain from research and development, patented technology, manufacturing, and operating localized sales branches and online sales channels, allows us to capture industry opportunities in a timely manner and provides us with a stable growth potential. During the six months ended June 30, 2024 and 2025, our revenue was primarily generated from our customers in North America and Europe.

Through the operating subsidiaries, we sell our products: (i) to offline overseas customers who own their brands on an Original Design Manufacturer ("ODM") basis; (ii) to offline overseas dealers who primarily resell white-label products and self-branded products to end consumers; and (iii) directly to customers on a retail basis under self-owned brands through online retail platforms. There is no major difference in terms of product capability between the ODM products and white-label products offered by the operating subsidiaries, and the main difference lies in product packaging and pricing.

Our revenue decreased by US$2.8 million, or 3.6%, from US$77.3 million for the six months ended June 30, 2024 to US$74.5 million for the six months ended June 30, 2025. For the six months ended June 30, 2024 and 2025, we realized a net income of US$4.3 million and a net loss of US$8.0 million, respectively. This shift was mainly due to (i) an increase in share-based compensation expenses of US$8.6 million resulting from share grants under the 2025 Equity Incentive Plan of the Company (the "2025 Equity Incentive Plan") (see Note 11 to our unaudited condensed consolidated financial statements and the related notes included elsewhere in the Form 6-K), (ii) a decrease of gross profit of US$4.2 million mainly due to a decrease in revenue from offline sales to dealers resulting from the fierce competition in the German and Eastern European markets and an increase in tariffs and ocean freight rates, and (iii) an increase of US$1.5 million in freight expenses charged by warehouses of the Online Selling Platforms (as defined below), offset by (iv) an increase in foreign exchange gain of US$2.3 million, mainly due to exchange rate fluctuations.

**Major Factors Affecting Our Results of Operations**

Our business and results of operations are affected by a number of general factors that impact compatible toner cartridge industry including, among others, economic, political and social conditions in the PRC, export regulations or enforcement, economic and regulatory conditions or global trade policy of the U.S. or Europe, changes in the business strategies of U.S. customers or European customers, any increase in customer demand for our products, raw material costs, and the competitive environment. Unfavorable changes in any of these general factors could adversely affect demand for our products and materially and adversely affect our results of operations.

While our business is influenced by these general factors, our results of operations are more directly affected by the following company-specific factors.

 ****

***Ability to retain existing customers or attract new customers***

The compatible toner cartridge market is characterized by rapid technological development and continual introduction of new models. As a specialized manufacturer of toner cartridges, our future success depends largely on the number of customers using the operating subsidiaries' products. To successfully maintain customer basis relies heavily upon excellent product quality and functionality, and prompt responses to the latest developments in the compatible toner cartridge market. Some factors that may affect the ability of the operating subsidiaries to meet customer demands and to attract customers include: the ability to (i) develop or acquire the necessary technical know-hows to design and manufacture new products and to enhance or adapt existing products to respond to changes in printer technologies, market trends and customer demands; (ii) manage growth while maintaining the consistency of product quality, promote products to a broader base of prospective customers; and (iii) provide satisfactory customer support and after-sale services in a timely manner. We believe the operating subsidiaries' strong design, research and development capabilities represent a key strength that allows us to provide patent-compliant products with advanced technologies to their customers.

 ****

 ****

***Ability to manage inventories efficiently***

Our inventories consist of raw materials, work-in-progress and finished goods. For self-branded products and white-label products, the operating subsidiaries' sales and marketing department, based on their understanding of historical sales and perceived market trends, formulates annual sales targets at the Company's level and at the regional level. The operating subsidiaries manufacture their ODM products on a made-to-order basis. We believe that maintaining an appropriate level of inventories helps the operating subsidiaries deliver their products to meet the market demands in a timely manner. Meanwhile, it is critical to keep close observation on changing sales condition due to change in consumer demand or preferences, change of marketing strategy by customers or incorrect estimation of the market demand for products, as well as technological upgrades of printer which renders the operating subsidiaries' toner cartridge not compatible with it anymore and exposes us to risks of obsolete inventories. Our research and development capabilities have been instrumental to the quality and time-to-market of the operating subsidiaries' products, which are our key strengths.

 ****

***Ability to establish higher prices for our products***

Our results of operations are affected by the pricing of the operating subsidiaries' products. For ODM products and white-label products, the operating subsidiaries generally price their products on the basis of a cost-plus calculation of the costs involved in manufacturing, and with reference to the prevailing market prices. For their self-branded products sold on an online e-commerce selling platform, the operating subsidiaries generally set the retail price based on their base selling prices, marketing expenses, fees paid to Amazon and eBay (collectively as the "Online Selling Platforms"), different brand positioning and prices of competing products. The operating subsidiaries are generally able to charge higher price for their products as a result of their localized operation and ancillary services provided to offline customers including drop ship service, private labeling and customized packing services. We believe that the quality and reliability of the operating subsidiaries' products coupled with their localized customer services are vital in maintaining customer loyalty and upholding their reputation and higher price of products.

 ****

***Ability to control production and material costs***

Our cost of inventory sold mainly consists of the raw materials used in production of toner cartridges such as OPC drums, toner and chips which form a major part of our cost of sales. The operating subsidiaries source raw materials predominantly from PRC suppliers. The prices of the operating subsidiaries' raw materials are largely dependent on market forces, such as fluctuations of commodity prices, market supply and demand, and logistics and transport costs. As their business further grows in scale and the operating subsidiaries establish themselves as a major player in the China compatible toner cartridges industry, the operating subsidiaries expect to have higher bargaining power and hence more favorable terms from suppliers, including pricing and payment terms.

 ****

***Impact related to global economic factors***

The military invasion of Ukraine by Russia and the sanctions against Russia resulting from such conflict may increase the likelihood of supply chain interruptions and may impair our ability to compete in current or future markets, or otherwise subject us to potential liability. In 2024, to mitigate potential adverse impacts on our business and operating results caused by the Russia-Ukraine war, we proactively reduced the scale of our sales in Russia and Ukraine. For the six months ended June 30, 2024 and 2025, we did not generate any revenue from Russia or Eastern Europe. As of the date of this report, we do not believe that our business segments, products, lines of service, projects, or operations have been materially impacted by the global supply chain disruptions and we cannot guarantee that we will not be materially impacted by the economic uncertainty and volatility in the markets in the future, especially in light of Russia's invasion of Ukraine.

***Global trade policies and tariffs***

Our results of operations are subject to risks arising from global trade policies and tariff regimes that impact cross-border commerce. Because we manufacture compatible toner cartridges that are primarily sold into the U.S. and European markets, changes in trade relations, the imposition of new tariffs, or the modification of existing duties could directly affect our cost structure and pricing. For example, tariffs on finished goods could reduce the competitiveness of our products in key markets.

In addition, shifts in trade policy between the U.S., the European Union (the "EU"), and other jurisdictions may create uncertainty in demand, supply chain logistics, and customer purchasing behavior. Heightened trade restrictions or retaliatory measures could limit our ability to source materials efficiently or to serve customers on commercially favorable terms. Recently, U.S. President, Donald J. Trump, announced that the U.S. would impose significant tariffs on Chinese imports. There have been ongoing negotiations between U.S, and Chinese government officials regarding these tariffs and the reciprocal tariffs introduced by the government of China. At present, Chinese and U.S. officials have reached an agreement to temporarily reduce reciprocal tariffs while trade negotiations continue. Despite this temporary pause, a heightened tariff environment persists, and there is no assurance that the reduced tariff rates will be extended or that additional tariffs or other trade restrictions will not be imposed with little warning. The additional tariffs imposed by the U.S. government on certain products imported from China may impact our supply chain and cost structure.

Tensions between the U.S. and China have led to a series of tariffs being imposed by the U.S. on imports from mainland China, as well as other business restrictions. The rise in tariff costs has directly pushed up the import costs of our products when entering the U.S. market, which adversely impacted the gross margin that we earn on our products. Tariffs can also make our products more expensive for customers, which could make our products less competitive and reduce consumer demand. Our revenue generated from the U.S. market were US$43.5 million and US$42.5 million for the six months ended June 30, 2024 and 2025, representing 56.3% and 57.0% of our total revenues, respectively. As of the date of this report, we believe that our business segments, products, lines of service, projects, or operations have not been materially impacted by the U.S. tariff policies. However, we cannot guarantee that we will not be materially impacted by future changes in U.S. tariff rates or related trade policy uncertainties and market volatility, especially in light of potential adjustments to Sino-U.S. trade relations and tariff measures.

Although we continue to monitor developments in trade policy and evaluate alternative sales strategies, the ultimate impact of global trade policies and tariffs remains difficult to predict and could materially affect our sales volumes, margins, and overall financial performance.

**Results of operations**

The following table sets forth a summary of our unaudited condensed consolidated results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2025** | **Amount** | **%** |
|  | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** |
| **Net revenue** | $**77264** | $**74508** | $**(2756)** | **(3.6)%** |
| Cost of revenue | (49044) | (50505) | (1461) | 3.0% |
| **Gross profit** | **28220** | **24003** | **(4217)** | **(14.9)%** |
| **Operating expenses:** |  |  |  |  |
| Selling expenses | (15761) | (18909) | (3148) | 20.0% |
| General and administrative expenses | (3671) | (8368) | (4697) | 127.9% |
| Research and development expenses | (2966) | (7267) | (4301) | 145.0% |
| **Total operating expenses** | **(22398)** | **(34544)** | **(12146)** | **54.2%** |
| **Income (loss) from operations** | **5822** | **(10541)** | **(16363)** | **(281.1)%** |
| **Other income (expenses):** |  |  |  |  |
| Other non-operating income, net | 1008 | 697 | (311) | (30.9)% |
| Government subsidy | 149 | 243 | 94 | 63.1% |
| Fair value loss on derivative instruments | (1156) | (14) | 1142 | (98.8)% |
| Foreign exchange (loss) gain | (507) | 1795 | 2302 | (454.0)% |
| Interest expense, net | (217) | (12) | 205 | (94.5)% |
| **Total other (expenses) income** | **(723)** | **2709** | **3432** | **(474.7)%** |
| **Income (loss) before income tax expense** | **5099** | **(7832)** | **(12931)** | **(253.6)%** |
| Income tax expense | (802) | (207) | 595 | (74.2)% |
| **Net income (loss)** | $**4297** | $**(8039)** | $**(12336)** | **(287.1)%** |

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**Key Components of Results of Operations**

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***Net revenue***

We generate revenue primarily from the sales of compatible toner cartridges and, to a lesser extent, from the sales of certain ancillary components of toner cartridges to customers offline and online. For the six months ended June 30, 2024 and 2025, our total revenue was US$77.3 million and US$74.5 million, respectively. During the periods, we derived substantially all of our revenue from sales of compatible toner cartridge products in North America, Europe and other countries primarily including China and Brazil.

The following table sets forth our revenue by sales channel for the periods indicated.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2025** | **Amount** | **%** |
|  | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** |
| Offline sales to dealers | $45668 | $39384 | $(6284) | (13.8)% |
| Offline sales to ODM customers | 25711 | 27735 | 2024 | 7.9% |
| Online sales to retail customers | 5885 | 7389 | 1504 | 25.6% |
| **Total net revenue** | $**77264** | $**74508** | $**(2756)** | **(3.6)%** |

---

The majority of our revenue for the six months ended June 30, 2024 and 2025 was generated from North America and Europe. The following table sets forth the disaggregation of our net revenue by area:  ****

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2025** | **Amount** | **%** |
|  | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** |
| North America | $47503 | $45255 | $(2248) | (4.7)% |
| Europe | 25918 | 22273 | (3645) | (14.1)% |
| Others | 3843 | 6980 | 3137 | 81.6% |
| **Total net revenue** | $**77264** | $**74508** | $**(2756)** | **(3.6)%** |

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***Cost of revenue***

Our cost of revenue primarily consists of the following components: (i) inventory costs, which primarily include procurement costs for chips, toner and OPC drum; (ii) staff costs, which consist of salaries and benefits of workers; (iii) depreciation expense relating to the depreciation of our plant, property and equipment used for production; (iv) freight charges incurred by us for delivering products from our factories to our warehouses abroad; (v) tariffs imposed to our products sold in the U.S.; and (vi) others, which primarily include overhead costs relating to consumables and electricity used for production.

The following table sets forth our cost of revenue by sales channel for the periods indicated.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2025** | **Amount** | **%** |
|  | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** |
| Offline sales to dealers | $27660 | $27283 | $(377) | (1.4)% |
| Offline sales to ODM customers | 19437 | 20459 | 1022 | 5.3% |
| Online sales to retail customers | 1947 | 2763 | 816 | 41.9% |
| **Total cost of revenue** | $**49044** | $**50505** | $**1461** | **3.0%** |

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***Gross profit and gross profit margin***

Gross profit represents our revenue less cost of sales. Our gross profit margin represents our gross profit as a percentage of our revenue. For the six months ended June 30, 2024 and 2025, our gross profit was US$28.2 million and US$24.0 million, respectively, and our gross profit margins were 36.5% and 32.2%, respectively.

The following table sets forth our gross profit and gross profit margin by sales channel for the periods indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2024** | **2025** | **2025** | | |
|  | **Gross <br> Profit** | **Gross Profit <br> Margin** | **Gross<br> Profit** | **Gross Profit <br> Margin** |<br>**Amount** |<br>**%** |
|  | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** | **(in USD in thousands)** |
| Offline sales to dealers | $18008 | 39.4% | $12101 | 30.7% | $(5907) | (32.8)% |
| Offline sales to ODM customers | 6274 | 24.4% | 7276 | 26.2% | 1002 | 16.0% |
| Online sales to retail customers | 3938 | 66.9% | 4626 | 62.6% | 688 | 17.5% |
| **Total gross profit** | $**28220** | **36.5%** | $**24003** | **32.2%** | $**(4217)** | **(14.9)%** |

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***Selling expenses***

Selling expenses primarily consist of: (i) salaries and benefits for our sales and marketing personnel; (ii) sales commission of the Online Selling Platforms; (iii) freight charges from our warehouses to our customers; (iv) traveling expenses incurred by our sales and marketing personnel for business purposes; (v) advertising and marketing expenses for promotion; (vi) depreciation relating to property, plant and equipment and leased properties used for selling and marketing purposes; and (vii) others, which primarily includes low-value consumables, office expenses and consulting expenses.

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***General and administrative expenses***

General and administrative expenses primarily consist of: (i) share-based compensation expenses; (ii) salaries and benefits for our administrative personnel; (iii) depreciation and amortization expenses relating to our property, plant and equipment and leased properties used for administrative purposes; (iv) office expenses, representing expenses for office supplies and consumables; (v) utilities which is primarily represented by water and electricity charges for administrative purposes; (vi) legal and professional fees, which primarily represented fees we paid for legal services in the ordinary course of our business, including tax filings and review, consultation and regulation of patents and trademarks, contract dispute resolution, among others and legal, accounting and consulting fees we paid in connection with our initial public listing; (vii) others, which primarily include bad debt expenses, utilities, traveling, repair and maintenance, recruitment expenses, property premium, and other miscellaneous expenses for administrative purposes.

***Research and development expenses***

Research and development expenses primarily include: (i) share-based compensation expenses; (ii) costs for procuring materials for research and development activities; (iii) salaries and benefits for research and development personnel; (iv) depreciation, which represents depreciation expenses for property, plant and equipment used for research and development purposes; (v) patent registration related expenses and patent litigation expenses; and (vi) others, which primarily include consumables, traveling expenses, utilities and miscellaneous expenses.

***Other income (expenses)***

Other income primarily consists of: (i) foreign exchange gain or loss arising from currency exchange among U.S. Dollar ("US$"), Euro ("EUR"), Hong Kong Dollar, Renminbi ("RMB") and Great Britain Pound; (ii) other non-operating income, inclusive of packing and labeling service fees, which represent fees we receive from providing services of adding labels with our customers' brand names and contact information on our white-label products, and sales of scrap materials, which represent sales of excess miscellaneous materials left over from our production; (iii) government subsidy for research and development activities and award for tax contributions; (iv) fair value changes on derivative instruments arising from foreign exchange forward contracts; and (v) interest expense on short-term bank borrowings, and interest expense on lease liabilities, which is non-cash and calculated as the difference between lease payments and the net present value of the lease payment over the entire term of the lease.

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***Income tax expenses***

 

*The Cayman Islands and the British Virgin Islands (the "BVI")*

We were incorporated in the Cayman Islands and several of our wholly owned subsidiaries were incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands and the BVI.

*Hong Kong*

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, effective April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits has been lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance ("IRO")) for corporations. We were not subject to Hong Kong profit tax for any period presented as it did not have assessable profit during the periods presented.

*United States*

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), which significantly changed previous U.S. tax laws, including a reduction of corporate income tax rate from 35% to 21% and a one-time transition tax on deemed repatriation of undistributed foreign earnings.

*Europe*

Our subsidiaries that were incorporated in EU countries, such as the Netherlands, Italy, and France, are subjected to enterprise income tax on the respective country's taxable income as determined under the tax laws and accounting standards at rates ranging from 16.5% to 28%.

*Mainland PRC*

Generally, our Mainland PRC subsidiaries are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%, except for our certain Mainland PRC subsidiaries that are qualified as high and new technology enterprises under the PRC Enterprise Income Tax Law and are eligible for a preferential enterprise income tax rate of 15%. The enterprise income tax is calculated based on the entity's global income as determined under Mainland PRC tax laws and accounting standards.

Our products are primarily subject to value-added tax at a rate of 13% on sales of compatible toner cartridges, in each case less any deductible value-added tax we have already paid or born. We are also subject to surcharges on value-added tax payments in accordance with Mainland PRC law.

Dividends paid by our Mainland PRC subsidiaries in Mainland China to our Hong Kong subsidiaries will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Double Taxation Avoidance Arrangement and receives approval from the relevant tax authority. If our Hong Kong subsidiaries satisfy all the requirements under the tax arrangement and receive approval from the relevant tax authority, then the dividends paid to the Hong Kong subsidiaries would be subject to withholding tax at the standard rate of 5%. Effective from November 1, 2015, the above-mentioned approval requirement has been abolished, but a Hong Kong entity is still required to file application package with the relevant tax authority, and settle the overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the relevant tax authority.

If we or any of our subsidiaries outside of Mainland China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.

Under the PRC Enterprise Income Tax Law and the Notice on Improvements to Policies of Weighted Pre-tax Deduction of Research and Development Expenses, research and development expenses incurred by an enterprise in the course of carrying out research and development activities that have not formed intangible assets and are included in the profit and loss account for the current year. Starting from January 1, 2021, besides deducting the actual amount of research and development expenses incurred, an enterprise is allowed an additional 100% deduction of the amount in calculating its taxable income for the relevant year, the rate of which was 75% before 2021. For research and development expenses that have formed intangible assets, the tax amortization is based on 200% of the costs of the intangible assets.

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According to the Announcement on Preferential Income Tax policies for Small and micro enterprises and Individual industrial and commercial households (Caishui[2023] NO.6) issued by the Ministry of Finance and the State Taxation Administration on March 26, 2023, for small and low-profit enterprises with an annual taxable income not exceeding RMB1 million (equivalent to US$0.1 million), a reduction of 25% will be included in the taxable income and the enterprise income tax will be paid at a 20% tax rate. The execution period of this announcement is from January 1, 2023 to December 31, 2024. According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Further Supporting the Development of Small and Micro Enterprises and Individual Businesses in Relevant Tax Policies (Caishui[2023] NO.12) issued by the Ministry of Finance and the State Taxation Administration on August 2, 2023, the execution period is extended to December 31, 2027. During the six months ended June 30, 2024 and 2025, Jiangxi Leibotai Electronic Technology Co., Ltd., a subsidiary of the Company, was a small and low-profit enterprise as defined under the policy.

 **

**Comparison of Results of Operations for the Six Months Ended June 30, 2024 and 2025**

 

***Net revenue***

 

*<u>Comparison by Sales Channel</u>*

For our offline sales to dealers, we mainly sell white-label products and self-branded products through our offline channels. Our revenue from offline sales to dealers decreased by 13.8%, from US$45.7 million for the six months ended June 30, 2024 to US$39.4 million for the six months ended June 30, 2025, mainly due to the lower per unit selling prices resulting from the fierce competition in the German and Eastern European markets.

For our direct offline sales to ODM customers, our revenue increased by 7.9%, from US$25.7 million for the six months ended June 30, 2024 to US$27.7 million for the six months ended June 30, 2025, which was primarily driven by expanded sales volume resulting from a significant surge in orders from U.S. customers following the suspension of additional Sino-U.S. tariff hikes in May 2025.

For our online sales, we mainly sell self-branded and household products through the Online Selling Platforms. Our revenue generated from online sales increased by 25.6%, from US$5.9 million for the six months ended June 30, 2024 to US$7.4 million for the six months ended June 30, 2025, mainly due to a marked increase in sales volume driven by the establishment of our independent e-commerce websites in Europe and increased orders from U.S. customers following the suspension of additional Sino-U.S. tariff hikes in May 2025.

*<u>Comparison by Area</u>*

Our revenue generated from North America remained steady with a slight decrease from US$47.5 million for the six months ended June 30, 2024 to US$45.3 million for the six months ended June 30, 2025.

Our revenue generated from Europe decreased by 14.1%, from US$25.9 million for the six months ended June 30, 2024 to US$22.3 million for the six months ended June 30, 2025, primarily attributable to our decision to lower per unit selling prices in order to retain and acquire customers amid intense competition in the German and Eastern European markets.

Our revenue generated from others increased by US$3.2 million, or 81.6%, from US$3.8 million for the six months ended June 30, 2024 to US$7.0 million for the six months ended June 30, 2025, resulting from our market expansion in China and Brazil.

 ****

***Cost of revenue***

Our cost of revenue increased by 3.0% from US$49.0 million for the six months ended June 30, 2024 to US$50.5 million for the six months ended June 30, 2025, primarily attributable to (i) a US$1.0 million increase in costs of revenue attributable to offline sales to ODM customers consistent with higher offline sales volume to ODM customers, and (ii) an increase of US$0.8 million in the costs of revenue attributable to online sales to retail customers mainly due to the higher ocean freight charges.

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***Gross profit and gross profit margin***

Gross profit of offline sales to dealers decreased by 32.8%, from US$18.0 million for the six months ended June 30, 2024 to US$12.1 million for the six months ended June 30, 2025 and the gross profit margin rate decreased from 39.4% to 30.7%, primarily due to the decrease in sales volume resulting from fierce competition in the German and Eastern European markets.

Gross profit of offline sales to ODM customers increased by 16.0%, from US$6.3 million for the six months ended June 30, 2024 to US$7.3 million for the six months ended June 30, 2025, and the gross margin rate increased from 24.4% to 26.2%, mainly due to the increased sales volume of new patented products with higher gross profit margins.

Gross profit of online sales to retail customers increased by 17.5%, from US$3.9 million for the six months ended June 30, 2024 to US$4.6 million for the six months ended June 30, 2025, primarily due to the increase in sales volume. Gross profit margin decreased from 66.9% for the six months ended June 30, 2024 to 62.6% for the six months ended June 30, 2025, mainly due to the increase in tariffs and ocean freight rates.

***Selling expenses***

Our selling expenses increased from US$15.8 million for the six months ended June 30, 2024 to US$18.9 million for the six months ended June 30, 2025, primarily driven by (i) an increase of US$1.5 million in freight expenses charged by warehouses of the Online Selling Platforms, (ii) an increase of US$1.0 million in payroll expenses resulting from headcount expansion to support our business development; and (iii) an increase of US$0.4 million due to the execution of new lease agreements, which aligns with our ongoing business expansion efforts.

***General and administrative expenses***

Our general and administrative expenses increased by US$4.7 million, from US$3.7 million for the six months ended June 30, 2024 to US$8.4 million for the six months ended June 30, 2025, mainly due to an increase in share-based compensation expenses of US$4.1 million resulting from share grants under the 2025 Equity Incentive Plan.

***Research and development expenses***

Our research and develop expenses increased from US$3.0 million for the six months ended June 30, 2024 to US$7.3 million for the six months ended June 30, 2025, which was primarily attributable to an increase in share-based compensation expenses of US$4.5 million resulting from share grants under the 2025 Equity Incentive Plan.

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***Other income (expenses)***

For the six months ended June 30, 2024 and 2025, we recorded other expenses of US$0.7 million and other income of US$2.7 million, respectively, representing a positive swing of US$3.4 million from a net other expense position to a net other income position. The improvement was primarily attributable to (i) a decrease of US$2.3 million in foreign exchange loss and (ii) a decrease of US$1.1 million in fair value loss on derivative instruments, mainly due to the maturity of existing derivative instruments and our decision not to enter into any new ones during the first half of 2025. We realized a foreign exchange gain of US$1.8 million for the six months ended June 30, 2025, in contrast to a foreign exchange loss of US$0.5 million for the six months ended June 30, 2024, mainly resulting from foreign exchange rate fluctuations among US$, EUR and RMB.

 ****

***Income tax expenses***

Our income tax expenses decreased from US$0.8 million for the six months ended June 30, 2024 to US$0.2 million for the six months ended June 30, 2025, which was primarily due to the decrease in the taxable income for the six months ended June 30, 2025.

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***Net income (loss)***

As a result of the foregoing, we recorded net income of US$4.3 million for the six months ended June 30, 2024 and a net loss of US$8.0 million for the six months ended June 30, 2025.

**Liquidity and Capital Resources**

As of June 30, 2025, we had US$52.9 million in cash and cash equivalents and restricted cash, which consisted of (i) cash in mainland China of US$22.3 million; (ii) cash in the BVI of US$20.5 million; (iii) cash in Hong Kong of $4.1 million, (iv) cash in the Cayman Islands of $3.0 million; (v) cash in Europe of US$1.4 million; (vi) cash in the U.S. of US$1.0 million; and (vii) cash in the UK of US$0.6 million. As of December 31, 2024, we had US$45.9 million in cash and cash equivalents and restricted cash, which consisted of (i) cash in mainland China of US$17.9 million; (ii) cash in the BVI of US$20.1 million; (iii) cash in the Cayman Islands of $3.6 million; (iv) cash in Europe of US$1.4 million; (v) cash in the U.S. of US$1.3 million; (vi) cash in Hong Kong of US$0.9 million; and (vii) cash in the U.K. of US$0.7 million. Under the existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange of the PRC by complying with certain procedural requirements. Therefore, there is no material restriction on foreign exchange that impairs our ability to transfer cash between entities and to U.S. investors.

Our net cash flow used in operating activities for the six months ended June 30, 2024 and 2025, was US$2.4 million and US$4.3 million, respectively. Our principal source of cash came from our operational income and bank loans. Most of our cash resources were used to pay for the procurement of raw materials, purchase of equipment and property, and payroll and rental expense. We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements, capital expenditures and debt repayment obligations for at least the next 12 months.

**Cash Flows**

The following table sets forth a summary of our cash flows for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **Change** | **Change** |
|  | **2024** | **2025** | **Amount** | **%** |
| Net cash used in operating activities | $(2415) | $(4493) | $(2078) | 86.0% |
| Net cash (used in)/provided by investing activities | (482) | 3499 | 3981 | (825.9)% |
| Net cash provided by financing activities | 8161 | 7661 | (500) | (6.1)% |
| Effects of exchange rate changes | (67) | 309 | 376 | (561.2)% |
| **Net increase in cash and cash equivalents and restricted cash** | **5197** | **6976** | **1779** | **34.2%** |
| Cash and cash equivalents and restricted cash, at beginning of the period | 64166 | 45886 | (18280) | (28.5)% |
| **Cash and cash equivalents and restricted cash, at end of the period** | $**69363** | $**52862** | $**(16501)** | **(23.8)%** |

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***Operating activities***

For the six months ended June 30, 2025, our net cash used in operating activities was US$4.5 million, which was primarily attributable to (i) net loss of US$8.0 million; (ii) an adjustment of added back non-cash items of a net amount of US$11.6 million, inclusive of share-based compensation, provision for inventory reserve, amortization and depreciation, and other non-cash items; and (iii) changes in working capital that negatively affected the cash flow from operating activities, primarily including (a) an increase of $5.5 million in accounts receivable, primarily due to the increased sales volume from offline ODM customers, which were subject to longer payment terms; (b) a decrease of US$3.4 million in accrued expenses and other current liabilities, mainly due to the decrease in payroll payable; and (c) a decrease of $7.5 million in accounts payable and notes payable, mainly due to the decline in procurement volume; and mainly offset by (iv) changes in working capital that positively affected the cash flow from operating activities, primarily including (a) a decrease of inventories of US$5.4 million resulting from the lower procurement volume compared to the year-end peak sales season and the increased sales volume from offline ODM customers with lower inventory requirements, and (b) a decrease of $3.0 million in prepaid expenses and other current assets mainly due to lower advance payments to vendors and a decrease in prepaid expenses.

For the six months ended June 30, 2024, our net cash used in operating activities was US$2.4 million, which was primarily attributable to (i) net income of US$4.3 million; (ii) an adjustment of added back non-cash items of a net amount of US$2.5 million, inclusive of provision for inventory reserve, unrealized fair value loss, amortization and depreciation, deferred income tax expenses, and other non-cash items; (iii) changes in working capital that negatively affected the cash flow from operating activities, primarily including (a) an increase of $6.1 million in accounts receivable, primarily due to the increase in revenue and extended credit terms for some customers; (b) a decrease of $5.3 million in accrued expenses and other current liabilities, mainly due to the decrease in payroll payable; and (c) an increase of $1.1 million in inventories, mainly due to the delayed shipment timelines caused by tight international maritime shipping capacity as of the end of June 2024; and mainly offset by (iv) changes in working capital that positively affected the cash flow from operating activities, primarily including an increase of accounts payable of US$4.0 million as a few significant suppliers extended our payment terms.

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***Investing activities***

For the six months ended June 30, 2025, our net cash provided by investing activities was US$3.5 million, which mainly consisted of proceeds of US$6.5 million from sales of short-term investments, offset by US$2.6 million in purchase of short-term investments.

For the six months ended June 30, 2024, our net cash used in investing activities was US$0.5 million, which consisted of payments for acquisition of property, plant and equipment.

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***Financing activities***

For the six months ended June 30, 2025, our net cash provided by financing activities was US$7.7 million, which consisted of net proceeds of US$7.7 million from short-term bank borrowings.

For the six months ended June 30, 2024, our net cash provided by financing activities was US$8.2 million, which mainly consisted of net proceeds of US$4.3 million from short-term bank borrowings and contribution from controlling shareholder of US$4.3 million.

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***Capital expenditures***

Our capital expenditures are incurred primarily in connection with purchase of moulds for production, upgrades of production equipment, purchases of motor vehicles and electronic and other equipment for office use, and office renovation. Our capital expenditures were US$0.5 million and US$0.4 million for the six months ended June 30, 2024 and 2025, respectively. We will continue to make capital expenditures to support the expected growth of our business.

**Tabular Disclosure of Contractual Obligations**

The following table sets forth our contractual obligations as of June 30 ,2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** |
|  | **Total** | **Less than<br> 1 year** | **1 – 3<br> years** | **3 – 5<br> years** |
|  | **(in USD in thousand)** | **(in USD in thousand)** | **(in USD in thousand)** | **(in USD in thousand)** |
| Borrowings | $31268 | $31268 | $- | $- |
| Lease obligations | 6720 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1599 | &nbsp;&nbsp;&nbsp;&nbsp;2896 | &nbsp;&nbsp;&nbsp;&nbsp;2225 |
| **Total** | $**37988** | $**32867** | $**2896** | $**2225** |

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Capital commitments are commitments in relation to the purchase of property and equipment including leasehold improvements. Operating lease obligations consist of leases in relation to certain offices and buildings, plants and other property for our sales and after-sales network.

Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of June 30, 2025.

**Off-Balance Sheet Arrangements**

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders' equity or that are not reflected in our unaudited condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

**Trend Information**

Other than as disclosed below and elsewhere in this report on Form 6-K, we are not aware of any trends, uncertainties, demands, commitments, or events for the period from January 1, 2025 to June 30, 2025 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity, or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.

**Critical Accounting Estimates**

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements.

We prepare our financial statements in conformity with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.

The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our unaudited condensed consolidated financial statements and other disclosures included in this report. When reviewing our unaudited condensed financial statements, you should consider (i) our selection of critical accounting policies; (ii) the judgments and other uncertainties affecting the application of such policies, and (iii) the sensitivity of reported results to changes in conditions and assumptions.

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***Use of estimates***

The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, at the balance sheet date, and revenues and expenses during the reported periods. Significant accounting estimates include but not limited to allowance for credit losses, impairment provision for inventories, useful lives and impairment of long-lived assets, determination of the fair value of derivative instruments and derivative liability arising from foreign exchange forward contracts, accounting for deferred income taxes and valuation allowance for deferred tax assets. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.

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***Accounts receivable, net***

Accounts receivables are recognized in the period when we have provided services to its customers and when its right to consideration is unconditional. We adopted ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments", including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, "ASC 326") on January 1, 2023 using the modified retrospective transition approach. ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of the new standard did not have a material effect on our unaudited condensed consolidated financial statements.

Account receivables are stated net of provision of credit losses. We have developed a current expected credit loss ("CECL") model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. We consider historical collection rates, current financial status, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses.

***Inventories, net***

Inventories, primarily consisting of raw materials, goods in transit, worked in progress and finished goods, are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined using the weighted average cost method. We write down the cost of obsolete and slow-moving inventories to the estimated net realizable value, based on inventory obsolescence trends, historical experience, forecasted consumer demand and application of the specific identification method.

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***Revenue recognition***

Our revenues are mainly generated from the sales of compatible toner cartridges through offline and online channels. We provide products: (i) to offline overseas customers who own their brands on an ODM basis; (ii) to offline overseas dealers who primarily sell our self-branded products and white-label products to end consumers; and (iii) directly to customers on a retail basis under our self-owned brands through online retail platforms. There is no major difference in terms of product capability between our ODM products, white-label products and self-own brand products, and the main difference lies in product packaging and pricing.

We usually enter into sales orders with customers or receives online sales orders, in which we identify the only performance obligation is to transfer the promised products stated in the sales order. We perform shipping services before the products are delivered at the designated place. Shipping service is determined as an activity to fulfill our promise to transfer the products, rather than another distinct performance obligation as it is performed before the customers obtain control of the products. In the normal course of business, our warranties are limited to product specifications, and we do not accept product returns unless the item is defective as manufactured. Accordingly, warranty costs are treated as a cost of fulfillment subject to accrual, rather than a performance obligation. We establish provisions for both estimated returns and warranties when revenue is recognized.

Revenues represent the amount of consideration that we are entitled to, including products settlement price, net of value-added tax ("VAT"), surcharges, discounts and returns, if any. The transaction price is variable as adjusted by return allowances, rebates, which we estimate by using the expected value method and updates to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. We consider ourselves a principal as we self-produce all the products. We recognize revenue from the sales of compatible toner cartridges at a point in time when the control of products is transferred to the customers upon customers' acceptance on a gross basis. Payment is usually required within four months after the issuance of invoice for offline customers and the consideration of online orders is collected in advance of shipment by online platform. Therefore, it is probable that we will collect substantially all of the consideration without existence of any significant financing component.

<u>Disaggregation of Revenue</u>

We disaggregate our revenue from contracts by sales channel and region, as we believe it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. Our disaggregation of revenues for the six months ended June 30, 2024 and 2025 are disclosed in Note 17 of our unaudited condensed consolidated financial statements included elsewhere in this report.

<u>Contract balance</u>

When either party to a revenue contract has performed, we present the contract in the unaudited condensed consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between our performance and the customer's payment. We merely incur cost to obtain a contract with a customer. We present any unconditional rights to consideration separately as a receivable. We do not have any contract asset.

We present the consideration that a customer pays before we transfer products to the customer as a contract liability (advance from customers) when the payment is made. Advance from customers is our obligation to transfer products to a customer for which we have received consideration from the customer.

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***Recent accounting pronouncements***

A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this report.

We are an emerging growth company ("EGC") as defined by the Jumpstart Our Business Startups Act (the "JOBS Act"). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to take advantage of the extended transition periods that leads to our financial statements may not be comparable to companies that comply with public company effective dates. However, this election will not apply should we cease to be classified as an EGC.