# EDGAR Filing Document

**Accession Number:** 0001738758
**File Stem:** 0001213900-25-072323
**Filing Date:** 2025-8
**Character Count:** 129213
**Document Hash:** 5caf1e0c617bc38b89c8062239657c55
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-072323.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0001213900-25-072323

**CONFORMED SUBMISSION TYPE**: 6-K/A

**PUBLIC DOCUMENT COUNT**: 84

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Cheer Holding, Inc.
- **CENTRAL INDEX KEY:** 0001738758
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38631
- **FILM NUMBER:** 251187552

**BUSINESS ADDRESS:**
- **STREET 1:** 19F, BLOCK B, XINHUA TECHNOLOGY BUILDING
- **STREET 2:** NO. 8 TUOFANGYING SOUTH RD, JIUXIANQIAO
- **CITY:** CHAOYANG DISTRICT, BEIJING
- **STATE:** F4
- **ZIP:** 100016
- **BUSINESS PHONE:** 86-13810355988

**MAIL ADDRESS:**
- **STREET 1:** 19F, BLOCK B, XINHUA TECHNOLOGY BUILDING
- **STREET 2:** NO. 8 TUOFANGYING SOUTH RD, JIUXIANQIAO
- **CITY:** CHAOYANG DISTRICT, BEIJING
- **STATE:** F4
- **ZIP:** 100016

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GLORY STAR NEW MEDIA GROUP HOLDINGS Ltd
- **DATE OF NAME CHANGE:** 20200219

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TKK SYMPHONY ACQUISITION Corp
- **DATE OF NAME CHANGE:** 20180426

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

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K/A**

**(To Form 6-K filed on July 30, 2025)**

**REPORT OF FOREIGN PRIVATE ISSUER**

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

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

**For the month of July, 2025**

**Commission File Number: 001-38631** 

**CHEER HOLDING, INC.**

**19F, Block B, Xinhua Technology Building, No. 8 Tuofangying South Road, Jiuxianqiao, Chaoyang District, Beijing, China 100016**

**(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 ☒ Form 40-F ☐

**Explanatory Note**

CHEER HOLDING, INC. (the "**Company**") is furnishing this Form 6-K/A ("Amendment") to amend its Form 6-K originally furnished on July 30, 2025 (the "Original 6-K"). The purpose of this Amendment is to (i) correct the number of Class A ordinary shares, par value $0.001 ("Class A Ordinary Shares"), outstanding as of June 30, 2025, (ii) reflect the issuance of Class A Ordinary Shares to certain employees as compensation expense, and (iii) file its Unaudited Interim Consolidated Financial Statements for the Six Months Ended June 30, 2025 and 2024, and Operating and Financial Review attached as Exhibits 99.1 and 99.2 hereto. This Amendment replaces in its entirety the information and disclosure contained in the Original 6-K. Accordingly, the information and disclosure contained in the Original 6-K, including exhibits attached thereto, should not be relied upon.

This Amendment on Form 6-K and Exhibits 99.1 and 99.2 attached hereto shall be deemed to be incorporated by reference in the registration statements of on [Form S-8](http://www.sec.gov/Archives/edgar/data/1738758/000121390024082774/ea0215738-s8_cheerhold.htm) (File No. 333-282386) and on [Form F-3](http://www.sec.gov/Archives/edgar/data/1738758/000121390024040929/ea0204528-f3_cheer.htm) (File No. 333-279221), each as filed with the Securities and Exchange Commission, to the extent not superseded by documents or reports subsequently filed.

**Press Release**

A news release entitled "Cheer Holding Issues Correction to 2025 Half Year Results" is attached as Exhibit 99.3. The news release referred to in this report and attached as an exhibit hereto shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filings made by the Company under the Securities Act, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

**Exhibit Index**

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| 99.1 | [Unaudited Interim Consolidated Financial Statements for the Six Months Ended June 30, 2025 and 2024.](ea025176501ex99-1_cheerhold.htm) |
| 99.2 | [Operating and Financial Review](ea025176501ex99-2_cheerhold.htm) |
| 99.3 | [Cheer Holding Issues Correction to 2025 Half Year Results](ea025176501ex99-3_cheerhold.htm) |
| 101.INS | Inline XBRL Instance 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 Label 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.

---

| | |
|:---|:---|
| **Cheer Holding, Inc.** | **Cheer Holding, Inc.** |
| By: | /s/ Bing Zhang |
| Name: | Bing Zhang |
| Title: | Chief Executive Officer |

---

Dated: August 6, 2025

## Exhibit 99.1

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

**Exhibit 99.1**

**CHEER HOLDING, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(In U.S. dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30,<br> 2025** | **As of<br> December 31,<br> 2024** |
|  | **(unaudited)** | |
| **Assets** | | |
| **Current assets:** | | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $203228 | $197660 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 86238 | 77074 |
| &nbsp;&nbsp;&nbsp;Prepayment and other current assets, net | 34072 | 30834 |
| **Total current assets** | **323538** | **305568** |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 18 | 33 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 38784 | 40531 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 77 | 72 |
| &nbsp;&nbsp;&nbsp;Unamortized produced content, net | 16 | 16 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 316 | 371 |
| **Total non-current assets** | **39211** | **41023** |
| **TOTAL ASSETS** | $**362749** | $**346591** |
| **Liabilities and Equity** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Short-term bank loans | $7678 | $9590 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1479 | 2039 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 31 | 27 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | 1986 | 1941 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 1100 | 1100 |
| &nbsp;&nbsp;&nbsp;Other taxes payable | 26661 | 25095 |
| &nbsp;&nbsp;&nbsp;Lease liabilities current | 107 | 109 |
| **Total current liabilities** | **39042** | **39901** |
| &nbsp;&nbsp;&nbsp;Long-term bank loan | 1396 | 1370 |
| &nbsp;&nbsp;&nbsp;Lease liabilities non-current | 120 | 250 |
| **Total non-current liabilities** | **1516** | **1620** |
| **TOTAL LIABILITIES** | $**40558** | $**41521** |
| **Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred shares (par value of $0.0001 per share; 2,000,000 shares authorized as of June 30, 2025 and December 31, 2024; nil and nil shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | $- | $- |
| &nbsp;&nbsp;&nbsp;Class A Ordinary shares (par value of $0.001 per share; 500,000,000 shares and 200,000,000 authorized as of June 30, 2025 and December 31, 2024; 11,635,568 and 10,285,568 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | 11 | 10 |
| &nbsp;&nbsp;&nbsp;Class B Ordinary shares (par value of $0.001 per share; 500,000 shares and 500,000 shares authorized as of June 30, 2025 and December 31, 2024; 500,000 and 500,000 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | - | - |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 116913 | 113485 |
| &nbsp;&nbsp;&nbsp;Statutory reserve | 1411 | 1411 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 214883 | 207128 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (11107) | (17041) |
| **TOTAL CHEER HOLDING, INC SHAREHOLDERS' EQUITY** | **322111** | **304993** |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | 80 | 77 |
| **TOTAL EQUITY** | **322191** | **305070** |
| **TOTAL LIABILITIES AND EQUITY** | $**362749** | $**346591** |

---

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

**CHEER HOLDING, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND**

**COMPREHENSIVE INCOME**

**(In U.S. dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Revenues** | $70993 | $71055 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenues | (20772) | (18885) |
| &nbsp;&nbsp;&nbsp;Selling and marketing | (35321) | (37559) |
| &nbsp;&nbsp;&nbsp;General and administrative | (4243) | (1611) |
| &nbsp;&nbsp;&nbsp;Research and development | (2333) | (1361) |
| **Total operating expenses** | **(62669)** | **(59416)** |
| **Income from operations** | **8324** | **11639** |
| Other income (expenses): |  |  |
| &nbsp;&nbsp;&nbsp;Interest (expenses) income, net | (61) | 223 |
| &nbsp;&nbsp;&nbsp;Other expense, net | (511) | (23) |
| **Total other (expenses) income** | **(572)** | **200** |
| **Income before income tax** | **7752** | **11839** |
| Income tax benefits | 4 | 578 |
| **Net income** | **7756** | **12417** |
| Less: net gain attributable to non-controlling interest | 1 | 1 |
| **Net income attributable to Cheer Holding. Inc's shareholders** | $**7755** | $**12416** |
| **Other comprehensive income (loss)** |  |  |
| Unrealized foreign currency translation income (loss) | 5936 | (6856) |
| Comprehensive income | 13692 | 5561 |
| Less: comprehensive gain (loss) attributable to non-controlling interests | 3 | (1) |
| **Comprehensive income attributable to Cheer Holding. Inc's shareholders** | $**13689** | $**5562** |
| Earnings per ordinary share |  |  |
| &nbsp;&nbsp;&nbsp;Basic and Diluted\* | $**0.67** | $**1.23** |
| Weighted average shares used in calculating earnings per ordinary share |  |  |
| &nbsp;&nbsp;&nbsp;Basic and Diluted\* | 11583358 | 10058846 |

---

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

**CHEER HOLDING, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**(In U.S. dollars in thousands, except share and per share data)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | **Cheer Holding, Inc.'s Shareholders** | | |
|  | **Class A ordinary shares** | **Class A ordinary shares** | **Class B ordinary shares** | **Class B ordinary shares** | | | | | | | |
|  | **Shares\*** | **Amount** | **Shares** | **Amount** | **Additional paid-in**<br>**capital** | **Retained**<br>**earnings** | **Statutory**<br>**reserve** | **Accumulated other comprehensive**<br>**(loss) gain** | **Total Cheer Holding, Inc.s' shareholder'**<br>**equity** |<br>**Non- controlling**<br>**interests** |<br>**Total Shareholders'**<br>**Equity** |
| **Balance as of December 31, 2023** | **10070012** | $**10** | - | $- | $**106215** | $**181162** | $**1411** | $**(8869)** | $**279929** | $**78** | $**280007** |
| Withdrawal of contribution from shareholder |  | - |  | - | (4) | - | - | - | (4) | - | (4) |
| Share-based compensation\* | 231909 | 0 | - | - | 584 | - | - | - | 584 | - | 584 |
| Cancellation of shares due to roundup of fractional shares in share consolidation\* | (16353) | (0) | - | - | - | - | - | - | - | - | - |
| Net income for the period |  | - |  | - | - | 12416 | - | - | 12416 | 1 | 12417 |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | (6854) | (6854) | (2) | (6856) |
| **Balance as of June 30, 2024** | **10285568** | $**10** | - | $- | $**106795** | $**193578** | $**1411** | $**(15723)** | $**286071** | $**77** | $**286148** |
| **Balance as of December 31, 2024** | **10285568** | $**10** | **500000** | $**0** | $**113485** | $**207128** | $**1411** | $**(17041)** | $**304993** | $**77** | $**305070** |
| Share-based compensation | 1350000 | 1 |  |  | 3428 |  |  |  | 3429 |  | 3429 |
| Net income for the period |  | - |  | - | - | 7755 | - | - | 7755 | 1 | 7756 |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | 5934 | 5934 | 2 | 5936 |
| **Balance as of June 30, 2025** | **11635568** | $**11** | **500000** | $**0** | $**116913** | $**214883** | $**1411** | $**(11107)** | $**322111** | $**80** | $**322191** |

---

\* The amount of ordinary shares issued for share-based compensation and the amount of ordinary shares cancelled were below 1,000.

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

**CHEER HOLDING, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(In U.S. dollars in thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net cash provided by (used in) operating activities | $3920 | $(6741) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from bank loans | 7583 | 7071 |
| &nbsp;&nbsp;&nbsp;Repayments of bank loans | (9652) | (4242) |
| &nbsp;&nbsp;&nbsp;Payment of loan origination fees | (47) | (58) |
| &nbsp;&nbsp;&nbsp;Borrowings from a related party | - | 205 |
| &nbsp;&nbsp;&nbsp;Withdrawal of contribution from shareholder | - | (4) |
| Net cash (used in) provided by financing activities | (2116) | 2972 |
| Effect of exchange rate changes | 3764 | (4376) |
| Net increase (decrease) in cash and cash equivalents | 5568 | (8145) |
| Cash and cash equivalents, at beginning of period | 197660 | 194525 |
| Cash and cash equivalents, at end of period | $203228 | 186380 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Interests paid | $250 | $199 |
| &nbsp;&nbsp;&nbsp;Acquisition of intangible asset from settlement of prepayments | $702 | $- |
| &nbsp;&nbsp;&nbsp;Lease liabilities arising from obtaining right-of-use assets | $- | $466 |

---

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

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** 

**(In U.S. dollars in thousands, except share and per share data)**

**1. ORGANIZATION AND PRINCIPAL ACTIVITIES**

Cheer Holding, Inc. ("CHR" or the "Company") is an exempted company incorporated on November 30, 2018, under the laws of the Cayman Islands. Glory Star, through its subsidiaries, the VIE and the VIE's subsidiaries, provides advertisement and content production services and operate a leading mobile and online advertising, media and entertainment business in China.

As of June 30, 2025, the Company's subsidiaries, the VIEs and the VIE's subsidiaries were as the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Date of<br> incorporation** | **Place of<br> incorporation** | **Percentage of<br> legal/beneficial<br> ownership<br> by the<br> Company** | **Principal<br> activities** |
| **Subsidiaries:** |  |  | |  |
| Glory Star New Media Group HK Limited <br> ("Glory Star HK") | December 18, 2018 | Hong Kong | 100% | Holding |
| Glory Star New Media (Beijing) <br> Technology Co., Ltd. ("WFOE") | March 13, 2019 | PRC | 100% | Holding |
| **VIEs:** |  |  |  |  |
| Horgos Glory Star Media Co., Ltd. <br> ("Horgos") | November 1, 2016 | PRC | 100% | Holding |
| **VIEs' subsidiaries** |  |  |  |  |
| Glory Star Media (Beijing) Co., Ltd.<br> ("Glory Star Beijing") | December 9, 2016 | PRC | 100% | Provision of provides advertisement and content production services |
| Leshare Star (Beijing) Technology Co., Ltd. <br> ("Beijing Leshare") | March 28, 2016 | PRC | 100% | Provision of provides advertisement and content production services |
| Horgos Glary Prosperity Culture Co., Ltd. <br> ("Glary Prosperity") | December 14, 2017 | PRC | 51% | Provision of provides advertisement and content production services |
| Horgos Glary Prosperity Culture Co., Ltd, Beijing Branch ("Glary Prosperity BJ") | May 8, 2018 | PRC | 51% | Provision of provides advertisement and content production services |
| Glory Star (Horgos) Media Technology Co., Ltd <br> ("Horgos Technology") | September 9, 2020 | PRC | 100% | Provision of provides advertisement and content production services |

---

On September 4, 2024, the Company effected the increase of the Company's authorized share capital as from US$200,200 divided into 200,000,000 ordinary shares of a par value of US$0.001 each and 2,000,000 preferred shares of a par value of US$0.0001 each; to US$200,700 divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Shares") and 2,000,000 preferred shares of a par value of US$0.0001 each; by the creation of 500,000 Class B ordinary shares of a par value of US$0.001 each. Class A Shares and Class B Shares shall at all times vote together as one class, and each Class A Share shall be entitled to one (1) vote and each Class B Share shall be entitled to one hundred (100) votes. Class B Shares are not convertible into Class A Shares, and may be redeemed by the Company at par value at the option of the holder.

On May 12, 2025, the shareholders authorized and approved an increase in the number of authorized Class A ordinary shares, par value US$0.001 per share, from 200,000,000 to 500,000,000. In connection with this approval, the shareholder resolution ("Amendment Resolution") was filed with the Registrar of Companies of the Cayman Islands on May 13, 2025, and incorporated into the Third Amended and Restated Memorandum and Articles of Association (the "MAA"). This filing of the Amendment Resolution to the MAA effected an increase of the Company's authorized share capital from US$200,700, divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Shares"), and 2,000,000 preferred shares of a par value of US$0.0001 each, to US$500,700, divided into 500,000,000 Class A Shares, 500,000 Class B Shares, and 2,000,000 preferred shares of a par value of US$0.0001 each.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

***Basis of presentation***

The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Security and Exchange Commission and accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in conformity with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2024 filed on March 10, 2025.

In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company's consolidated financial statements for the year ended December 31, 2024. The results of operations for the six months ended June 30, 2025 and 2024 are not necessarily indicative of the results for the full years.

***Financial statement amounts and balances of the VIEs and the VIEs' subsidiaries***

Total assets and liabilities presented on the Company's unaudited condensed consolidated balance sheets and revenue, expense, net income presented on the Company's unaudited condensed consolidated statements of income as well as the cash flow from operating, investing and financing activities presented on the unaudited condensed consolidated statements of cash flows are substantially the financial position, operation and cash flow of the VIEs and the VIEs' subsidiaries. CHR has not provided any financial support to the VIEs and the VIEs' subsidiaries for the six months ended June 30, 2025 and 2024. The following financial statements amounts and balances of the VIEs and the VIEs' subsidiaries were included in the unaudited condensed consolidated financial statements as of June 30, 2025 and December 31, 2024, and for the six months ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| Total assets | $355077 | $338591 |
| Total liabilities | $138253 | $137430 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| Total revenues | $70993 | $71055 |
| Net income | $11709 | $13463 |
| Net cash provided by (used in) operating activities | $7863 | $(6247) |
| Net cash (used in) provided by financing activities | $(2069) | $2829 |

---

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Financial statement amounts and balances of the VIEs and the VIEs' subsidiaries (cont.)***

The VIEs and the VIEs' subsidiaries contributed 100% and 100% of the consolidated revenues for the six months ended June 30, 2025 and 2024. As of June 30, 2025 and December 31, 2024, the VIEs and the VIEs' subsidiaries accounted for an aggregate of 97.9% and 97.7%, respectively, of the consolidated total assets, and 95.4% and 95.5%, respectively, of the consolidated total liabilities.

There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, the Company has provided and will continue to provide financial support to the VIEs considering the business requirements of the VIEs, as well as the Company's own business objectives in the future.

There are no assets held in the VIEs and the VIEs' subsidiaries that can be used only to settle obligations of the VIEs and the VIEs' subsidiaries, except for registered capital and the PRC statutory reserves. As the VIEs and the VIEs' subsidiaries are incorporated as a limited liability company under the PRC Company Law, creditors of the VIEs and the VIEs' subsidiaries do not have recourse to the general credit of the Company for any of the liabilities of the VIEs and the VIEs' subsidiaries. Relevant PRC laws and regulations restrict the VIEs and the VIEs' subsidiaries from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends.

***Accounts Receivable, net***

On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), using the modified retrospective transition method. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606.

The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as "General and administrative expenses" in the consolidated statements of income and comprehensive income. The Company assesses collectability by reviewing accounts receivable on an individual basis because the Company had limited customers and each of them has difference characteristics, primarily based on business line and geographical area. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, credit quality of the Company's customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company's ability to collect from customers. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Unamortized produced content***

Produced content includes direct production costs, production overhead and acquisition costs and is stated at the lower of unamortized cost or estimated fair value. Produced content also includes cash expenditures made to enter into arrangements with third parties to co-produce certain of its productions.

The Company uses the individual-film-forecast-computation method and amortizes the produced content based on the ratio of current period actual revenue (numerator) to estimated remaining unrecognized ultimate revenue as of the beginning of the fiscal year (denominator) in accordance with ASC 926. Ultimate revenue estimates for the produced content are periodically reviewed and adjustments, if any, will result in prospective changes to amortization rates. When estimates of total revenues and other events or changes in circumstances indicate that a film or television series has a fair value that is less than its unamortized cost, a loss is recognized currently for the amount by which the unamortized cost exceeds the film or television series' fair value. For the six months ended June 30, 2025 and 2024, $13,429 and $13,020 were amortized to the cost of sales, respectively. For the six months ended June 30, 2025 and 2024, the Company did not provide impairment against unamortized production cost.

***Accounts payable***

Accounts payable represent liabilities for goods and services provided to the Company prior to the end of financial period which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.

Accounts payable are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest method.

***Contract liabilities***

Contract liabilities amounted to $31 and $27 at June 30, 2025 and December 31, 2024, respectively, which represent advance payment received from our customers for goods or services that had not yet been provided.

The Company will recognize the advances as revenue when it has transferred control of the goods or services to which the advances relate, and has no obligation under the contract to transfer additional goods or services.

***Revenue Recognition***

The Company adopted Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, to recognize revenues. The core principle of this new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the company satisfies a performance obligation

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

 

***Revenue Recognition (cont.)***

 

The Company mainly offers and generates revenue from the copyright licensing of self-produced content, advertising and customized content production and others. Revenue recognition policies are discussed as follows:

 

*Copyright revenue*

The Company self produces or coproduces TV series featuring lifestyle, culture and fashion, and licenses the copyright of the TV series on an episode basis to the customer for broadcast over a period of time. Generally, the Company signs a contract with a customer which requires the Company to deliver a series of episodes that are substantially the same and that have the same pattern of transfer to the customer. Accordingly, the delivery of the series of episodes is defined as the only performance obligation in the contract.

For the TV series produced solely by the Company, the Company satisfies its performance obligation over time by measuring the progress toward the delivery of the entire series of episodes which is made available to the licensee for exhibition after the license period has begun. Therefore, the copyright revenue in a contract is recognized over time based on the progress of the number of episodes delivered.

The Company also coproduces TV series with other producers and licenses the copyright to third-party video broadcast platforms for broadcast. For TV series produced by the Company with co-producers, the Company satisfies its performance obligations over time by the delivery of the entire series of episodes to the customer, and requires the customer to pay consideration based on the number and the unit price of valid subsequent views of the TV series that occur on a broadcast platform. Therefore, the copyright revenue is recognized when the later of the valid subsequent view occurs or the performance obligation relating to the delivery of a number of episodes has been satisfied.

*Advertising revenue*

The Company generates revenue from sales of various forms of advertising on its TV series and streaming content by way of 1) advertisement displays, or 2) the integration of promotion activities in TV series and content to be broadcast. Advertising contracts are signed to establish the different contract prices for different advertising scenarios, consistent with the advertising period. The Company enters into advertising contracts directly with the advertisers or the third-party advertising agencies that represent advertisers.

For the contracts that involve the third-party advertising agencies, the Company is principal as the Company is responsible for fulfilling the promise of providing advertising services and has the discretion in establishing the price for the specified advertisement. Under a framework contract, the Company receives separate purchase orders from advertising agencies before the broadcast. Accordingly, each purchase order is identified as a separate performance obligation, containing a bundle of advertisements that are substantially the same and that have the same pattern of transfer to the customer. Where collectability is reasonably assured, revenue is recognized monthly over the service period of the purchase order.

For contracts signed directly with the advertisers, the Company commits to display a series of advertisements which are substantially the same or similar in content and transfer pattern, and the display of the whole series of advertisements is identified as the single performance obligation under the contract. The Company satisfies its performance obligations over time by measuring the progress toward the display of the whole series of advertisements in a contract, and advertising revenue is recognized over time based on the number of advertisements displayed.

Payment terms and conditions vary by contract types, and terms typically include a requirement for payment within a period from 6 to 9 months. Both direct advertisers and third-party advertising agencies are generally billed at the end of the display period and require the Company to issue VAT invoices in order to make their payments.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Revenue Recognition (cont.)***

 

*Customized content production revenue*

The Company produces customized short streaming videos according to its customers' requirement, and earns fixed fees based on delivery. Revenue is recognized upon the delivery of short streaming videos.

*CHEERS E-mall marketplace service revenue*

The Company through CHEERS E-mall, an online e-commerce platform, enables third-party merchants to sell their products to consumers in China. The Company charges fees for platform services to merchants for sales transactions completed on the Cheer E-Mall including but not limited to products displaying, promotion and transaction settlement services. The Company does not take control of the products provided by the merchants at any point in the time during the transactions and does not have latitude over pricing of the merchandise. Transaction services fee is determined as the difference between the platform sales price and the settlement price with the merchants. CHEERS E-mall marketplace service revenue is recognized at a point of time when the Company's performance obligation to provide marketplace services to the merchants are determined to have been completed under each sales transaction upon the consumers confirming the receipts of goods. Payments for services are generally received before deliveries.

The Company provides coupons to consumers at our own discretion as incentives to promote CHEERS E-mall marketplace with validity usually around or less than one week, which can only be used in future purchases of eligible merchandise offered on CHEERS E-mall to reduce purchase price that are not specific to any merchant. Consumers are not customers of the Company, therefore incentives offered to consumers are not considered consideration payable to customers. As the consumers are required to make future purchases of the merchants' merchandise to redeem these coupons, the Company does not accrue any expense for coupons when granted and recognizes the amounts of redeemed coupons as marketing expenses when future purchases are made.

*Other Revenues*

Other revenue primarily consists of copyrights trading of purchased and produced TV-series and the sales of products on Taobao platform. For copyright licensing of purchased and produced TV-series, the Company recognize revenue on net basis at a point of time upon the delivery of master tape and authorization of broadcasting right. For sales of product, the company recognize revenue upon the transfer of products according to the fixed price and production amount in sales orders.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Revenue Recognition (cont.)***

The following table identifies the disaggregation of our revenue for the six months ended June 30, 2025 and 2024, respectively:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Category of Revenue:** |  |  |
| Advertising revenue | $70955 | $70855 |
| CHEERS e-Mall marketplace service revenue | 36 | 120 |
| Other revenue | 2 | 80 |
| **Total** | $**70993** | $**71055** |
| **Timing of Revenue Recognition:** |  |  |
| Services transferred over time | $70955 | $70855 |
| Services transferred at a point in time | 36 | 120 |
| Goods transferred at a point in time | 2 | 80 |
| **Total** | $**70993** | $**71055** |

---

The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company does not have any significant incremental costs of obtaining contracts with customers incurred and/or costs incurred in fulfilling contracts with customers within the scope of ASC Topic 606, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract.

***Segment reporting***

 ****

ASC 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Company's chief operating decision makers in deciding how to allocate resources and assess performance. The Company's chief operating decision maker ("CODM") has been identified as the Chief Executive Officer, who reviews consolidated results including revenue, gross profit and operating profit at a reportable segment level only (Note 16).

For the six months ended June 30, 2025 and 2024, the Company identified two segments, namely (i) Cheers APP internet business, and (ii) traditional media businesses

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Concentration and Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk are cash and cash equivalents, and accounts receivable arising from its normal business activities. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions.

The Company's operations are carried out in the PRC. Accordingly, our business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, and by the general state of the economy of the PRC. Our operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalent. All of our cash is maintained with state-owned banks, commercial banks or third-party service provider certified by the People's bank of China, such as Alipay, within the PRC. Per PRC regulations, the maximum insured bank deposit amount is RMB500 (approximately $70) for each financial institution. The Company's total unprotected cash held in bank amounted to approximately $202,714 and $196,652 as of June 30, 2025 and December 31, 2024, respectively. The Company has not experienced any losses in such accounts and believes the Company is not exposed to any risks on our cash held in bank accounts.

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company's assessment of its customers' creditworthiness and its ongoing monitoring of outstanding balances.

The Company's sales are made to customers that are located primarily in China. The Company has a concentration of its revenues and receivables with specific customers. For the six months ended June 30, 2025, six customers accounted for 22%, 18%, 16%, 16%, 11% and 11% of the Company's total revenue, respectively. For the six months ended June 30, 2024, five customers accounted for 27%, 21%, 14%, 14% and 14% of the Company's total revenue, respectively.

As of June 30, 2025, five customers accounted for 25%, 18% ,16%,15%and 12% of the net accounts receivable balance, respectively. As of December 31, 2024, four customers accounted for 24%, 22%, 16% and 13% of the net accounts receivable balance, respectively.

As of June 30, 2025, two vendors accounted for 74% and 15% of the accounts payable, respectively. As of December 31, 2024, three vendors accounted for 53%, 27% and 11% of the accounts payable, respectively.

*Foreign Currency Translation*

The reporting currency of the Company is the U.S. dollar ("USD"). The functional currency of subsidiaries, VIEs and VIEs' subsidiaries located in China is the Chinese Renminbi ("RMB"). For the entities whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the consolidated statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

 

***Concentration and Credit Risk (cont.)***

 

All of the Company's revenue and expense transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

The unaudited condensed consolidated balance sheet amounts, with the exception of equity, at June 30, 2025 and December 31, 2024 were translated at RMB 7.1636 to $1.00 and at RMB 7.2993 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to unaudited condensed consolidated statements of income and cash flows for the six months ended June 30, 2025 and 2024 were RMB 7.2526 to $1.00 and RMB 7.0716 to $1.00, respectively.

***Recently adopted accounting standards***

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 Company adopted ASU 2023-07 on January 1, 2025, retrospectively to all periods presented in the consolidated financial statement. The adoption of this standard did not have a material impact to the Company's results of operations, cash flows or financial condition.

***Recent Accounting Pronouncements***

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". This pronouncement amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The Board developed the new guidance in conjunction with the Private Company Council to address concerns from stakeholders that estimating expected credit losses can be costly and complex for such transactions. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively.

In January 2025, the FASB issued ASU 2025-01, "Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date." This pronouncement revises the effective date of ASU 2024-03 and clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU's scope are permitted to early adopt the accounting standard update.

In November 2024, the FASB issued ASU 2024-03, "Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses." This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted, and the disclosures in this standard are required to be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

***Recent Accounting Pronouncements (cont.)***

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC's disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the SEC's requirements. Also, the amendments align the requirements in the Codification with the SEC's regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC's removal.

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

**3. ACCOUNTS RECEIVABLE, NET**

As of June 30, 2025 and December 31, 2024, accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| Accounts receivable | $87110 | $77853 |
| Less: allowance for expected credit losses | (872) | (779) |
| **Accounts receivables, net** | $**86238** | $**77074** |

---

For the six months ended June 30, 2025 and 2024, the movement of allowance for expected credit losses is as the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>June 30,<br> 2024** |
| Opening balance | $779 | $820 |
| Provision of allowance for expected credit losses | 77 | 5 |
| Foreign exchange adjustment | 16 | (19) |
| Ending balance | $**872** | $**806** |

---

**4. PREPAYMENT AND OTHER CURRENT ASSETS**

As of June 30, 2025 and December 31, 2024, prepayment and other current and non-current assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| Advances to vendors | $36168 | $32907 |
| Staff advance | 104 | 85 |
| Others | 37 | 38 |
| **Subtotal** | **36309** | **33030** |
| Less: allowance for expected credit losses | (2237) | (2196) |
| **Prepayment and other assets, net** | $**34072** | $**30834** |

---

For the six months ended June 30, 2025 and 2024, the Company did not provide allowance against the advances to vendors. As of June 30, 2024, the balance of allowance of expected credit losses increased, which was caused by foreign exchange adjustment.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**5. PROPERTY, PLANT AND EQUIPMENT, NET**

As of June 30, 2025 and December 31, 2024, property, plant and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30,**<br> **2025** | **As of<br> December 31,<br> 2024** |
| Electronic equipment | $568 | $767 |
| Office equipment and furniture | 69 | 68 |
| Leasehold improvement | 181 | 177 |
|  | **818** | **1012** |
| Less: accumulated depreciation | (800) | (979) |
|  | $**18** | $**33** |

---

For the six months ended June 30, 2025 and 2024, depreciation expense amounted to $5 and $30, respectively.

**6. INTANGIBLE ASSETS, NET**

As of June 30, 2025 and December 31, 2024, intangible assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| Intangible assets | $55602 | $53870 |
| Less: accumulated amortization | (16818) | (13339) |
|  | $**38784** | $**40531** |

---

The balance of intangible assets mainly represents software related to CHEERS App, primarily consisting of e-mall, online game, video media library and data warehouse modules, etc., CheerCar App, NFT App, Cheer Chat App, and AI App which were acquired externally tailored to the Company's requirements and is amortized straight-line over 7 years in accordance with the way the Company estimates to generate economic benefits from such software.

For the six months ended June 30, 2025 and 2024, amortization expense amounted to $3,186 and $1,657, respectively. The following is a schedule, by periods, of amortization amount of intangible asset as of June 30, 2025:

---

| | |
|:---|:---|
| For the six months ending December 31, 2025 | $3688 |
| For the year ending December 31, 2026 | 7375 |
| For the year ending December 31, 2027 | 7375 |
| For the year ending December 31, 2028 | 6943 |
| For the year ending December 31, 2028 and thereafter | 13403 |
| **Total** | $**38784** |

---

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**7. ACCRUED LIABILITIES AND OTHER PAYABLES**

As of June 30, 2025 and December 31, 2024, accrued liabilities and other payables consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| Payroll payables | $1192 | $1165 |
| Other payables | 794 | 776 |
|  | $**1986** | $**1941** |

---

**8. OTHER TAXES PAYABLE**

As of June 30, 2025 and December 31, 2024, other taxes payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| VAT payable | $21592 | $20234 |
| Income tax payable | 2433 | 2388 |
| Business tax payable | 2631 | 2467 |
| Others | 5 | 6 |
|  | $**26661** | $**25095** |

---

**9. BANK LOANS, CURRENT AND NON CURRENT**

Bank loans represent the amounts due to various banks that are due within and over one year. As of June 30, 2025 and December 31, 2024, bank loans consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| **Short-term bank loans:** |  |  |
| &nbsp;&nbsp;Loan from Xiamen International Bank | $2792 | $2740 |
| &nbsp;&nbsp;Loan from China Citic Bank | 2792 | 2740 |
| &nbsp;&nbsp;Loan from Bank of Beijing | - | 2740 |
| &nbsp;&nbsp;Loan from Huaxia Bank | 2094 | 1370 |
|  | $**7678** | $**9590** |
| Long-term bank loans: |  |  |
| &nbsp;&nbsp;&nbsp;Loan from China Construction Bank | $1396 | $1370 |
|  | $**1396** | $**1370** |

---

*Short-term bank loans*

For the six months ended June 30, 2025, the Company entered into loan agreements with three banks, pursuant to the Company borrowed an aggregate of $7,583 from the banks with maturity dates due in August 2025 through April 2025. The loan bore per annum interest rates ranging between 3.20% and 4.75%. For the six months ended June 30, 2025, the Company also repaid an aggregate of $9,652 to four banks.

For the six months ended June 30, 2024, the Company entered into loan agreements with three banks, pursuant to the Company borrowed an aggregate of $7,071 from the banks with maturity dates due in August 2024 through March 2025. The loan bore per annum interest rates ranging between 3.20% and 5.50%. For the six months ended June 30, 2024, the Company also repaid an aggregate of $4,242 to two banks.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**9. BANK LOANS, CURRENT AND NON CURRENT** (cont.)

*Long-term bank loans*

For the year ended December 31, 2023, the Company entered into loan agreements with one bank, pursuant to the Company borrowed a three-year bank borrowing of $1,412 from the banks with maturity date due in September 2026. The loan bore an interest rates of 3.95% per annum.

*<u>Guarantee information</u>*

As of June 30, 2025, the guarantee information for bank borrowings were as below:

The loans from Huaxia Bank Co., Ltd. West Railway Station Branch were guaranteed by Beijing Zhongguancun Technology Financing Guarantee Co., LTD, and Mr. Zhang Bing, the Chairman of the Company's board of directors.

**10. LEASES**

The Company leases offices space under non-cancellable operating leases, with terms ranging from one to five years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate.

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to operating lease was as follows:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| **Right-of-use assets** | $**316** | $**371** |
| Lease liabilities current | $107 | $109 |
| Lease liabilities non-current | 120 | 250 |
|  | $**227** | $**359** |

---

The weighted average remaining lease terms and discount rates for the operating lease were as follows as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>June 30,<br> 2025** | **As of**<br>December 31,<br> 2024** |
| **Remaining lease term and discount rate:** | | |
| Weighted average remaining lease term (years) | 1.60 | 2.10 |
| Weighted average discount rate | 5.50% | 5.50% |

---

For the six months ended June 30, 2025 and 2024, the Company incurred total operating lease expenses of $77 and $99, respectively.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**10. LEASES** (cont.)

The following is a schedule of maturities of lease liabilities as of June 30, 2025:

---

| | |
|:---|:---|
|  | **As of<br> December 31,**<br> **2024** |
| For the six months ending December 31, 2025 | $96 |
| For the year ending December 31, 2026 | 191 |
| Total lease payments | 287 |
| Less: Imputed interest | (60) |
| **Present value of lease liabilities** | $**227** |

---

**11. RELATED PARTY TRANSACTIONS**

As of March 31, 2025 and December 31, 2024, the Company had amount of $1,100 due to Mr. Zhang Bin, the Chairman of the Company's board of directors. The balance represented interest free borrowings from Mr. Zhang Bin. The borrowings were repayable on demand and did not require of guarantees or pledges from the Company.

Other than the above, the Company did not enter into related party arrangements with any related parties for the six months ended June 30, 2025 and 2024.

**12. INCOME TAXES**

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the six months ended June 30, 2025 and 2024, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets arising from net operating losses for the VIEs and the VIEs' subsidiaries. The Company maintains a full valuation allowance on its net deferred tax assets arising from net operating losses as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, the Company had deferred tax assets of $77 and $72, respectively, arising from net operating assets by loss-making subsidiaries and allowance of accounts receivable.

The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense. For the six months ended June 30, 2025 and 2024, the Company had deferred income tax benefits of $4 and $578, respectively. For the six months ended June 30, 2025 and 2024, the Company did not incur current income tax expenses.

*Uncertain tax positions*

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of June 30, 2025 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**13. SHARE-BASED COMPENSATION TO EMPLOYEES**

On January 7, 2025, the Company granted 1,350,000 ordinary shares to certain employee as compensation expenses. The ordinary shares were fully vest upon grant. For the six months ended June 30, 2025, the Company recognized share-based compensation expenses of $3,429 in the account of "general and administrative expenses". As of June 30, 2025, there are no unrecognized compensation expense

On June 26, 2024, the Company granted 231,909 ordinary shares to an employee as compensation expenses. The ordinary shares were fully vest upon grant. For the six months ended June 30, 2024, the Company recognized share-based compensation expenses of $584 in the account of "general and administrative expenses". As of June 30, 2024, there are no unrecognized compensation expense.

**14. EQUITY** 

<u>Preferred Shares</u> 

The Company is authorized to issue 2,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company's Board of Directors. At June 30, 2025 and December 31, 2024, there were no preferred shares issued or outstanding.

<u>Ordinary Shares</u>

The Company is authorized to issue 200,000,000 ordinary shares with a par value of $0.0001 per share. Holders of the ordinary shares are entitled to one vote for each share.

On November 24, 2023, the Company effected a share consolidation at a ratio of one-for-tenth (10) ordinary shares with a par value of US$0.0001 each in the Company's issued and unissued share capital into one ordinary share with a par value of US$0.001 ("the Share Consolidation"). Immediately following the Share Consolidation, the authorized share capital of the Company to be US$20,200 divided into 20,000,000 ordinary shares of a par value of US$0.001 each and 2,000,000 preferred shares of a par value of US$0.0001 each. The Company believed that it was appropriate to reflect the transactions on a retroactive basis pursuant to ASC 260, *Earnings Per Share.* The Company has retroactively adjusted all share and per share data for all periods presented.

On September 4, 2024, the Company effected the increase of the Company's authorized share capital as from US$200,200 divided into 200,000,000 ordinary shares of a par value of US$0.001 each and 2,000,000 preferred shares of a par value of US$0.0001 each; to US$200,700 divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Shares") and 2,000,000 preferred shares of a par value of US$0.0001 each; by the creation of 500,000 Class B ordinary shares of a par value of US$0.001 each. Class A Shares and Class B Shares shall at all times vote together as one class, and each Class A Share shall be entitled to one (1) vote and each Class B Share shall be entitled to one hundred (100) votes. Class B Shares are not convertible into Class A Shares, and may be redeemed by the Company at par value at the option of the holder. The Company has retroactively adjusted all share and per share data from ordinary share to Class A Ordinary Shares for all periods presented.

On May 12, 2025, the shareholders authorized and approved an increase in the number of authorized Class A ordinary shares, par value US$0.001 per share, from 200,000,000 to 500,000,000. In connection with this approval, the shareholder resolution ("Amendment Resolution") was filed with the Registrar of Companies of the Cayman Islands on May 13, 2025, and incorporated into the Third Amended and Restated Memorandum and Articles of Association (the "MAA"). This filing of the Amendment Resolution to the MAA effected an increase of the Company's authorized share capital from US$200,700, divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Shares"), and 2,000,000 preferred shares of a par value of US$0.0001 each, to US$500,700, divided into 500,000,000 Class A Shares, 500,000 Class B Shares, and 2,000,000 preferred shares of a par value of US$0.0001 each.

Giving the effects of the share consolidation, as of June 30, 2025 and December 31, 2024, there were 11,635,568 and 10,285,568 Class A Ordinary Shares issued and outstanding, respectively, and there were 500,000 and 500,000 Class B Ordinary Shares issued and outstanding, respectively.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**14. EQUITY (**cont.**)**

<u>Public Warrants</u>

Pursuant to the Initial Public Offering, TKK sold 2,500,000 Units (after giving effect to share consolidation effected in November 2023) at a purchase price of $100.00 per Unit (after giving effect to share consolidation effected in November 2023), inclusive of 300,000 Units (after giving effect to share consolidation effected in November 2023) sold to the underwriters on August 22, 2018 upon the underwriters' election to partially exercise their over-allotment option. Each Unit consists of one ordinary share, one warrant ("Public Warrant") and one right ("Public Right"). Each Public Warrant entitles the holder to purchase one-half of one ordinary share at an exercise price of $115.00 per whole share. Each Public Right entitles the holder to receive one-tenth of one ordinary share at the closing of a Business Combination.

Public Warrants may only be exercised for a whole number of shares. No fractional ordinary shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.01 per warrant;

● at any time while the Public Warrants are exercisable;

● upon no less than 30 days' prior written notice of redemption to each Public Warrant holder;

● if, and only if, the reported last sale price of the Company's ordinary shares equals or exceeds $18.00 per share, for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and

● if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a "cashless basis," as described in the warrant agreement.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**14. EQUITY (**cont.**)**

<u>Public Warrants</u> (cont.)

The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a capitalization of shares, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below their exercise price or issuance of potential extension warrants in connection with an extension of the period of time for the Company to complete a Business Combination. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company's assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

On February 14, 2025, the 2,500,000 public warrants expired and were delisted from Nasdaq Stock Market. As of June 30, 2025 and December 31, 2024, the Company had nil and 2,500,000 of public warrants outstanding, respectively.

<u>Rights</u>

Each holder of a Public Right will automatically receive one-tenth (1/10) of an ordinary share upon consummation of a Business Combination, even if the holder of a Public Right converted all ordinary shares held by him, her or it in connection with a Business Combination or an amendment to the Company's Amended and Restated Memorandum and Articles of Association with respect to its pre-business combination activities. Upon the closing of the Business Combination, the Company issued 250,433 shares in connection with an exchange of Public Rights.

<u>Statutory reserve</u>

Horgos, Beijing Glory Star, Beijing Leshare, Shenzhen Leshare, Glary Prosperity, and Horgos Technology in the PRC, are required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends.

<u>Non-controlling interest</u>

As of June 30, 2025 and December 31, 2024, the Company's non-controlling interest represented 49% equity interest of Horgos Glary Prosperity.

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**15. PRIVATE PLACEMENT WARRANTS** 

Simultaneously with the closing of the Initial Public Offering, Symphony Holdings Limited ("Symphony") purchased an aggregate of 1,180,000 Private Placement Warrants (after giving effect to share consolidation effected in November 2023) at $5.00 per Private Placement Warrant for an aggregate purchase price of $5,900. On August 22, 2018, TKK consummated the sale of an additional 120,000 Private Placement Warrants at a price of $5.00 per Private Placement Warrant, generating gross proceeds of $600. Each Private Placement Warrant is exercisable to purchase one-half of one ordinary share at an exercise price of $115.00 per whole share.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants (i) are not redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, so long as they are held by the initial purchaser or any of its permitted transferees. If the Private Placement Warrants are held by holders other than the initial purchasers or any of their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. In addition, the Private Placement Warrants may not be transferable, assignable or salable until the consummation of a Business Combination, subject to certain limited exceptions.

On February 14, 2025, the 1,300,000 private warrants expired and were delisted from Nasdaq Stock Market. As of June 30, 2025 and December 31, 2024, the Company had nil and 1,300,000 of public warrants outstanding, respectively.

The warrant liability related to such private placement warrants was remeasured to its fair value at each reporting period. The change in fair value was recognized in the unaudited condensed consolidated statements of income. For the six months ended June 30, 2025 and 2024, the change in fair value of the warrant liability was zero.

The fair value of the private warrants was estimated using the binomial option valuation model. The application of the binomial option valuation model requires the use of a number of inputs and significant assumptions including volatility. Significant judgment is required in determining the expected volatility of the common share. Due to the limited history of trading of the Company's common share, the Company determined expected volatility based on a peer group of publicly traded companies. The following reflects the inputs and assumptions used:

---

| | |
|:---|:---|
|  | **For the Six Months<br> Ended <br> June 30,<br> 2024** |
| **Category of Revenue:** | |
| Stock price | $2.6 |
| Exercise price | $115.00 |
| Risk-free interest rate | 5.33% |
| Expected term (in years) | 0.62 |
| Expected dividend yield | - |
| Expected volatility | 94.0% |

---

**CHEER HOLDING, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(In U.S. dollars in thousands, except share and per share data)**

**16. SEGMENT INFORMATION**

Based on management's assessment, the Company has determined that it has four operating segments as defined by ASC 280, including Cheers APP internet business and traditional media businesses. Cheers APP Internet Business generates advertising revenue from broadcasting IP short video, live streaming and APP advertising through Cheer APP and service revenue from Cheers E-mall marketplace. Traditional Media Business mainly contributes the advertising revenue from Cheers TV-series, copyright revenue, customized content production revenue and others.

The CODM measures the performance of each segment based on metrics of revenues and earnings from operations and uses these results to evaluate the performance of, and to allocate resources to, each of the segments. The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on consolidated net income as reported in the consolidated statements of operations and comprehensive income. Operating expenses are reviewed in aggregate. As most of the Company's long-lived assets are located in the PRC and most of the Company's revenues are derived from the PRC, no geographical information is presented.

The table below provides a summary of the Company's operating segment results For the six months ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended <br> June 30,** | **For the Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| Net revenues: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | $65497 | $61506 |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | 5496 | 9549 |
| Total consolidated net revenues | 70993 | 71055 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | (54655) | (50926) |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | (4585) | (7906) |
| Total segment operating expenses | (59240) | (58832) |
| Operating income: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | 10842 | 10580 |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | 911 | 1643 |
| Total segment operating income | 11753 | 12223 |
| Unallocated item \* | (3429) | (584) |
| Total consolidated operating income | $8324 | $11639 |

---

\* The unallocated item for the six months ended June 30, 2025 and 2024 presents the share-based compensation for employees, which is not allocated to segments.

**17. COMMITMENTS**

***Capital expenditure commitments***

The Company has commitments for capital expenditures totaling $8,795 as of June 30, 2025. These commitments are primarily related to the development of VR platform.

**18. SUBSEQUENT EVENT**

These unaudited condensed consolidated financial statements were approved by management and available for issuance on July 31, 2025. The Company has evaluated subsequent events through this date and concluded that there are no additional reportable subsequent events other than that disclosed in above.

## Exhibit 99.2

**Exhibit 99.2**

**OPERATING AND FINANCIAL REVIEW**

**<u>Overview</u>**

We provide advertisement and content production services and operate a leading mobile and online advertising, media and entertainment business in China. Major production from us includes short videos, online variety show, online drama, living stream and CHEERS series. We are fast becoming one of the leading contents driven e-commerce platforms in China. We focus on creating original lifestyle content to monetize our advertising and e-commerce platform. We mainly offer and generate revenue from the copyright licensing of self-produced content, advertising and customized content production and CHEERS e-Mall marketplace service, membership fees, and others.

*Operating activities*

In February 2024, we launched the Year of the Dragon Edition of CHEERS Telepathy. This major upgrade included substantial advancements in model architecture, computing power, and content creation capabilities, including painting, text-to-image, image-to-image, commercial scenarios, dialogue, and long-form text generation.

In June 2024, we released CHEERS Telepathy 2.0. This version featured more advanced and complicated algorithms and models, more powerful application capacity, and more comprehensive AI interaction functionalities to improve user experience, as well as a richer, more diverse and authentic generation effect. As of September 2024, CHEERS Telepathy supports users in 12 countries and regions.

In December 2024, we released CHEERS Telepathy 2.5. This upgrade provided further technical and application advancements, integrating innovative AI tools for content creators.

In December 2023, our Beijing subsidiary was recognized as a National High-Tech Enterprise. In April 2024, our Beijing subsidiary was recognized as Specialized and Innovative Enterprise. The Company's consecutive recognition as both National High-Tech Enterprise and Specialized and Innovative Enterprise specializing in advanced technologies underscores its leadership in technological innovation, robust market competitiveness, and dominant position within the media technology sector. These accolades highlight the Company's ability to deliver cutting-edge, unique products through specialized expertise.

*Financing and investing activities*

 

On September 9, 2024, the Company closed a Subscription Agreement (the "Subscription Agreement") with Mr. Bing Zhang, the Company's Chairman, Director, Chief Executive Officer and Chief Financial Officer. Pursuant to the Subscription Agreement, the Company agreed to issue and sell to Mr. Zhang an aggregate of 500,000 Class B Ordinary Shares of the Company, at par, for an aggregate purchase price of US$500, or US$0.001 per share (the "Share Purchase").

On December 3, 2024, the Company announced that its board of directors (the "Board") has authorized a $50 million repurchase program of its Class A Ordinary Shares over the next 36 months. As of the date of this annual report, no Class A ordinary shares have been repurchased by the Company.

**Share Consolidation**

On November 24, 2023, the Company effected a share consolidation at a ratio of one-for-tenth (10) ordinary shares with a par value of $0.0001 each in the Company's issued and unissued share capital into one ordinary share with a par value of approximately $0.001 ("the Share Consolidation"). Immediately following the Share Consolidation, the authorized share capital of the Company to be $20,200 divided into 20,000,000 ordinary shares of a par value of $0.001 each and 2,000,000 preferred shares of a par value of $0.0001 each.

**Charter Amendment — Adoption of Dual-Class Share Structure**

On September 4, 2024, the Company effected the increase of the Company's authorized share capital as from US$200,200 divided into 200,000,000 ordinary shares of a par value of US$0.001 each and 2,000,000 preferred shares of a par value of US$0.0001 each; to US$200,700 divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Ordinary Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Ordinary Shares") and 2,000,000 preferred shares of a par value of US$0.0001 each; by the creation of 500,000 Class B ordinary shares of a par value of US$0.001 each. Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class, and each Class A Ordinary Share shall be entitled to one (1) vote and each Class B Ordinary Share shall be entitled to one hundred (100) votes. Class B Ordinary Shares are not convertible into Class A Ordinary Shares, and may be redeemed by the Company at par value at the option of the holder.

On May 12, 2025, the shareholders authorized and approved an increase in the number of authorized Class A ordinary shares, par value US$0.001 per share, from 200,000,000 to 500,000,000. In connection with this approval, the shareholder resolution ("Amendment Resolution") was filed with the Registrar of Companies of the Cayman Islands on May 13, 2025, and incorporated into the Third Amended and Restated Memorandum and Articles of Association (the "MAA"). This filing of the Amendment Resolution to the MAA effected an increase of the Company's authorized share capital from US$200,700, divided into 200,000,000 Class A ordinary shares of a par value of US$0.001 each (the "Class A Shares"), 500,000 Class B ordinary shares of a par value of US$0.001 each (the "Class B Shares"), and 2,000,000 preferred shares of a par value of US$0.0001 each, to US$500,700, divided into 500,000,000 Class A Shares, 500,000 Class B Shares, and 2,000,000 preferred shares of a par value of US$0.0001 each.

**Key Factors that Affect Operating Results**

We believe that our results of operations are significantly affected by the following key factors:

***Ability to maintain and grow users and user time spent on the CHEERS App***

Our success depends on our ability to maintain and grow users and user time spent on the CHEERS App. To attract and retain users and compete against our competitors, we must continue to offer high-quality content, especially popular original content that provides our users with a superior online entertainment experience. To this end, we must continue to produce new original content and source new talent and producers in a cost effective manner. Given that we operate in a rapidly evolving industry, we must anticipate user preferences and industry trends and respond to such trends in a timely and effective manner.

***Ability to obtain adequate capital to meet our capital needs***

 ****

The operation of an internet video streaming content provider and producer of television shows requires significant and continuous investment in content production or acquisition and video production technology. Producing high-quality original content is costly and time-consuming and typically requires a long period of time in order to realize a return on investment, if at all.

***Ability to provide our users with compelling content choices***

 ****

In addition to our content production for television shows, we have experienced significant user growth for our mobile and on-line video and e-commerce products over the past several years. Our ability to continue to retain users and attract new users will depend in part on our ability to consistently provide our users with compelling content choices, as well as a quality experience for selecting and viewing video content.

***Ability to maintain and enhance our brand***

We believe that maintaining and enhancing our brand is of significant importance to the success of our business. Our well-recognized brand is critical to increasing our user base and, in turn, expanding our shoppers for our e-commerce platform and attractiveness to advertising customers and content providers. Since the internet video industry is highly competitive, maintaining and enhancing our brand depends largely on our ability to become and remain a market leader in China, which may be difficult and expensive to accomplish.

**Segment information**

We have two operating segments, namely CHEERS App Internet Business and Traditional Media Businesses. Our CHEERS App Internet Business generates advertising revenue from broadcasting IP short videos, live streaming and APP advertising through our CHEERS App and service revenue from our Cheers E-mall marketplace. Our Traditional Media Business mainly contributes to the advertising revenue from our Cheers TV-series, copyright revenue, customized content production revenue and others. The table below measures the performance of each segment based on metrics of revenues and earnings from operations and uses these results to evaluate the performance of, and to allocate resources to, each of the segments.

---

| | | |
|:---|:---|:---|
|  | ****For the Six Months<br> Ended June 30,***<br> ***(In U.S. dollars in thousands)**** | ****For the Six Months<br> Ended June 30,***<br> ***(In U.S. dollars in thousands)**** |
|  | **2025** | **2024** |
| Net revenues: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | $65497 | $61506 |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | 5496 | 9549 |
| Total consolidated net revenues | 70993 | 71055 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | (54655) | (50926) |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | (4585) | (7906) |
| Total segment operating expenses | (59240) | (58832) |
| Operating income: |  |  |
| &nbsp;&nbsp;&nbsp;Cheers APPs Internet Business | 10842 | 10580 |
| &nbsp;&nbsp;&nbsp;Traditional Media Business | 911 | 1643 |
| Total segment operating income | 11753 | 12223 |
| Unallocated item \* | (3429) | (584) |
| Total consolidated operating income | $8324 | $11639 |

---

\* The unallocated item for the six months ended June 30, 2025 and 2024 presents the share-based compensation for employees, which is not allocated to segments.

**A. <u>Operating Results</u>**

The following table summarizes our consolidated results of operations in absolute amount and as a percentage of our total net revenues for the periods indicated. Period-to-period comparisons of historical results of operations should not be relied upon as indicative of future performance. The numbers are expressed in U.S. dollars in thousands, except for percentages.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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,** | | |
|  | ***In U.S. dollars in thousands*** | ***In U.S. dollars in thousands*** | ***In U.S. dollars in thousands*** | ***In U.S. dollars in thousands*** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
|  | **US$** | **%** | **US$** | **%** | **US$** | **%** |
| **Revenues** | 70993 | 100.00 | 71055 | 100.00 | (62) | (0.09) |
| Operating expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenues | (20772) | (29.26) | (18885) | (26.58) | (1887) | 9.99 |
| &nbsp;&nbsp;&nbsp;Selling and marketing | (35321) | (49.75) | (37559) | (52.86) | 2238 | (5.96) |
| &nbsp;&nbsp;&nbsp;General and administrative | (4243) | (5.98) | (1611) | (2.27) | (2632) | 163.38 |
| &nbsp;&nbsp;&nbsp;Research and development | (2333) | (3.29) | (1361) | (1.92) | (972) | 71.42 |
| **Total operating expenses** | **(62669)** | **(88.28)** | **(59416)** | **(83.63)** | **(3253)** | **5.47** |
| **Income from operations** | **8324** | **11.72** | **11639** | **16.37** | **(3315)** | **(28.48)** |
| Total other (expenses) income, net | (572) | (0.81) | 200 | 0.28 | (772) | (386.00) |
| **Income before income taxes** | **7752** | **10.91** | **11839** | **16.65** | **(4087)** | **(34.52)** |
| Income tax benefits | 4 | 0.01 | 578 | 0.81 | (574) | (99.31) |
| **Net income** | **7756** | **10.92** | **12417** | **17.46** | **(4661)** | **(37.54)** |

---

*Revenues*

For the six months ended June 30, 2025 and 2024, we primarily generated revenues from two revenue streams: advertising and CHEERS e-Mall market service. For the six months ended June 30, 2025 and 2024, 99.9% and 99.7% of our revenue derived from advertising services.

Our revenues kept stable at approximately $71.0 million and $71.1 million for the six months ended June 30, 2025 and 2024, respectively. The change in revenues was mainly caused by (i) a decrease of approximately $0.1 million in CHEERS e-Mall market service due to decreased transaction volume facilitated on our marketplace which was primarily affected by diversified online shopping models like livestream shopping, and (ii) a decrease of approximately $0.1 million in other revenues from customized content production due to increasing competition in this area, partially net off against an increase of approximately $0.1 million in advertising revenues as more advertising orders were placed by our customers.

We expect to further expand our customers base with our efforts to enhance brand recognition and user traffic generation, leading to more exposure and high popularity of our Apps.

 *Operating expenses*

Operating expenses consists of cost of revenues, selling and marketing, general and administrative and research and development expense.

Cost of revenues consists primarily of production cost of TV series, short stream video, live stream and network drama, labor cost and related benefits, payments to various channel owners for broadcast, purchase cost of goods and copyrights and costs associated with the operation of our online game and shopping platform CHEERS App such as bandwidth cost and amortization of intangible assets. Our cost of revenues increased by approximately $1.9 million, or 9.99%, from approximately $18.9 million for the six months ended June 30, 2024 to approximately $20.8 million for the six months ended June 30, 2025. The increase in cost of revenues was attributable to the increase in revenues generated from advertising revenues. However our gross margin decreased which was primarily due to decrease in the service fees charged to our advertising customers. We expect to achieve a further increase in advertising revenues with our continuous investment in advertising business. However, it may take time to make further investments before we generate revenues.

Our sales and marketing expenses primarily consist of salaries and benefits of sales department, user acquisition expense, advertising fee, travelling expense and CHEERS e-Mall marketing expense. Our sales and marketing expenses decreased by approximately $2.3 million, to approximately $35.3 million for the six months ended June 30, 2025 from approximately $37.6 million for the six months ended June 30, 2024. The decrease was mainly due to a decrease in promotion service charge because we reduced cost in marketing and promotion as we believe we have gained reputation among our target customers.

Our general and administrative expenses consist primarily of salaries and benefits for members of our management and bad debt provision expense for accounts receivable and professional service fees. Our general and administrative expenses increased from approximately $1.6 million for the six months ended June 30, 2024 to approximately $4.2 million for the six months ended June 30, 2025. The increase in general and administrative expenses was mainly attributable to an increase of approximately $2.8 million in share-based compensation expenses because we granted 1,350,000 restricted shares to certain employees in the six months ended June 30, 2025, as compared with 231,909 restricted shares to certain employees in the six months ended June 30, 2024.

Our research and development expenses consist primarily of salaries and benefits for our research and development department. Research and development expenses for the six months ended June 30, 2025 and 2024 were approximately $2.3 million and approximately $1.4 million, respectively. Such increase was primarily due to the continued investment in the IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies.

*Income tax benefits*

Income tax benefits for the six months ended June 30, 2025 and 2024 were approximately $4,000 and $0.6 million, respectively, arising from allowance for expected credit losses of accounts receivable and allowance for prepayments. The decrease in deferred tax benefits was primarily because we reversed of certain credit losses of accounts receivable in the six months ended June 30, 2025.

*Net Income*

As a result of the foregoing, we had reported a net income of US$7.8 million and US$12.4 million, respectively, for the six months ended June 30, 2025 and 2024.

**B. <u>Liquidity and Capital Resources</u>**

As of June 30, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents of approximately $203.2 million and $197.7 million, respectively. Working capital as of June 30, 2025 was approximately $284.5 million. 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 and capital expenditures for the next 12 months. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Substantially all of our cash and cash equivalents as of June 30, 2025 were held in China, of which all are denominated in Renminbi (RMB). In addition, we are a holding company with no material operations of our own. We conduct our operations primarily through our subsidiaries and VIEs in China. As a result, our ability to pay dividends, if any, depends upon dividends paid by our wholly-owned subsidiaries. We do not anticipate to pay any dividends in the future as any net income earned will be reinvested in the Company. In addition, our WFOE is permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, our WFOE and each of its consolidated entities is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the SAFE. We currently plan to reinvest all earnings from our WFOE to business development and do not plan to request dividend distributions from the WFOE.

If we experience an adverse operating environment or incurred anticipated capital expenditure requirement, or if we accelerate our growth, then additional financing may be required. No assurance can be given, however, that the additional financing, if required, would be on favorable terms or available at all. Such financing may include the use of additional debt or the sale or additional securities. Any financing, which involves the sale of equity securities or instruments that are convertible into equity securities, could result in immediate and possibly significant dilutions to our existing shareholders.

**Cash Flows**

The following table summarizes our cash flows for the periods indicated. The numbers are expressed in U.S. dollars in thousands, except for percentages.

---

| | | |
|:---|:---|:---|
|  | ****For the Six Months Ended<br> June 30,***<br> ***(In U.S. dollars in thousands)**** | ****For the Six Months Ended<br> June 30,***<br> ***(In U.S. dollars in thousands)**** |
|  | **2025** | **2024** |
| Net cash provided by (used in) operating activities | $3920 | $(6741) |
| Net cash (used in) provided by financing activities | (2116) | 2972 |
| Effect of exchange rate changes | 3764 | (4376) |
| Net increase (decrease) in cash and cash equivalents | 5568 | (8145) |
| Cash and cash equivalents, at beginning of period | 197660 | 194525 |
| Cash and cash equivalents, at end of period | $203228 | 186380 |

---

We primarily fund our operations from our net revenues, bank loans and equity financing through private placements. During the six months ended June 30, 2025, our account receivables increased by approximately $7.7 million. We intend to continue focusing on timelier collections of account receivable which should enhance our cash flows. We anticipate that the major capital expenditure in the near future is for the further enhancement of our CHEERS App. For the six months ended June 30, 2025, our prepayments and other current assets increased by approximately $3.2 million, which was primarily caused by changes in prepayments to our vendors for customer acquisition.

 

To enhance its proposed growth, we anticipate raising capital through the issuance of equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

 

*Operating Activities* 

 

Net cash provided by in operating activities was approximately $3.9 million for the six months ended June 30, 2025, derived mainly from (i) net income of approximately $7.8 million for the six months ended June 30, 2025 adjusted for depreciation and amortization expenses of approximately $3.2 million and share-based compensation expenses of approximately $3.4 million, and (ii) net changes in our operating assets and liabilities, principally comprising of an increase of approximately $7.7 million in accounts receivable due to delayed payments from one customer, an increase of approximately $3.3 million in prepayments to our vendors because we increased our purchase of content production which required of repayments, a decrease of approximately $0.6 million in accounts payables as we improved our payment process, and an increase of approximately $1.1 million in other tax payable.

Net cash used in operating activities was approximately $6.7 million for the six months ended June 30, 2024, derived mainly from (i) net income of approximately $12.4 million for the six months ended June 30, 2024 adjusted for depreciation and amortization expenses of approximately $1.7 million and deferred tax benefits of approximately $0.6 million, and (ii) net changes in our operating assets and liabilities, principally comprising of an increase of approximately $17.8 million in prepayments to our vendors because we increased our purchase of content production which required of repayments, a decrease of approximately $6.9 million in accounts payables as we improved our payment process, and an increase of approximately $4.4 million in other tax payable with increase in revenues.

*Investing Activities* 

For the six months ended June 30, 2025 and 2024, we did not report cash provided by or used in investing activities.

*Financing Activities*

Net cash used in financing activities was approximately $2.1 million for the six months ended June 30, 2025, which was primarily derived from repayment of bank loans of approximately $9.7 million, partially net off by proceeds of approximately $7.6 million from bank loans.

Net cash provided by financing activities was approximately $3.0 million for the six months ended June 30, 2024, which was primarily derived from proceeds of approximately $7.1 million from bank loans, loans of approximately $0.2 million from a related party, partially net off by a repayment of bank loans of approximately $4.2 million.

Please refer to "Notes to Unaudited Condensed Consolidated Financial Statements—Note 9. Bank Loans" for the details of loan terms and interest rates.

**Off-Balance Sheet Arrangements.**

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's 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 interests 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.

**C. <u>Research and development</u>**

We have a team of experienced engineers who are primarily based at our headquarters in Beijing. We compete aggressively for engineering talent and work closely with top IT firms through outsourcing to address challenges such as AI recommended search engine, block chain scoring e-mall, network games battle platform, data warehouse, social networking E-commence V3.0, video media warehouse. For the six months ended June 30, 2025 and 2024, our research and development expenditures were approximately $2.3 million and $1.4 million, respectively. In addition, intangible asset was approximately $38.8 million and $40.5 million as of June 30, 2025 and December 31, 2024, respectively. For the six months ended June 30, 2025, we acquired intangible assets of approximately $0.7 million through settlement of prepayments. We plan to continue investing in and improving our CHEERS App to further increase user friendliness, functionality and efficiency.

**D. <u>Trend information</u>**

See "A. Operating Results" of this Operating And Financial Review And Prospects and "Item 3.D. Key Information—Risk Factors" of 2024 Form 20-F.

**E. <u>Critical Accounting Estimates</u>**

We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgments, estimates and assumptions. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and various assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. You should read the following description of critical accounting policies, judgments and estimates in conjunction with our unaudited condensed consolidated financial statements and other disclosures included in this report.

A list of critical accounting policies, judgements and estimates that are relevant to us is included in note 2 of our unaudited condensed consolidated financial statements included elsewhere in this report.

**Recently issued accounting pronouncements**

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

**<u>Statement Regarding Unaudited Financial Information</u>**

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company's year-end financial statements, which could result in significant differences from this unaudited financial information.

## Exhibit 99.3

**Exhibit 99.3**

**Cheer Holding Issues Correction to 2025 Half Year Results**

BEIJING, August 6, 2025 (GLOBE NEWSWIRE) -- Cheer Holding, Inc. (NASDAQ: CHR) ("Cheer Holding" or the "Company"), a leading provider of advanced mobile internet infrastructure and platform services, issues a correction to it prior press release dated July 30, 2025 regarding its financial results for the six months ended June 30, 2025.

**Financial Highlights for the Six Months Ended June 30, 2025**

**Key Financial Metrics**

● Revenues reached $71.0 million.

● Net Income reached $7.8 million.

● Net cash provided by operating activities was approximately $3.9 million.

**Segment Revenues**

● Revenue from CHEERS App Internet Business reached $65.5 million, accounting for 92.26% of total revenues.

● Revenue from Cheers Traditional Media Business reached $5.5 million, accounting for 7.74% of total revenues.

**Operating Highlights for the Six Months Ended June 30, 2025**

**CHEERS Video**

● Accumulated downloads of CHEERS Video grew by 1.85% YoY to approximately 440 million as of June 30, 2025.

● Monthly Active Users of CHEERS Video increased by 0.02% YoY to approximately 51.1 million.

● Daily Time Spent on CHEERS Video was approximately 54.3 minutes.

**CHEERS e-Mall**

● Accumulated downloads of CHEERS e-Mall grew by 16.07% YoY to 70.4 million as of June 30, 2025.

● Monthly Active Users of CHEERS e-Mall increased by 0.44% YoY to approximately 6.9 million.

● Repurchase Rate on CHEERS e-Mall was 38.8%.

**CHEERS Telepathy**

● Accumulated downloads of CHEERS Telepathy were approximately 14.1 million as of June 30, 2025.

● Monthly Active Users of CHEERS Telepathy increased by 263.33% YoY to approximately 3.3 million.

● Monthly Visits increased by 14.25% YoY to approximately 3.8 million.

**CHEERS API**

● Number of API increased by 9.8% YoY to 101 for the six months ended June 30, 2025.

● Daily Active Integrations increased by 46.9% YoY to more than 470,000.

**Selected Financial Results**

*Revenues*

Revenues remained stable at approximately $71.0 million and $71.1 million, respectively for the six months ended June 30, 2025 and 2024. Advertising services were the Company's primary revenue driver, accounting for 99.9% and 99.7% of total revenue in these periods. This marginal change was primarily due to: (i) a decrease of approximately $0.1 million in CHEERS e-Mall market service revenue, influenced by the rise of diversified online shopping models like livestream shopping; and (ii) a decrease of approximately $0.1 million in other revenues from customized content production, stemming from increased competition. These reductions were largely offset by an approximately $0.1 million increase in advertising revenues, driven by a higher volume of advertising orders. The Company expects to further expand its customer base by enhancing brand recognition and user traffic, aiming for increased exposure and popularity of its Apps.

*Operating Expenses*

 

Operating expenses consist of cost of revenues, selling and marketing, general and administrative, and research and development expenses.

● Cost of Revenues increased by approximately $1.9 million, or 9.99%, to $20.8 million for the six months ended June 30, 2025, from approximately $18.9 million in the prior year. This increase was attributable to higher advertising revenues. However, the Company's gross margin decreased primarily due to a reduction in service fees charged to advertising customers. The Company anticipates further increases in advertising revenues through continuous investment in its advertising business.

● Sales and Marketing Expenses decreased by approximately $2.3 million to $35.3 million for the six months ended June 30, 2025, from approximately $37.6 million in the prior year. This decline was mainly due to reduced promotion service charges, as the Company has scaled back marketing and promotion costs, believing it has gained a strong reputation among its target customers.

● General and Administrative Expenses increased from approximately $1.6 million for the six months ended June 30, 2024, to approximately $4.2 million for the six months ended June 30, 2025. This increase was primarily attributable to an approximately $2.8 million increase in share-based compensation expenses, as the Company incurred higher expenses for the six months ended June 30, 2025 from a restricted share grant in January 2025 as compared with a restricted share grant in June 2024.

● Research and Development Expenses were approximately $2.3 million and $1.4 million for the six months ended June 30, 2025 and 2024, respectively. This increase primarily reflects continued investment in IT infrastructure, user-friendliness upgrades, and the ongoing implementation of content-driven strategies.

*Net Income*

As a result, the Company reported a net income of $7.8 million for the six months ended June 30, 2025, compared to $12.4 million for the six months ended June 30, 2024.

*Cash, cash equivalents and working capital*

The Company's principal sources of liquidity were cash and cash equivalents of approximately $203.2 million and $197.7 million, respectively, as of June 30, 2025 and December 31, 2024. Working capital as of June 30, 2025 was approximately $284.5 million.

**About Cheer Holding, Inc.**

As a preeminent provider of next-generation mobile internet infrastructure and platform services in China, Cheer Holding is dedicated to building a digital ecosystem that integrates "platforms, applications, technology, and industry" into a cohesive digital eco-system, thereby creating a new, open business environment for web3.0 that leverages AI technology. The Company is developing a 5G+VR+AR+AI shared universe space that builds on cutting-edge technologies including blockchain, cloud computing, extended reality, and digital twin.

Cheer Holding's portfolio includes a wide range of products and services, such as CHEERS Telepathy, CHEERS Video, CHEERS e-Mall, CHEERS Open Data, CheerReal, CheerCar, CheerChat, Polaris Intelligent Cloud, AI-animated short drama series, short video matrix, variety show series, Livestreaming, and more. These offerings provide diverse application scenarios that seamlessly blend "online/offline" and "virtual/reality" elements.

With "CHEERS+" at the core of Cheer Holding's digital ecosystem, the Company is committed to utilizing innovative product applications and technologies to drive its long-term sustainable and scalable growth.

For more information, please visit http://ir.gsmg.co/.

**Safe Harbor Statement**

Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company's ability to continue successful development and launch of its metaverse experience centers, AI initiatives and technology infrastructure; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment and technological developments, competition, changes in regulation, or other economic and policy factors; disruptions or other business interruptions that may affect the operations of our products and services, the possibility that the Company's new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company's latest Annual Report on Form 20-F filed with the SEC on March 10, 2025. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

**For investor and media inquiries, please contact:**

Wealth Financial Services LLC

Connie Kang, Partner

Email: ckang@wealthfsllc.com

Tel: +86 1381 185 7742 (CN)

**CHEER HOLDING, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(In U.S. dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30,**<br> **2025** | **As of<br> December 31,**<br> **2024** |
|  | **(unaudited)** | |
| **Assets** | | |
| **Current assets:** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $203228 | $197660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 86238 | 77074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment and other current assets, net | 34072 | 30834 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **323538** | **305568** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 18 | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 38784 | 40531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets | 77 | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unamortized produced content, net | 16 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 316 | 371 |
| &nbsp;&nbsp;&nbsp;**Total non-current assets** | **39211** | **41023** |
| &nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $**362749** | $**346591** |
| &nbsp;&nbsp;&nbsp;**Liabilities and Equity** |  |  |
| &nbsp;&nbsp;&nbsp;**Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term bank loans | $7678 | $9590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1479 | 2039 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 31 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | 1986 | 1941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 1100 | 1100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other taxes payable | 26661 | 25095 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities current | 107 | 109 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **39042** | **39901** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term bank loan | 1396 | 1370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities non-current | 120 | 250 |
| &nbsp;&nbsp;&nbsp;**Total non-current liabilities** | **1516** | **1620** |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES** | $**40558** | $**41521** |
| &nbsp;&nbsp;&nbsp;**Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred shares (par value of $0.0001 per share; 2,000,000 shares authorized as of June 30, 2025 and December 31, 2024; nil and nil shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A Ordinary shares (par value of $0.001 per share; 500,000,000 and 200,000,000 shares authorized as of June 30, 2025 and December 31, 2024; 11,635,568 and 10,285,568 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) | 11 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Ordinary shares (par value of $0.001 per share; 500,000 shares and 500,000 shares authorized as of June 30, 2025 and December 31, 2024; 500,000 and 500,000 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 116913 | 113485 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory reserve | 1411 | 1411 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 214883 | 207128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (11107) | (17041) |
| &nbsp;&nbsp;&nbsp;**TOTAL CHEER HOLDING, INC SHAREHOLDERS' EQUITY** | **322111** | **304993** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest | 80 | 77 |
| &nbsp;&nbsp;&nbsp;**TOTAL EQUITY** | **322191** | **305070** |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND EQUITY** | $**362749** | $**346591** |

---

**CHEER HOLDING, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND**

**COMPREHENSIVE INCOME**

**(In U.S. dollars in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Revenues** | $70993 | $71055 |
| &nbsp;&nbsp;&nbsp;Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenues | (20772) | (18885) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing | (35321) | (37559) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative | (4243) | (1611) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development | (2333) | (1361) |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(62669)** | **(59416)** |
| &nbsp;&nbsp;&nbsp;**Income from operations** | **8324** | **11639** |
| &nbsp;&nbsp;&nbsp;Other income (expenses): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest (expenses) income, net | (61) | 223 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | (511) | (23) |
| &nbsp;&nbsp;&nbsp;**Total other (expenses) income** | **(572)** | **200** |
| &nbsp;&nbsp;&nbsp;**Income before income tax** | **7752** | **11839** |
| &nbsp;&nbsp;&nbsp;Income tax benefits | 4 | 578 |
| &nbsp;&nbsp;&nbsp;**Net income** | **7756** | **12417** |
| &nbsp;&nbsp;&nbsp;Less: net gain attributable to non-controlling interest | 1 | 1 |
| &nbsp;&nbsp;&nbsp;**Net income attributable to Cheer Holding. Inc's shareholders** | $**7755** | $**12416** |
| &nbsp;&nbsp;&nbsp;**Other comprehensive income (loss)** |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency translation income (loss) | 5936 | (6856) |
| &nbsp;&nbsp;&nbsp;Comprehensive income | 13692 | 5561 |
| &nbsp;&nbsp;&nbsp;Less: comprehensive gain (loss) attributable to non-controlling interests | 3 | (1) |
| &nbsp;&nbsp;&nbsp;**Comprehensive income attributable to Cheer Holding. Inc's shareholders** | $**13689** | $**5562** |
| &nbsp;&nbsp;&nbsp;Earnings per ordinary share |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and Diluted\* | $**0.67** | $**1.23** |
| &nbsp;&nbsp;&nbsp;Weighted average shares used in calculating earnings per ordinary share |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and Diluted\* | 11583358 | 10058846 |

---

**CHEER HOLDING, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(In U.S. dollars in thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net cash provided by (used in) operating activities | $3920 | $(6741) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from bank loans | 7583 | 7071 |
| &nbsp;&nbsp;&nbsp;Repayments of bank loans | (9652) | (4242) |
| &nbsp;&nbsp;&nbsp;Payment of loan origination fees | (47) | (58) |
| &nbsp;&nbsp;&nbsp;Borrowings from a related party |  | 205 |
| &nbsp;&nbsp;&nbsp;Withdrawal of contribution from shareholder | - | (4) |
| Net cash (used in) provided by financing activities | (2116) | 2972 |
| Effect of exchange rate changes | 3764 | (4376) |
| Net increase (decrease) in cash and cash equivalents | 5568 | (8145) |
| Cash and cash equivalents, at beginning of period | 197660 | 194525 |
| Cash and cash equivalents, at end of period | $203228 | 186380 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Interests paid | $250 | $199 |
| &nbsp;&nbsp;&nbsp;Acquisition of intangible asset from settlement of prepayments | $702 | $- |
| &nbsp;&nbsp;&nbsp;Lease liabilities arising from obtaining right-of-use assets | $- | $466 |

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