# EDGAR Filing Document

**Accession Number:** 0001991592
**File Stem:** 0001213900-25-093083
**Filing Date:** 2025-9
**Character Count:** 163237
**Document Hash:** 0c2a175ee233884bac27b2c84df42f6d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-093083.hdr.sgml**: 20250929

**ACCESSION NUMBER**: 0001213900-25-093083

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 118

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250929

**DATE AS OF CHANGE**: 20250929

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** INLIF Ltd
- **CENTRAL INDEX KEY:** 0001991592
- **STANDARD INDUSTRIAL CLASSIFICATION:** GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42456
- **FILM NUMBER:** 251356241

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 88, HONGSI ROAD
- **STREET 2:** YANGXI NEW AREA, HONGLAI TOWN
- **CITY:** NAN'AN CITY
- **PROVINCE COUNTRY:** F4
- **ZIP:** 362331
- **BUSINESS PHONE:** 086 15375760760

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 88, HONGSI ROAD
- **STREET 2:** YANGXI NEW AREA, HONGLAI TOWN
- **CITY:** NAN'AN CITY
- **PROVINCE COUNTRY:** F4
- **ZIP:** 362331

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

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934**

For the month of September 2025

**INLIF LIMITED**

(Exact name of registrant as specified in its charter)

**No. 88, Hongsi Road**

**Yangxi New Area, Honglai Town**

**Nan'an City, Quanzhou**

**The People's Republic of China**

(Address of Principal Executive Office)

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

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

**EXPLANATORY NOTE**

INLIF LIMITED, a Cayman Islands exempted company (the "Company") is furnishing this Form 6-K to provide its unaudited condensed consolidated financial statements as of June 30, 2025 and for the six months ended June 30, 2025 and 2024, and incorporate such financial statements into the Company's registration statement referenced below.

On September 29, 2025 (China time), the Company published a press release entitled "*INLIF LIMITED Reports First Half of Fiscal Year 2025 Financial Results*", a copy of which is attached herein as Exhibit 99.3.

This report of foreign private issuer on Form 6-K (excluding the press release attached as Exhibit 99.3 hereto) is hereby incorporated by reference into the registration statement on [Form S-8](https://www.sec.gov/Archives/edgar/data/1991592/000121390025031083/ea0237747-s8_inlif.htm) of the Company (File Number 333-286485), as amended, and into the prospectus outstanding under the foregoing registration statement, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

**Financial Statements and Exhibits.**

<u>Exhibits</u>:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Condensed Consolidated Financial Statements as of June 30, 2025 and for the Six Months Ended June 30, 2025 and 2024.](ea025825201ex99-1_inlif.htm) |
| 99.2 | [Operating and Financial Review and Prospects in Connection with the Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2025 and 2024.](ea025825201ex99-2_inlif.htm) |
| 99.3 | [Press Release dated September 29, 2025](ea025825201ex99-3_inlif.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 and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **INLIF LIMITED** | **INLIF LIMITED** |
| Date: September 29, 2025 | By: | /s/ Rongjun Xu |
|  |  | Rongjun Xu |
|  |  | Chief Executive Officer |

---

---

| | |
|:---|:---|
| By: | /s/ Yanting Chen |
|  | Yanting Chen |
|  | Chief Financial Officer |

---

## Exhibit 99.1

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

**Exhibit 99.1**

**INLIF LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars, except for the number of shares)**

---

| | |
|:---|:---|
|  | **As of June 30, <br> 2025** |
| **ASSETS** | |
| **CURRENT ASSETS:** | |
| Cash and cash equivalents | $1715784 |
| Accounts receivable, net | 7141688 |
| Inventories | 3662699 |
| Deferred offering costs |  |
| Prepayments and other current assets | 4638000 |
| Amounts due from related parties | 2089 |
| **TOTAL CURRENT ASSETS** | $**17160260**  |
| **NON-CURRENT ASSETS:** |  |
| Property, plant, and equipment, net | $3487572 |
| Land-use rights, net | 2146880 |
| Intangible assets, net | 41979 |
| Finance lease assets | 111202 |
| Deferred tax assets | 6991 |
| **TOTAL NON-CURRENT ASSETS** | $**5794624** |
| **TOTAL ASSETS** | $**22954884** |
| **LIABILITIES** |  |
| **CURRENT LIABILITIES:** |  |
| Accounts payable | $1726132 |
| Bank loans | 4578703 |
| Contract liabilities |  |
| Accrued expenses and other payables | 471883 |
| Warranty liabilities | 46080 |
| Income taxes payable | 8906 |
| Amounts due to related parties | 169812 |
| Current finance lease liabilities | 58925 |
| **TOTAL CURRENT LIABILITIES** | $**7060441** |
| **NON-CURRENT LIABILIT:** |  |
| Finance lease liabilities | $42946 |
| **TOTAL NON-CURRENT LIABILITY** | $**42946** |
| **TOTAL LIABILITIES** | $**7103387** |
| **COMMITMENTS AND CONTINGENCIES (NOTE 19)** |  |
| **SHAREHOLDERS' EQUITY** |  |
| Class A Ordinary Share, $0.0001 par value, 350,000,000 shares authorized; 3,400,000 shares issued and outstanding\* | $340 |
| Class B Ordinary Share, $0.0001 par value, 150,000,000 shares authorized; 12,500,000 shares issued and outstanding\* | 1250 |
| Additional paid-in capital | 14378738 |
| Statutory reserve | 361083 |
| Retained earnings | 1226398 |
| Accumulated other comprehensive loss | (116312) |
| **TOTAL SHAREHOLDERS' EQUITY** | $**15851497** |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $**22954884** |

---

\* The shares are presented on a retrospective basis.

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

**INLIF LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2025** | **2024** |
| **Revenue** | $**10270988** | $**6735689** |
| Cost of revenue | (8473079) | (5021704) |
| **Gross profit** | **1797909** | **1713985** |
| **Operating expenses:** |  |  |
| Selling expenses | (412056) | (481822) |
| General and administrative expenses | (2682433) | (458358) |
| Research and development expenses | (770713) | (618137) |
| Total operating expenses | (3865202) | (1558317) |
| **Operating (loss) income** | **(2067293)** | **155668** |
| **Other income (expenses):** |  |  |
| Interest income | 135574 | 1186 |
| Interest expenses | (94780) | (91740) |
| Other income, net | 19810 | 344341 |
| Other expenses, net | (4272) | (1831) |
| Exchange gain | 33838 | 280 |
| Total other expenses, net | 90170 | 252236 |
| **(Loss)** Income before income tax** | **(1977123)** | **407904** |
| Income tax benefits (expenses) | 1703 | (17823) |
| **Net (loss) income** | $**(1975420)** | $**390081** |
| **Comprehensive income (loss)** |  |  |
| **Net (loss) income** | $**(1975420)** | $**390081** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments, net of tax | 218808 | (218837) |
| **Comprehensive (loss) income** | $**(1756612)** | $**171244** |
| Earnings per share, basic and diluted | $(0.13) | $0.03 |
| Weighted average number of shares | 14787293 | 12500000 |

---

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

**INLIF LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Class A Ordinary Shares (US$0.0001 <br> par value)** | **Class B Ordinary Shares (US$0.0001 <br> par value)** | **Class B Ordinary Shares (US$0.0001 <br> par value)** | |
|  | **Shares\*** | **Shares\*** | **Amount** | **Statutory**<br>**Reserve** |
|  | | $ | **$** | **$** |
| **Balance as of December 31, 2023** | **—** | **12500000** | $**1250** | $**200229)** |
| Net income |  |  |  |  |
| Appropriated statutory surplus reserves |  |  |  | 39067) |
| Foreign currency translation adjustment |  |  |  | —) |
| **Balance, June 30, 2024** | **—** | **12500000** | $**1250** | $**239296)** |
| **Balance, December 31, 2024** | **—** | **12500000** | $**1250** | $**361083)** |
| Share issuance upon the initial public offering | 2000000 |  |  |  |
| Net loss |  |  |  | —) |
| Share-based compensation | 1400000 |  |  |  |
| Offering cost incurred for initial public offering) |  |  |  |  |
| Foreign currency translation adjustment |  |  |  |  |
| **Balance as of June 30, 2025** | **3400000** | **12500000** | $**1250** | $**361083)** |

---

\* The shares are presented on a retrospective basis.

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

**INLIF LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net (loss) income | $(1975420) | $390081 |
| Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |
| Share-based compensation | 1764000 |  |
| Depreciation and amortization | 141432 | 184531 |
| Bad debt reversal | (2333) | (2767) |
| Amortization of finance lease right of use assets | 868 |  |
| Deferred tax assets | (1822) | 415 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | (3299235) | 131004 |
| Inventories | 1637759 | 392025 |
| Prepayments and other current assets | (78431) | 8224 |
| Accounts payable | (1406480) | (1219751) |
| Interest expense on finance lease liabilities | 541 |  |
| Contract liabilities | (1712) | (58344) |
| Accrued expenses and other payables | 281237 | (134076) |
| Warranty liabilities | 14478 |  |
| Income taxes payable | (18430) | 14599 |
| Net cash used in operating activities | (2943548) | (294059) |
| Cash flows from investing activities: |  |  |
| Purchase of property, plant, and equipment | (618796) | (5743) |
| Loans to related parties | (1070) |  |
| Loan to a third party | (4400000) |  |
| Net cash used in investing activities | (5019866) | (5743) |
| Cash flows from financing activities: |  |  |
| Issuance of ordinary shares, net of offering costs | 7060133 |  |
| Principal payments on finance lease liabilities | (10741) |  |
| Proceeds from short-term loans | 3196717 | 3548186 |
| Repayment of short-term loans | (3336311) | (2217616) |
| Deferred offering costs |  | (202380) |
| Amount financed from related parties |  | 572422 |
| Amount repaid to related parties |  | (226943) |
| Net cash provided by financing activities | 6909798 | 1473669 |
| Effect of exchange rate changes | 301762 | (176010) |
| Net (decrease) increase in cash | (751854) | 997857 |
| Cash and cash equivalents at beginning of the period | 2467638 | 598933 |
| Cash and cash equivalents at end of the period | $1715784 | $1596790 |
| Supplemental disclosures of cash flows information: |  |  |
| Cash paid for income taxes | 15326 | 340 |
| Cash paid for interest expense | 94780 | 95869 |
| Supplementary disclosure of non-cash information: |  |  |
| Right of use assets obtained in exchange for finance lease liabilities | 112071 |  |

---

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

**INLIF LIMITED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in U.S. Dollars, except for the number of shares)**

**Note 1. Organization and principal activities**

INLIF Limited (the "Company") is a holding company incorporated under the laws of the Cayman Islands on January 4, 2023. The Company owns 100% of the equity interests in Yunfei Enterprise Limited ("Yunfei BVI"), a company incorporated under the laws of the British Virgin Islands on January 30, 2023. Yunfei BVI owned 100% of the equity interests in Juli Enterprise Limited ("Juli HK"), a company incorporated under the laws of Hong Kong, the People's Republic of China (the "PRC" or "China"), on March 8, 2023.

Juli HK owns 100% of the equity interests in Fujian INLIF Technology Co., Ltd ("Fujian INLIF"), a company incorporated in the PRC on April 21, 2023. Fujian INLIF is a wholly foreign-owned entity. Fujian INLIF owns 94% of the equity interests in Ewatt Robot Equipment Co., Ltd. ("Ewatt"), a company incorporated in the PRC on September 28, 2016.

Fanqi Enterprise Limited ("Fanqi HK"), a company incorporated under the laws of Hong Kong, China, on December 30, 2022, owns 6% of the equity interests in Ewatt, and Fanqi HK is 100% owned by Yunfei BVI.

Prior to the reorganization of Ewatt, Ewatt was 40% owned by Mr. Wenzao Huang, 40% owned by Mr. Xiaolong Chen and 20% owned by Mr. Yunjun Huang on incorporation.

Ewatt owned 100% of the equity interests in Suzhou Ewatt Intelligent Equipment Co., Ltd ("Suzhou Ewatt"), a company incorporated in the PRC on December 20, 2020, which was dissolved on December 20, 2022.

On February 6, 2023, the three individual shareholders (Mr. Wenzao Huang, Mr. Xiaolong Chen, and Mr. Yunjun Huang) of Ewatt agreed to transfer 11.75% and 1% the equity interests of Ewatt to Mr. Jinliang Xu and Fanqi HK, respectively. All shareholders agreed with Fanqi HK acquiring additional 5% equity interests of Ewatt on June 16, 2023.

The five shareholders of Ewatt became the shareholders of the Company on September 6, 2023, and these shareholders owns 100% of the equity interests in the Company (the "Controlling Shareholders").

Since the Company and its subsidiaries are effectively controlled by the same Controlling Shareholders, they are considered under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

Upon completion of the reorganizations mentioned above, the Company has subsidiaries in countries and jurisdictions including the PRC, Hong Kong, the Cayman Islands, and the British Virgin Islands. Details of the Company and the subsidiaries of the Company are set out below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Entity** | **Date of <br> Incorporation** | **Place of <br> Incorporation** | **% of <br> Ownership** | **Principal Activities** |
| The Company | January 4, 2023 | Cayman | Parent | Holding company |
| Yunfei BVI | January 30, 2023 | BVI | 100 | Holding company |
| Juli HK | March 8, 2023 | Hong Kong, China | 100 | Holding company |
| Fanqi HK | December 30, 2022 | Hong Kong, China | 100 | Holding company |
| Fujian INLIF | April 21, 2023 | Nan'an, China | 100 | Holding company |
| Ewatt | September 28, 2016 | Nan'an, China | 100 | Producing and selling manipulator arms and accessories |

---

**Note 2. Summary of significant accounting policies**

 ****

***Basis of presentation***

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (the "U.S. GAAP").

 ****

***Principles of consolidation***

The consolidated financial statements of the Company reflect the principal activities of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated upon consolidation.

A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

 ****

***Use of estimates***

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, allowances for expected credit losses, estimates for inventory provisions, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.

 ****

***Foreign currency translation and transaction***

The functional and reporting currency of the Company is the United States Dollar ("US$"). The Company's operating subsidiary in China uses Renminbi ("RMB") as the functional currency.

The financial statements of the Company and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in shareholders' equity. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). 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.

For the Company, except for the shareholders' equity, the balance sheet accounts on June 30, 2025 and December 31, 2024 were translated at RMB7.1636 to $1.00 and RMB7.2993 to $1.00, respectively. The shareholders' equity accounts were translated at their historical rate. The average translation rates applied to statements of operations for the six months ended June 30, 2025 and 2024 were RMB7.2526 to $1.00 and RMB7.2150 to $1.00, respectively. Cash flows were also translated at average translation rates for the periods. Therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

 ****

***Cash and cash equivalents***

Cash and cash equivalents consist of cash on hand, deposits with banks, and other monetary funds. The Company maintains cash and cash equivalents with various financial institutions primarily in China. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. As of June 30, 2025 and December 31, 2024, cash and cash equivalents balances were $1,715,784 and $2,467,638, respectively. The majority of the Company's cash is saved in state-owned banks in the PRC and Hong Kong, and part of deposits are covered by insurance. In China, a depositor has up to RMB500,000 ($69,797) insured by the People's Bank of China Financial Stability Bureau. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

 ****

***Accounts receivable, net***

Accounts receivables are recorded at the gross billing amount less allowance for expected credit losses from the customers. Accounts receivable does not bear interest.

Since January 1, 2020, 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. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. 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, including contract assets.

The Company maintains an allowance for credit losses in accordance with ASC Topic 326, *Credit Losses* ("ASC 326") and records the allowance for credit losses as an offset to accounts receivable and contract assets, and the estimated credit losses charged to the allowance in the combined statements of operations and comprehensive income (loss). The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business lines, services or product offerings and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances and contract assets 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 customer.

For the period ended June 30, 2025 and year ended December 31, 2024, the Company's expected credit losses against accounts receivable were $528 and $2,861, respectively.

 ****

***Inventories***

Inventories, primarily consisting of raw materials, finished goods, goods shipped in transit, and work in progress, is stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined by using weighted average cost method. Allowances for obsolescence are also assessed based on expiration dates, as applicable, taking into consideration historical and expected future product sales.

 ****

***Prepayment and other current assets***

Prepayment and other current assets primarily consist of prepayments made to vendors or service providers for future services that have not been provided, other current assets, and other receivable from third parties. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. Management believes that, as of June 30, 2025 and December 31, 2024, the Company's other current assets were not impaired.

 ****

***Property, plant and equipment, net***

Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated<br> useful lives** |
| Building | 30 years |
| Office Equipment | 5 years |
| Electronic equipment | 3 to 5 years |
| Vehicles | 4 years |
| Machinery Equipment | 10 years |
| Building Improvement | 10 years |

---

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive income (loss). Expenditures for maintenance and repairs are charged to expenses as incurred, while additions, renewals, and betterments, which are expected to extend the useful life of assets, are capitalized.

 ****

***Construction in progress***

Construction in progress is comprised primarily of two new buildings designated for manufacturing purposes. They will be reclassified from construction in process to buildings within property, plant, and equipment once they are fully equipped and available for use.

 ****

***Land use rights, net***

Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use the parcels of land for specified periods of time. These land use rights are sometimes referred to informally as "ownership." Land use rights are stated at cost less accumulated amortization. The estimated useful life for land use right is 50 years and the rental period is from November 15, 2019 to November 15, 2069.

 ****

***Intangible assets, net***

The Company's intangible assets with definite useful lives primarily are purchased patents. The Company amortizes intangible assets with definite useful lives on a straight-line basis over estimated useful lives of ten years.

 ****

***Finance Lease as a lessee***

The Company, through its subsidiary, leases equipment and accounts for such leases in accordance with ASC 842, *Leases* ("ASC 842"). A lease is classified as a finance lease if it transfers ownership of the underlying asset to the Company at the end of the lease term or otherwise meets the criteria set forth in ASC 842. The Company's equipment lease agreements are classified as finance leases because the Company is reasonably certain to exercise the purchase option at the end of the lease term.

Lease liabilities are recognized at the present value of fixed lease payments. Finance lease assets are initially measured at cost, which equals the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, and reduced by any lease incentives received. Because the Company is reasonably certain to exercise the purchase option and ownership of the underlying assets will transfer to the Company, finance lease assets are amortized on a straight-line basis over the estimated useful lives of the underlying assets. The lease liability is subsequently measured using the effective interest method, increased by interest expense and reduced by lease payments made. The principal portion of lease payments is classified as a financing cash outflow, and the interest portion is classified as an operating cash outflow in the statement of cash flows. Interest expense on the lease liability is recognized using the effective interest method and the amortization expense is reported as "General and administrative expenses".

Finance lease assets are reviewed for impairment annually. No impairment of finance lease assets was identified as of June 30, 2025.

 **

***Warranty liabilities***

 **

The Company generally provides limited warranties for work performed under its contracts. At the time a sale is recognized, the Company records estimated future warranty costs under FASB ASC 460, "Guarantees". Such estimated costs for warranties are estimated at completion and these warranties are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranties are based on actual warranty experience or the Company's best estimate.

 ****

***Fair value measurement***

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The carrying amounts reported in the balance sheets of cash, accounts receivable, inventory and other current assets, due from related parties, value added tax ("VAT") recoverables, short-term bank loans, accounts payable, amounts due to related parties, accrued expenses and other liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company did not have any non-financial assets or liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024.

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***Related party transactions***

A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the Company's securities (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature.

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***Revenue recognition***

Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company's customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation. VAT that the Company collects concurrent with revenue-producing activities is excluded from revenue.

The Company follows the requirements of Topic 606-10-55-36 through -40, *Revenue from Contracts with Customers, Principal Agent Considerations*, in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a customer. Revenue recorded with the Company acting in the capacity of a principal is reported on a gross basis equal to the full amount of consideration to which we expect in exchange for the good or service transferred. Revenue recorded with the Company acting in the capacity of an agent is reported on a net basis, exclusive of any consideration provided to the principal party in the transaction.

The Company accounts for the revenue generated from sales of its products (injection molding machine-dedicated manipulator arms, accessories of manipulator arms, raw materials and scraps of manipulator arms) and services (installation and warranty services) on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods or services.

For the six months ended June 30, 2025 and 2024, there was no revenue recognized on a net basis where the Company is acting as an agent.

The Company's revenue is primarily derived from the following sources:

 

*<u>Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services</u>*

The Company generates revenue from the sales of standard and customized manipulator arms (product) to customers. The Company enters into contracts with customers as a principal. The contracts contain three performance obligations for domestic customers, including transferring the product to the customers, offering installation and warranty services in exchange for consideration. For oversea customers, there is one single performance obligation, which is transferring the product to their customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. Usually, the Company offers a credit term within 120 days for business customers with good creditworthiness. The Company recognizes revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been delivered to the customers and the customers have accepted it in accordance with the sales contract. In the normal course of business, the Company's products are sold with no right of return unless the item is defective. The Company generally provides one-year warranty services against defects in materials and workmanship for its customers.

 

*<u>Revenue from sales of accessories of manipulator arms</u>*

The Company generates revenue from the sales of manipulator arm accessories. The customer base includes both direct purchasers from the Company, as well as those who procure the Company's manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the control of the manipulator arm accessories has been transferred to customers. The transfer of control is considered complete when manipulator arm accessories have been received by customers. In the normal course of business, the Company's manipulator arm accessories are sold with no right of return.

 

 

*<u>Revenue from sales of raw materials and scraps of manipulator arms</u>*

The Company generates revenue from the sales of raw materials and scraps of manipulator arms. The customer base includes both direct purchasers from the Company, as well as those who procure the Company's manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering raw materials and scraps of manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the control of the manipulator arm raw materials and scraps have been transferred to customers. The transfer of control is considered complete when manipulator arm raw materials and scraps have been received by customers. In the normal course of business, the Company's manipulator arm raw materials and scraps are sold with no right of return.

 

*<u>Revenue from installation services</u>*

The Company generates revenue from providing the installation services to customers who acquire manipulator arms and accessories through third parties. The contracts contain one single performance obligation, which is installing the manipulator arms specified by the customer in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the Company has fulfilled its obligation of installing manipulator arms and the customer has accepted them, with no further obligations remaining on either party.

 

*<u>Contract Assets and Liabilities</u>*

Payment terms are established on the Company's pre-established credit requirements based upon an evaluation of customers' credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of June 30, 2025 and December 31, 2024, other than accounts receivables, advances from customers and contract liabilities, the Company had no other material contract assets, or deferred contract costs recorded on its consolidated balance sheet.

 

*<u>Revenue disaggregation</u>*

Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard. Revenue under the segment reporting standard is measured on the same basis as under the revenue standard. The Company's disaggregation of revenue for the six months ended June 30, 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30** | **For the six months ended<br> June 30** |
|  | **2025** | **2024** |
| Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services | $4373031 | $3346127 |
| Revenue from sales of accessories of manipulator arms | 386603 | 1045007 |
| Revenue from sales of raw materials and scraps of manipulator arms | 5469831 | 2257191 |
| Revenue from installation services | 41523 | 87364 |
| **Total revenue** | $**10270988** | $**6735689** |

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***Segment reporting***

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

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's CODM for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company's CODM has been identified as the chief executive officer (the "CEO"), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. Management has determined that the Company has one operating and reportable segment, which is the manipulator arms business. The Company's operations are managed as a single segment within the PRC. As substantially all of the Company's long-lived assets are located in the PRC and the majority of its revenues are generated from the PRC, no geographical segment information is presented.

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***Cost of revenue***

Cost of revenue consists primarily of (i) cost of manipulator arms and installation service and warranty service, (ii) cost of accessories for manipulator arms, (iii) cost of raw materials and scraps for manipulator arms, and (iv) cost of installation services.

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***Selling expenses***

Selling expenses include (i) sales service costs incurred from provision of customer services, (ii) traveling costs of sales and marketing staff, (iii) salaries and benefits of sales and marketing staff, (iv) advertising costs, and (v) others, such as conference costs.

Advertising costs, which consist primarily of offline advertising related costs, are expensed as incurred and amounted to $52,203 and $134,692 for the six months ended June 30, 2025 and 2024, respectively.

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***Research and development expenses***

The Company expenses all internal research and development costs as incurred, which primarily comprise costs of materials used for experiments, employee costs, and other daily expenses related to research and development activities.

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***Government grants***

Government grants represent cash subsidies received from the local government in the PRC. Cash subsidies which have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized when received. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business.

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***Employee benefits***

Full-time employees of the Operating Entity in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund, and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The Company has made employee benefits contributions under PRC government requirements and has no legal obligation beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $31,560 and $20,940 for the six months ended June 30, 2025 and 2024, respectively.

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***Deferred offering costs***

The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin ("SAB") Topic 5A —"Expenses of Offering." Deferred offering costs consist of underwriting, legal, and other expenses directly attributable to the IPO and incurred through its completion. These costs were charged to shareholders' equity upon the completion of the IPO on January 3, 2025. As of June 30, 2025, $2,422,425 of deferred offering costs were charged to shareholders' equity.

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***Statutory reserves***

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable "statutory surplus reserve fund." Subject to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (the "PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the "reserve fund." For foreign invested enterprises, the annual appropriation for the "reserve fund" cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under the PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss.

As of June 30, 2025 and December 31, 2024, the balance of the required statutory reserves was $361,083 and $361,083, respectively.

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***VAT***

Revenue represents the invoiced value of goods and services, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of products sold or service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company's subsidiaries in PRC remain subject to examination by the tax authorities for five years from the date of filing.

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***Income taxes***

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes" prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company believes there were no uncertain tax positions on June 30, 2025 and December 31, 2024.

The Company's affiliated entities in the PRC are subject to examination by the relevant tax authorities. 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. As of June 30, 2025, the tax years for the Company's affiliated entities in the PRC remain open for statutory examination by PRC tax authorities. There were no ongoing examinations by tax authorities as of June 30, 2025 and December 31, 2024.

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***Comprehensive income (loss)***

Comprehensive income (loss) is defined as the increase in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Amongst other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company's comprehensive income (loss) included net income and foreign currency translation adjustments that are presented in the consolidated statements of comprehensive income (loss).

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***Earnings (loss) per share***

The Company computes earnings (loss) per share ("EPS") in accordance with ASC 260, "Earnings per Share" ("ASC 260"). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. As of June 30, 2025 and December 31, 2024, there was no dilution impact.

Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders, including the redeemable shares, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of June 30, 2025 and December 31, 2024, there were no dilutive shares.

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***Risks and uncertainties***

 

*<u>Concentration of credit risks</u>*

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and accounts receivable. As of June 30, 2025 and December 31, 2024, the aggregate amounts of cash of $1,715,784 and $2,467,638, respectively, were deposited at major financial institutions located in the PRC and Hong Kong. In the event of bankruptcy of one of these financial institutions, the Company may not be able to claim its cash and demand deposits back in full. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions.

Accounts receivables are typically unsecured and derived from revenue earned from customers in the PRC, which are exposed to credit risk. The risk is mitigated by credit evaluations. The Company maintains an allowance for doubtful accounts, and actual losses have generally been within management's expectations. Refer to "Note 18. Customer and Supplier Concentrations" for detail.

 

*<u>Currency convertibility risk</u>*

Substantially all of the Company's operating activities are settled in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People's Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China. Approval of foreign currency payments by the People's Bank of China or other regulatory institutions requires submitting a payment application form together with supporting documents.

 

*<u>Liquidity risk</u>*

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

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***Recent accounting pronouncements***

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued and has evaluated all other pronouncements.

In March 2024, the FASB issued ASU 2024-01, "Compensation-Stock Compensation (Topic 718): Scope Application of Profits Interest and similar Awards" For public business entities, the amendments in this Update are effective for annual periods beginning after December 15.2024，and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods, Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. if an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period.

In March 2024, the FASB issued ASU 2024-02, "Codification Improvements — Amendments to Remove References to the Concepts Statements". This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The amendments in this ASU are intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to financial statements, all relevant expense captions presented on the face of the income statement in continuing operations into the purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact the adoption of ASU 2024-03 will have on its combined financial statements and related disclosures.

In April 2025, the FASB issued ASU 2025-04 – Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy election for awards granted to customers (unless granted in exchange for a distinct good or service), and clarifies applicability of the variable consideration constraint. The ASU will be effective for annual reporting periods (including interim periods within annual reporting periods) beginning after December 15, 2026, for all entities. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this Update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material effect on the Company's financial position, result of operations, or cash flows.

**Note 3. Cash and cash equivalents**

Cash and cash equivalents consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Cash on hand | $1270 | $491 |
| Deposits with banks | 1714514 | 2467147 |
| **Cash and cash equivalents** | $**1715784** | $**2467638** |

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The Company had a total of $1,715,784 and $2,467,638 in cash and cash equivalents as of June 30, 2025 and December 31, 2024, all held within the PRC and Hong Kong.

**Note 4. Accounts receivable, net**

Accounts receivable, net, consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Accounts receivable-third parties | $7136451 | $3842981 |
| Accounts receivable-related parties | 5765 |  |
| Less: allowance for credit losses | (528) | (2861) |
| **Accounts receivable, net** | $**7141688** | $**3840120** |

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For the six months ended June 30, 2025 and year ended December 31, 2024, the Company recorded allowance for credit losses of third parties for $528 and $2,861, respectively.

The Company subsequently collected outstanding accounts receivable balance of $2,207,417 for the six months ended June 30, 2025 as of the date of this report.

Changes of allowance for credit losses are as follows:

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| | | |
|:---|:---|:---|
|  | **For the <br> six months <br> ended <br> June 30, <br> 2025** | **For the <br> fiscal year <br> ended <br> December 31, <br> 2024** |
| Beginning balance | $2861 | $3015 |
| Reversal of allowance for credit losses | (2333) | (154) |
| **Ending balance** | $**528** | $**2861** |

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**Note 5. Inventories**

Inventories consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Raw materials | $3384477 | $4095069 |
| Finished goods | 90669 | 497010 |
| Goods shipped in transit |  | 595723 |
| Working in processing | 187553 | 112656 |
| **Total inventories** | $**3662699** | $**5300458** |

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For the six months ended June 30, 2025 and year ended December 31, 2024, the Company recorded no impairment provision of inventories for lower of cost or net realizable value, respectively.

**Note 6. Prepayments and other current assets**

Prepayments and other current assets consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Prepaid expenses to purchase raw materials | $31316 | $28359 |
| Prepaid consulting fee | 13959 | 78090 |
| Other current assets |  | 12839 |
| Loans to a third party\* | 4400000 |  |
| Interest receivable\* | 133525 |  |
| Other receivables |  | 10614 |
| Other prepayments | 59200 | 29668 |
| **Prepayments and other current assets** | $**4638000** | $**159570** |

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\* In January 2025, the Company provided two loans to a third party with an aggregate principal amount of $4,400,000. The loans bear interest at an annual rate of 6.30% and mature in one year, with both principal and interest due at maturity.

For the six months ended June 30, 2025 and year ended December 31, 2024, the Company recorded no allowance for other receivable.

**Note 7. Property, plant and equipment, net**

Property, plant and equipment, net consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Building | $2786773 | 2734965 |
| Office Equipment | 194693 | 191073 |
| Electronic Equipment | 212953 | 203588 |
| Vehicles | 242350 | 224023 |
| Machinery Equipment | 480128 | 471202 |
| Building Improvement | 1276565 | 809045 |
| Construction in progress | 44137 | 6152 |
| **Subtotal** | $**5237599** | $**4640048** |
| Less: accumulated depreciation | (1750027) | (1602736) |
| **Total** | $**3487572** | $**3037312** |

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As of June 30, 2025 and December 31, 2024, the buildings have been pledged for the purpose of obtaining bank loans.

Depreciation expenses for the six months ended June 30, 2025 and 2024 amounted to $115,496 and $158,459, respectively.

For the six months ended June 30, 2025, the depreciation expenses included in the cost of sales, general and administrative expenses, selling expenses, and research and development expenses were approximately $35,995, $73,976, $2,311, and $3,214, respectively.

For the six months ended June 30, 2024, the depreciation expenses included in the cost of sales, general and administrative expenses, selling expenses, and research and development expenses were approximately $36,135, $119,000, $1,723 and $1,601, respectively.

**Note 8. Land-use rights, net**

Land-use rights, net, consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Land-use rights | $2363538 | $2319598 |
| Less: accumulated amortization | (216658) | (189434) |
| **Land-use rights, net** | $**2146880** | $**2130164** |

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As of June 30, 2025 and December 31, 2024, the land-use rights have been pledged for the purpose of obtaining bank loans.

Amortization expenses were $23,345 and $23,467 for the six months ended June 30, 2025 and 2024, respectively.

For the six months ended June 30, 2025, the amortization expenses included in the cost of sales and general and administrative expenses were approximately $4,711 and $18,634, respectively.

For the six months ended June 30, 2024, the amortization expenses included in the cost of sales and general and administrative expenses were approximately $4,748 and $18,719, respectively.

Estimated future amortization expenses are as follows:

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| | |
|:---|:---|
|  | **Amortization <br> expenses** |
| Fiscal year 2025 | $46690 |
| Fiscal year 2026 | 46690 |
| Fiscal year 2027 | 46690 |
| Fiscal year 2028 | 46690 |
| Fiscal year 2029 | 46690 |
| Thereafter | 1913430 |
| **Total** | $**2146880** |

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**Note 9. Intangible assets, net**

Intangible assets, net, consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Patents | $52474 | $51498 |
| Less: accumulated amortization | (10495) | (7725) |
| **Intangible assets, net** | $**41979** | $**43773** |

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Amortization expenses included in general and administrative expenses were $2,591 and $2,605 for the six months ended June 30, 2025 and 2024, respectively.

Estimated future amortization expenses are as follows:

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| | |
|:---|:---|
|  | **Amortization <br> expenses** |
| Fiscal year 2026 | $5182 |
| Fiscal year 2027 | 5182 |
| Fiscal year 2028 | 5182 |
| Fiscal year 2029 | 5182 |
| Fiscal year 2030 | 5182 |
| Thereafter | 16069 |
| **Total** | $**41979** |

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**Note 10. Accounts payable**

Accounts payable consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31,<br> 2024** |
| Accounts payable to Third parties | 1726132 | 3132613 |
| **Total accounts payable** | $**1726132** | $**3132613** |

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**Note 11. Short-term bank loans**

Short-term bank loans consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Fujian Rural Commercial Bank | $418784 | $410998 |
| Industrial and Commercial Bank of China | 4159919 | 4082584 |
| China Merchants Bank |  | 136999 |
| **Total short-term bank loans** | $**4578703** | $**4630581** |

---

As of June 30, 2025, a total of $4,159,919 bank loan was pledged by land-use rights and buildings owned by Ewatt and guaranteed by Wenzao Huang, Baohua Xu, Yunjun Huang and Zhaoxia Chen. A total of $418,784 of bank loans was guaranteed by Wenzao Huang, Baohua Xu, Jinliang Xu, Xiaolong Chen and Yunjun Huang. Guarantors Wenzao Huang, Jinliang Xu, Xiaolong Chen and Yunjun Huang are related parties of the Company. The interest is paid on a monthly basis and the principal is repaid in full at maturity.

Short-term loans as of June 30, 2025 consisted of following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of June 30, 2025 Secured <br> short-term bank loans** | **Loan <br> commencement <br> date** | **Loan <br> maturity <br> date** | **Loan <br> amount <br> in RMB** | **Loan <br> amount <br> in USD** | **Effective <br> interest <br> rate** |
| Industrial and Commercial Bank of China | December 13, 2024 | November 19, 2025 | 6000000 | $837567 | 4.20% |
| Industrial and Commercial Bank of China | May 30, 2025 | December 17, 2025 | 9900000 | 1381987 | 4.20% |
| Industrial and Commercial Bank of China | September 9, 2024 | August 8, 2025 | 6900000 | 963203 | 4.20% |
| Industrial and Commercial Bank of China | May 21, 2025 | May 7, 2026 | 7000000 | 977162 | 4.20% |
| Fujian Rural Commercial Bank | August 21, 2024 | August 20, 2025 | 3000000 | 418784 | 4.95% |
| **Total secured short-term bank loans as of June 30, 2025** |  |  | **32800000** | $**4578703** |  |

---

Short-term loans as of December 31, 2024 consisted of following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of December 31, 2024 Secured <br> short-term bank loans** | **Loan <br> commencement <br> date** | **Loan <br> maturity <br> date** | **Loan <br> amount <br> in RMB** | **Loan <br> amount <br> in USD** | **Effective <br> interest <br> rate** |
| Industrial and Commercial Bank of China | December 13, 2024 | November 19, 2025 | 6000000 | $821998 | 4.20% |
| Industrial and Commercial Bank of China | November 7, 2024 | June 6, 2025 | 9900000 | 1356294 | 4.20% |
| Industrial and Commercial Bank of China | September 9, 2024 | August 8, 2025 | 6900000 | 945296 | 4.20% |
| Industrial and Commercial Bank of China | May 29, 2024 | May 22, 2025 | 7000000 | 958996 | 4.20% |
| Fujian Rural Commercial Bank | August 21, 2024 | August 20, 2025 | 3000000 | 410998 | 4.95% |
| China Merchants Bank | January 30, 2024 | January 29, 2025 | 1000000 | 136999 | 4.83% |
| **Total secured short-term bank loans as of December 31, 2024** |  |  | **33800000** | $**4630581** |  |

---

**Note 12. Contract liabilities**

Contract liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Advance from customers | $— | $1712 |
| **Total contract liabilities** | $**—**  | $**1712** |

---

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Balance at the beginning of the period | $1712 | $65703 |
| Cash received in advance |  | 18288 |
| Revenue recognized from opening balance of deferred revenue | (1712) | (65703) |
| Revenue recognized from contract liabilities arising during the period |  | (11559) |
| **Balance at the end of the period** | $— | $**6729** |

---

**Note 13. Accrued expenses and other payables**

Accrued expenses consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Payroll payable | $173465 | $135599 |
| Other payables | 298418 | 55046 |
| **Total accrued expenses and other payables** | $**471883** | $**190645** |

---

Other payables mainly consist of VAT payable and other taxes payable.

**Note 14. Warranty liabilities**

Warranty liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Warranty liabilities | 46080 | 31602 |
| **Total warranty liabilities** | $**46080** | $**31602** |

---

**Note 15. Finance leases as lessee**

In May 2025, the Company entered into a machinery equipment lease agreement. The total lease term is 2 years and has been classified as a finance lease because the Company is reasonably certain to exercise the purchase option and ownership of the underlying assets will transfer to the Company.

The Company's lease agreement do not provide a readily determinable implicit rate nor is it available to the Company from its lessor. Instead, the Company estimates its incremental borrowing rate based on interest rates published by the People's Bank of China in order to discount lease payments to present value. The weighted average discount rate of the Company's finance leases was 3.00% per annum as of June 30, 2025.

Amounts recognized in the combined balance sheet:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Finance lease assets | $111202 | $&nbsp;&nbsp;&nbsp;&nbsp; — |
| Lease liabilities, current | 58925 |  |
| Lease liabilities, non-current | 42946 |  |
| **Total lease liabilities** | $**101871** | $— |

---

A summary of lease cost is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Amortization of finance lease assets | $868 | $— |
| Interest of lease liabilities | 541 |  |

---

The following table presents maturity of lease liabilities as of June 30, 2025:

---

| | |
|:---|:---|
|  | **Minimum <br> lease payment** |
| Six months ended December 31, 2025 | $32243 |
| Fiscal year 2026 | 57320 |
| Fiscal year 2027 | 15096 |
| Less: imputed interest | (2788) |
| **Present value of finance lease liabilities** | $**101871** |

---

The following summarizes other supplemental information about the Company's lease as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30, <br> 2025** | **As of<br> December 31, <br> 2024** |
| Weighted average discount rate | 3.00% |  |
| Weighted average remaining lease term | 1.82 years |  |

---

**Note 16. Income taxes**

The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled.

 ****

***Cayman Islands and BVI***

The Company is incorporated in the Cayman Islands and Yunfei BVI is incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands and the BVI.

 ****

***Hong Kong***

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to 2,000,000 Hong Kong dollars, and 16.5% on any part of assessable profits over 2,000,000 Hong Kong dollars.

 ****

***PRC***

Generally, under the Enterprise Income Tax ("EIT") Law of PRC, PRC enterprises are subject to a uniform 25% enterprise income tax rate, while preferential tax rates, tax holidays, and tax exemptions may be granted on a case-by-case basis.

In addition, the EIT law grants preferential tax treatment to a High and New Technology Enterprise ("HNTE"), if the enterprise meets the requirements by local government and maintains the HNTE status by re-applying every three years. Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%.

For the six months ended June 30, 2025 and 2024, Ewatt was eligible for a reduced income tax rate of 15% as an HNTE.

The provision for income tax consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30** | **For the six months ended <br> June 30** |
|  | **2025** | **2024** |
| Current income tax expenses | $— | $17415 |
| Deferred income tax expenses (benefits) | (1703) | 408 |
| **Total income tax expenses (benefits)** | $**(1703)** | $**17823** |

---

The following table sets forth reconciliation between the statutory earned income tax rate and the effective income tax:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Income (loss) before income tax expenses | $(1977123) | $407904 |
| Income tax computed at statutory EIT rate (25%) |  | 102124 |
| Tax effect of preferential tax treatments |  | (40849) |
| Effect of research and development credits |  | (92721) |
| Effect of other non-deductible expenses |  | 48861 |
| **Current income tax expenses** | $— | $**17415** |
| Tax effect of deferred tax recognized | (1703) | 408 |
| **Total income tax expenses (benefits)** | $**(1703)** | $**17823** |

---

The significant components of deferred tax assets were as following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Deferred tax assets | $6991 | $5169 |
| **Total deferred tax assets** | $**6991** | $**5169** |

---

The Company's taxes payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Income tax payable | $8906 | $27337 |
| Other tax payables | 38478 | 39056 |
| **Total tax payable** | $**47384** | $**66393** |

---

Other tax payables mainly consist of VAT payable, city construction tax payable, property tax and land use tax payable, stamp tax payable, and education fund payable.

 ****

***Uncertain tax positions***

The PRC tax authorities conduct periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. In general, the PRC tax authorities have up to five years to conduct examinations of the tax filings of the Company's PRC entities. It is therefore uncertain as to whether the PRC tax authorities may take different views about the Company's tax filings, which may lead to additional tax liabilities. The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2025 and December 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.

**Note 17. Equity**

 

*<u>Ordinary Shares</u>*

On January 3, 2025, the Company consummated its initial public offering on the Nasdaq Capital Market of 2,000,000 ordinary shares at a public offering price of US$4.00 per share.

On May 22, 2025, the Company granted an aggregate of 1,400,000 ordinary shares to certain employees under its share-based compensation plan.

On June 9, 2025, the Company passed the shareholder resolutions and board resolutions to re-designate and re-classify its authorized share capital into (i) 350,000,000 Class A Ordinary Shares, each with a par value of US$0.0001 and carrying 1 vote per share, and (ii) 150,000,000 Class B Ordinary Shares, each with a par value of US$0.0001 and carrying 20 votes per share, replacing the previous authorization of 500,000,000 Ordinary Shares.

Save and except for voting rights and conversion rights, Class A Ordinary Shares and Class B Ordinary Shares shall rank pari passu and shall have the same rights, preferences, privileges and restrictions.

Effective July 31, 2025, the Company re-designated and reclassified its 15,900,000 issued Ordinary Shares into 3,400,000 Class A and 12,500,000 Class B ordinary shares. The re-designation has been accounted for and disclosed in these unaudited condensed consolidated financial statements on a retrospective basis.

The Company's issued and outstanding shares as of June 30, 2025 were as follows::

---

| | | |
|:---|:---|:---|
| **Name of Shareholder** | **Type of shares** | **No. of Shares <br> As of <br> June 30, 2025** |
| LIANKEN ENTERPRISE LIMITED | Class B Ordinary Shares | 4376625 |
| TIANHUA ENTERPRISE LIMITED | Class B Ordinary Shares | 3723750 |
| XINGCAN ENTERPRISE LIMITED | Class B Ordinary Shares | 2255000 |
| WEIBO ENTERPRISE LIMITED | Class B Ordinary Shares | 1394625 |
| Kerui Enterprise Limited | Class B Ordinary Shares | 750000 |
| Shares held by the public shareholders and employees | Class A Ordinary Shares | 3400000 |
| Total: |  | 15900000 |

---

 

*<u>Statutory reserve</u>*

The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with the PRC GAAP.

Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with the PRC GAAP until the reserve is equal to 50% of the entities' registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors of the Company. As of June 30, 2025 and December 31, 2024, the balance of the required statutory reserves was $361,083 and $361,083, respectively.

**Note 18. Restricted net assets**

The Company's ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with the U.S. GAAP differ from those reflected in the statutory financial statements of the PRC entities.

The PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.

As a result of the foregoing restrictions, the PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulations in the PRC may further restrict the PRC entities from transferring funds to the Company in the form of dividends, loans, and advances. As of June 30, 2025 and December 31, 2024, amounts restricted were the paid-in-capital and statutory reserve of the PRC entities, which amounted to $14,741,411 and $7,399,836, respectively.

**Note 19. Customer and Supplier Concentrations**

Significant customers and suppliers are those that account for greater than 10% of the Company's revenue and purchases, respectively.

The Company sold a substantial portion of products to one customer (55.79% of total revenue) during six months ended June 30, 2025. As of June 30, 2025, the amount due from this customer included in accounts receivable was $937,231, representing 13.12% of total accounts receivable.

The Company sold a substantial portion of products to two customers (34.83% and 12.05% of total revenue) during six months ended June 30, 2024. As of June 30, 2024, the amount due from these customers included in accounts receivable was $1,954,710, representing 53.39% of total accounts receivable.

The loss of any significant customers or the failure to attract new customers could have a material adverse effect on the Operating Entity's business, and the Company's consolidated results of operations and financial condition.

For the six months ended June 30, 2025, two suppliers contributed approximately 17.18% and 15.91% of total purchases made by the Company.

For the six months ended June 30, 2024, two suppliers contributed approximately 18.13% and 17.80% of total purchases made by the Company.

The loss of any significant suppliers or the failure to purchase key raw materials could have a material adverse effect on the Operating Entity's business, and the Company's consolidated results of operations and financial condition.

**Note 20. Related party transactions**

1) Nature of relationships with related parties

---

| | |
|:---|:---|
| **Name** | **Relationship with the Company** |
| Wenzao Huang | Director and shareholder of the Company |
| Yunjun Huang | Director and shareholder of the Company |
| Rongjun Xu | CEO of the Company |
| Lihui Xu | Shareholder of the Company |
| Lianken Enterprise Limited ("Lianken") | 100% owned by Wenzao Huang |
| Tianhua Enterprise Limited ("Tianhua") | 100% owned by Xiaolong Chen |
| Xingcan Enterprise Limited ("Xingcan") | 100% owned by Yunjun Huang |
| Weibo Enterprise Limited ("Weibo") | 100% owned by Jinliang Xu |
| Quanzhou Huasen Hardware and Plastic Products Co., Ltd ("Quanzhou Huasen") | 100% owned by Wenzao Huang |
| Dayu Yaodong Hardware and Plastic Products Co., Ltd ("Dayuyaodong") | A member of the board of supervisors of Dayuyaodong is Wenzao Huang |

---

2) Related party balances

---

| | | | |
|:---|:---|:---|:---|
| **Accounts** | **Name of <br> related parties** | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Due to related parties | Wenzao Huang | $160336 | $162034 |
|  | Lihui Xu | 9473 | 24734 |
|  | Rongjun Xu | 3 |  |
| **Due to related parties** |  | $**169812** | $**186768** |

---

---

| | | | |
|:---|:---|:---|:---|
| **Accounts** | **Name of <br> related parties** | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Due from related parties | Lianken | 523 | 258 |
|  | Tianhua | 522 | 258 |
|  | Xingcan | 522 | 257 |
|  | Weibo | 522 | 257 |
| **Due from related parties** |  | $**2089** | $**1030** |

---

3)&nbsp;&nbsp;&nbsp;&nbsp; Related party transactions

For the fiscal six months ended June 30, 2025, the Operating Entity provided loans to related parties. The borrowings were unsecured, due on demand, and interest-free. The following table summarizes the Operating Entity's borrowing transactions with the related parties:

---

| | | |
|:---|:---|:---|
| **Name of related parties** | **Lend from <br> Operating <br> Entity** | **Repaid to <br> Operating <br> Entity** |
| Lianken | $267 | $&nbsp;&nbsp;&nbsp;&nbsp; — |
| Tianhua | 267 |  |
| Xingcan | 268 |  |
| Weibo | 268 |  |
| **Total** | $**1070** | $**—** |

---

For the six months ended June 30, 2024, the related parties provided working capital to support the Operating Entity's operations when needed. The borrowings were unsecured, due on demand, and interest-free. The following table summarizes the Operating Entity's borrowing transactions with the related parties:

---

| | | |
|:---|:---|:---|
| **Name of related parties** | **Lend to <br> Operating <br> Entity** | **Collect from <br> Operating <br> Entity** |
| Wenzao Huang | $225919 | $225919 |
| Yunjun Huang | 346503 |  |
| Lianken |  | 256 |
| Tianhua |  | 256 |
| Xingcan |  | 256 |
| Weibo |  | 256 |
| **Total** | $**572422** | $**226943** |

---

---

| | | | |
|:---|:---|:---|:---|
| **Transaction Types** | **Name of <br> related parties** | **For the <br> six months <br> ended <br> June 30, <br> 2025** | **For the <br> six months <br> ended <br> June 30, <br> 2024** |
| Sales | Quanzhou Huasen | $11592 | $2424 |
|  | Dayuyaodong |  | 1227 |
| **Total** |  | $**11592** | $**3651** |

---

For the six months ended June 30, 2025 and 2024, the Company generated revenue from related parties in the amount of $11,592 and $3,651, respectively.

The following table summarizes the Operating Entity's accounts receivable balance with the related parties:

---

| | | | |
|:---|:---|:---|:---|
| **Accounts** | **Name of <br> related parties** | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| Accounts receivable | Quanzhou Huasen | $5765 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— |
| **Total** |  | $**5765** | $**—** |

---

As of June 30, 2025 and December 31, 2024, the Company's accounts receivable balance from related parties amounted to $5,765 and nil, respectively.

**Note 21. Commitments and Contingencies**

The Company may be involved in certain legal proceedings, claims, and other disputes arising from the commercial operations, projects, employees, and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations, or liquidity.

**Note 22. Subsequent events**

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the SEC. Based on the Company's evaluation, no other event has occurred requiring adjustment or disclosure in the notes to the consolidated financial statements, except the following:

On July 30, 2025, the Board of Directors approved the Company's 2025 Employee Equity Incentive Plan (the "Plan"). The Plan authorizes the issuance of up to 15,000,000 Class A ordinary shares with a par value of US$0.0001 per share. Shares issued under the Plan may consist of authorized but unissued shares, treasury shares, or shares repurchased by the Company in any manner. The purpose of the Plan is to support the Company's long-term growth by attracting, motivating, and retaining key personnel. On August 19, 2025, the Company issued 3,000,000 Class A ordinary shares to five employees pursuant to the Plan.

On July 28, 2025, the Company repaid its loan from the Industrial and Commercial Bank of China in the amount of $2,791,892. On the same date, the Company entered into a new loan agreement with the same bank for $2,791,892, bearing interest at an annual rate of 1.30% and maturing on July 16, 2026.

On August 20, 2025, the Company fully repaid its loan from Fujian Rural Commercial Bank in the amount of $418,784. On the same date, the Company entered into a new loan agreement with Fujian Rural Commercial Bank in the amount of $348,987, bearing interest at an annual rate of 4.95% and maturing on August 29, 2026.

**Note 23. Condensed financial information of the parent company**

Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the Company as the restricted net assets of the Company's PRC subsidiaries exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed financial statements for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the Company's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party.

The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company's consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries. Such investment is presented on the condensed balance sheets as "Investment in subsidiaries" and the respective profit or loss as "Equity in earnings of subsidiaries" on the condensed statements of income.

The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of June 30, 2025 and December 31, 2024, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

 

*<u>Condensed balance sheets</u>*

 

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
| **ASSETS** | | |
| **Current Asset** | | |
| Cash and cash equivalents | $266611 | $1339 |
| **Total current asset** | $**266611** | $**1339** |
| **Non-Current Asset** |  |  |
| Investment in subsidiaries | $15744331 | $10426328 |
| **Total non-current asset** | $**15744331** | $**10426328** |
| **Total Assets** | $**16010942** | $**10427667** |
| **LIABILITY** |  |  |
| **Current Liability** |  |  |
| Amounts due to related parties | $159445 | $161133 |
| **Total current liability** | $**159445** | $**161133** |
| **Total liabilities** | $**159445** | $**161133** |
| **EQUITY** |  |  |
| Class A Ordinary Share, $0.0001 par value, 350,000,000 shares authorized; 3,400,000 shares issued and outstanding\* | 340 |  |
| Class B Ordinary Share, $0.0001 par value, 150,000,000 shares authorized; 12,500,000 shares issued and outstanding\* | 1250 | 1250 |
| Additional paid-in capital | 14378738 | 7037503 |
| Statutory reserve | 361083 | 361083 |
| Retained earnings | 1226398 | 3201818 |
| Accumulated other comprehensive loss | (116312) | (335120) |
| **Total Equity** | $**15851497** | $**10266534** |
| **Total Liabilities and Equity** | $**16010942** | $**10427667** |

---

\* The shares are presented on a retrospective basis.

 

 

*<u>Condensed statements of operations</u>*

 

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended <br> June 30,** | **For the Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| **Operating expenses:** |  |  |
| General and administrative expenses | $(2070341) | $— |
| Interest income | 133554 |  |
| Other expenses | (1949) | (200) |
| Share of income of subsidiaries | (36684) | 390281 |
| **Net (loss) income** | $**(1975420)** | $**390081** |
| **Comprehensive income** |  |  |
| Net (loss) income | $(1975420) | $390081 |
| Foreign currency translation adjustments | 218808 | 218837 |
| **Comprehensive (loss) income** | $**(1756612)** | $**608918** |

---

 

*<u>Condensed statements of cash flows</u>*

---

| | |
|:---|:---|
|  | **For the Six Months Ended <br> June 30,** |
|  | **2025** |
| **Cash Flows from Operating Activities:** |  |
| Net (loss) income | $(1975420) |
| Adjustments to reconcile net income to net cash used in operating activities: |  |
| Equity in earnings of subsidiaries | 36684 |
| **Net Cash Used in Operating Activities** | $(1938736) |
| **Cash Flows from Investing Activity:** |  |
| Loans to third party | $(4533525) |
| **Net Cash Used in Operating Activity** | $(4533525) |
| **Cash Flows from Financing Activity:** |  |
| Issuance of ordinary shares, net of offering costs | $7060133 |
| **Net Cash Provided by Financing Activity** | $**7060133** |
| Effect of exchange rate changes | (322600) |
| **Changes in Cash** | **265272** |
| **Cash, Beginning of Period** | **1339** |
| **Cash, End of Period** | **266611** |

---

## Exhibit 99.2

**Exhibit 99.2**

**OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our unaudited condensed consolidated financial statements and their related notes included in this Form 6-K. This report contains forward-looking statements. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

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

The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 6-K. The operating results in any year are not necessarily indicative of the results that may be expected for any future periods.

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***Six months ended June 30, 2025 compared to six months ended` June 30, 2024***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** | **Changes** | **Changes** |
|  | **2025** | **2024** | **Amount** | **%** |
| **Net revenue** | $**10270988** | $**6735689** | $**3535299** | **52.49%** |
| Cost of revenue | (8473079) | (5021704) | (3451375) | 68.73% |
| **Gross profit** | **1797909** | **1713985** | **83924** | **4.90%** |
| **Operating expenses:** |  |  |  |  |
| Selling expenses | (412056) | (481822) | 69766 | (14.48)% |
| General and administrative expenses | (2682433) | (458358) | (2224075) | 485.23% |
| Research and development expenses | (770713) | (618137) | (152576) | 24.68% |
| **Total operating expenses** | **(3865202)** | **(1558317)** | **(2306885)** | **148.04%** |
|  **(Loss) Income from operations** | **(2067293)** | **155668** | **(2222961)** | **(1428.01)%** |
| **Other income (expenses):** |  |  |  |  |
| Interest income | 135574 | 1186 | 134388 | 11331.20% |
| Interest expenses | (94780) | (91740) | (3040) | 3.31% |
| Exchange gain | 33838 | 280 | 33558 | 11985.00% |
| Bank service fees | (3356) | (1831) | (1525) | 83.29% |
| Non-operating income | 19810 | 344341 | (324531) | (94.25)% |
| Non-operating expenses | (916) |  | (916) |  |
| **Total other income, net** | **90170** | **252236** | **(162066)** | **(64.25)%** |
|  **(Loss) Income before income tax** | **(1977123)** | **407904** | **(2385027)** | **(584.70)%** |
| Income tax benefits (expense) | 1703 | (17823) | 19526 | (109.56)% |
| **Net (loss) income** | $**(1975420)** | $**390081** | $**(2365501)** | **(606.41)%** |

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***Net Revenue***

Our revenue is reported net of all value added taxes ("VAT"). We derive revenue primarily from the sales of manipulator arms, including installation services and warranty services for the manipulator arms sold, and the sales of accessories and raw materials for manipulator arms.

The following table sets forth the breakdown of our revenue by category for the periods indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Changes** | **Changes** |
|  | **Amount** | **%** | **Amount** | **%** | **Amount** | **%** |
| **Revenue:** |  |  |  |  |  |  |
| Manipulator arms and installation and warranty services | $4373031 | 42.58% | $3346127 | 49.68% | $1026904 | 30.69% |
| Accessories | 386603 | 3.76% | 1045007 | 15.51% | (658404) | (63.00)% |
| Raw materials and scraps | 5469831 | 53.26% | 2257191 | 33.51% | 3212640 | 142.33% |
| Installation services | 41523 | 0.40% | 87364 | 1.30% | (45841) | (52.47)% |
| **Total revenue** | $**10270988** | **100.00%** | $**6735689** | **100.00%** | $**3535299** | **52.49%** |

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Compared with net revenue for the six months ended June 30, 2024, our net revenue increased by $3.54 million, or 52.49%, for the six months ended June 30, 2025, which was primarily attributable to (i) an increase in sales of manipulator arms, including installation and warranty services, by approximately $1.03 million; (ii) an increase in sales of raw materials and scraps by approximately $3.21 million. These increases were partially offset by decreases of approximately $0.66 million and $0.05 million in sales of accessories and installation services, respectively, as the increased demand from existing customers for raw materials resulted in lower demand for accessories.

During the six months ended June 30, 2025, our revenue growth was supported by both continued demand from existing customers and the addition of new customers. Capacity expansion in industries such as new energy vehicles, home appliances, and packaging, combined with government incentives for automation and intelligent manufacturing, resulted in increased orders for our manipulator arms. We also participated in several industry exhibitions in Shenzhen, Xiamen, and Wenzhou, through which we obtained more than 450 customer leads and converted approximately 15 into new orders. In addition, we expanded our outreach through online platforms, which helped us connect with overseas distributors. During the period, we introduced product enhancements such as lighter-weight designs, upgraded servo drive systems that reduced cycle times, integration of visual positioning and AI-based defect detection, and improved energy efficiency. These products have been adopted by certain customers and are in use in production lines. Our NASDAQ listing in January 2025 further strengthened brand visibility and market recognition. Revenue from raw materials benefited from the high quality and reliability of our raw materials, which meet customer quality standards and reduce their need for extensive quality inspections.

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***Cost of Revenue***

Our cost of revenue consists primarily of (i) costs of raw materials, such as servo motors and servo systems, linear guides, steel plates, and planetary reducers, (ii) sales tax and additions, and (iii) labor costs, production overhead, and other costs related to the business operation.

The following table sets forth the breakdown of our cost of revenue by category for the periods indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Changes** | **Changes** |
|  | **Amount** | **%** | **Amount** | **%** | **Amount** | **%** |
| **Cost of revenue:** |  |  |  |  |  |  |
| Manipulator arms and installation and warranty services | $3213912 | 37.92% | $2238234 | 44.57% | $975678 | 43.59% |
| Accessories | 320728 | 3.79% | 875794 | 17.44% | (555066) | (63.38)% |
| Raw materials and scraps | 4926993 | 58.15% | 1895671 | 37.75% | 3031322 | 159.91% |
| Installation services | 11446 | 0.14% | 12005 | 0.24% | (559) | (4.66)% |
| **Total cost of revenue** | $**8473079** | **100.00%** | $**5021704** | **100.00%** | $**3451375** | **68.73%** |

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Our cost of revenue increased by 68.73% from approximately $5.02 million for the six months ended June 30, 2024, to approximately $8.47 million for the six months ended June 30, 2025, which was primarily attributable to our business growth and an increase in sales resulting in an increase of costs accordingly.

Revenue increased by 52.49%, while costs rose faster at 68.73%, resulting in a lower gross profit margin. The decline reflects the Company's new lower-pricing strategy, implemented to expand market share, increase sales volume, and drive overall revenue growth.

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

Gross profit represents our revenue less cost of sales. Our gross profit margin represents our gross profit as a percentage of our revenue. For the six months ended June 30, 2025 and 2024, our gross profit was approximately $1.80 million and $1.71 million, respectively, and our gross profit margin was 17.50% and 25.45%, respectively.

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Changes** | **Changes** |
|  | **Gross profit** | **Gross profit <br> margin** | **Gross profit** | **Gross profit <br> margin** | **Gross profit** | **Gross profit** |
|  | **Amount** | **%** | **Amount** | **%** | **Amount** | **%** |
| **Gross profit:** |  |  |  |  |  |  |
| Manipulator arms and installation and warranty services | $1159119 | 26.51% | $1107893 | 33.11% | $51226 | 4.62% |
| Accessories | 65875 | 17.04% | 169213 | 16.19% | (103338) | (61.07)% |
| Raw materials and scraps | 542838 | 9.92% | 361520 | 16.02% | 181318 | 50.15% |
| Installation services | 30077 | 72.43% | 75359 | 86.26% | (45282) | (60.09)% |
| **Total gross profit** | $**1797909** | **17.50%** | $**1713985** | **25.45%** | $**83924** | **4.90%** |

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Compared with the gross profit for the six months ended June 30, 2024, our gross profit increased by approximately $0.08 million, or 4.90%, for the six months ended June 30, 2025, and the gross profit margin decreased from 25.45% to 17.50%, mainly due to (i) an increase in gross profit from sales of manipulator arms, including installation and warranty services, by approximately $0.05 million; (ii) an increase in gross profit from sales of raw materials and scraps by approximately $0.18 million; and (iii) offset by a decrease in gross profit from sales of accessories and installation services by approximately $0.10 million and $0.05 million, respectively.

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***Operating expenses***

The following table sets forth the breakdown of our operating expenses for the six months ended June 30, 2025 and 2024.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | **For the six months ended June 30,** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Changes** | **Changes** |
|  | **Amount** | **% of <br> revenue** | **Amount** | **% of <br> revenue** | **Amount** | **%** |
| Selling expenses | 412056 | 4.01% | 481822 | 7.15% | (69766) | (14.48)% |
| General and administrative expenses | 2682433 | 26.12% | 458358 | 6.80% | 2224075 | 485.23% |
| Research and development expenses | 770713 | 7.50% | 618137 | 9.18% | 152576 | 24.68% |
| **Total operating expenses** | $**3865202** | **37.63%** | $**1558317** | **23.14%** | $**2306885** | **148.04%** |

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***Selling expenses***

Selling expenses mainly consist of (i) salaries and benefits of sales and marketing staff, (ii) traveling costs of sales and marketing staff, (iii) sales commissions, (iv) advertising costs, and (v) other expenses, such as certification fees.

Our selling expenses decreased by 14.48% from approximately $0.48 million for the six months ended June 30, 2024, to $0.41 million for the six months ended June 30, 2025. The decrease was mainly due to (i) a reduction of approximately $0.02 million in entertainment expenses, as customer receptions were held at our own facilities; (ii) a reduction of approximately $0.01 million in travel expenses, mainly due to fewer personnel participating in exhibitions in the first half of 2025 compared with the same period in 2024; and (iii) a decrease of approximately $0.08 million in advertising expenses, as we did not renew our advertising contract upon expiration in 2025.

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***General and administrative expenses***

General and administrative expenses mainly consist of (i) salaries and benefits for the Operating Entity's administrative personnel, (ii) professional fees, which primarily consist of legal, accounting, and consulting fees we paid in connection with our planned public offering, (iii) utilities expenses, which consist of water and electricity charges for administrative purposes, (iv) business and office operation fees, and (v) other expenses, which primarily include expenses of freight, traveling, conferences, and other miscellaneous expenses for administrative purposes.

Our general and administrative expenses increased by 485.23% from approximately $0.46 million for the six months ended June 30, 2024, to $2.68 million for the six months ended June 30, 2025. The increase was mainly due to (i) an increase in staff salaries and benefits by approximately $0.06 million, primarily due to the growth in administrative headcount from 118 in the first half of 2024 to 149 in the first half of 2025; (ii) an increase of share-based compensation expenses by approximately $1.76 million in connection with equity incentives granted to three key administrative employees in the first half of 2025; and (iii) an increase of approximately $0.04 million in expenses related to the Company's internal celebration of its Nasdaq listing.

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***Research and development expenses***

Research and development expenses mainly comprise the costs of materials used for experiments, employee costs, and other daily expenses related to research and development activities.

Our research and development expenses increased by 24.68% from approximately $0.62 million for the six months ended June 30, 2024, to approximately $0.77 million for the six months ended June 30, 2025. The increase was primarily attributable to the expansion of the research and development team, with headcount rising from 141 in the first half of 2024 to 186 in the first half of 2025, resulting in higher personnel costs, as well as increased investment in research activities and related material consumption.

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***Other income (expenses)***

Other income (expenses) primarily consists of (i) government subsidies provided as incentives from the PRC local government to encourage the expansion of local business; (ii) interest income on bank deposits and interest expenses of short-term bank borrowings; and (iii) foreign exchange gains or losses.

Our other income decreased from approximately $0.34 million for the six months ended June 30, 2024, to approximately $0.02 million for the six months ended June 30, 2025, primarily due to a decrease in government subsidy.

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***Income tax expenses***

 

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

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

 

*Hong Kong*

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.

PRC

Generally, under the Enterprise Income Tax Law of PRC, PRC enterprises are subject to a uniform 25% enterprise income tax rate, while preferential tax rates, tax holidays, and tax exemptions may be granted on a case-by-case basis.

In addition, the Enterprise Income Tax Law grants preferential tax treatment to a High and New Technology Enterprise ("HNTE"), if the enterprise meets the requirements by local government and maintains the HNTE status by re-applying every three years. Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%.

For the six months ended June 30, 2025 and 2024, Ewatt was eligible for a reduced income tax rate of 15% as an HNTE.

Our income tax benefit was approximately $1,703 for the six months ended June 30, 2025, compared to the income tax expense of $17,823 for the six months ended June 30, 2024.

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***Net (loss) income***

As a result of the foregoing, primarily due to increased operating expenses as discussed above, we recorded a net loss of approximately $1.98 million for the six months ended June 30, 2025, compared to net income of approximately $0.39 million for the same period in 2024.

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

As of June 30, 2025, we had $1.72 million in cash. Our cash primarily consists of cash in the bank. Our principal source of cash came from our operations and bank loans. Most of our cash resources were used to pay for the raw materials, equipment and property, and operating expenses. Currently, we are working to increase our liquidity and capital sources primarily through cash flows from business operations, debt financing, and financial support from our shareholders. Since our current and anticipated future sources of liquidity are insufficient to fund our future business activities, we may be required to seek additional equity or debt financing. The sales of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations, and the instruments governing such debt could impose operating and financing covenants that could restrict our operations. There can be no assurances that we will be able to raise additional capital. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.

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***Indebtedness.*** As of June 30, 2025, we have short-term bank loans of approximately $4.58 million and finance lease liabilities of approximately $0.10 million. Besides these loans and finance leases, we did not have any other debts, guarantees, or other material contingent liabilities.

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***Off-Balance Sheet Arrangements.*** We do not enter into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. Furthermore, we do not have any retained or contingent interests in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. Moreover, we do not have any variable interests in any unconsolidated entity that we provide financing, liquidity, market risk, or credit support to or engage in hedging or research and development services with us.

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***Capital Resources.*** The primary drivers and material factors impacting our liquidity and capital resources include our ability to generate sufficient cash flows from our operations and renew commercial bank loans, as well as receive proceeds from equity and debt financing, to ensure our future growth and expansion plans.

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***Working Capital.*** Total working capital as of June 30, 2025 amounted to approximately $10.10 million, compared to approximately $5.05 million as of December 31, 2024.

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***Capital Needs.*** Our capital needs include our daily working capital needs and capital needs to finance the expansion of our business. Our management believes that the working capital and income generated from our current operations can satisfy our daily working capital needs for at least the next 12 months. Our daily working capital mainly includes day-to-day operational expenses, such as wages, raw materials, equipment and other operational cash needs. We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary.

**Cash Flows**

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

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| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(2943548) | $(294059) |
| Net cash used in investing activities | (5019866) | (5743) |
| Net cash provided by financing activities | 6909798 | 1473669 |
| Effect of exchange rate changes on cash held in foreign currencies | 301762 | (176010) |
| Net (decrease) increase in cash | (751854) | 997857 |
| Cash at beginning of the period | 2467638 | 598933 |
| Cash at end of the period | $1715784 | $1596790 |

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***Operating activities***

For the six months ended June 30, 2025, our net cash used in operating activities was $2.94 million, which was primarily attributable to (i) an increase of approximately $1.76 million of stock compensation; (ii) an increase of approximately $3.30 million of accounts receivable due to the increase of revenue of and approximately US$3.09 million of revenue was recognized in late June 2025. As of June 30, 2025, the related accounts receivable remained outstanding; and (iii) a decrease of accounts payable by approximately $1.41 million, as purchases of raw materials were relatively lower in the first half of 2025, with increased procurement and inventory stocking expected in the second half.

For the six months ended June 30, 2024, our net cash used in operating activities was $0.29 million, which was primarily attributable to (i) a decrease of approximately $0.13 million of accounts receivable, reflecting the Company's strengthened collection efforts; (ii) a decrease of approximately $0.39 million of inventories, as procurement of raw materials was relatively lower in the first half of the year, with higher purchases and inventory stocking expected in the second half; and (iii) a decrease of accounts payable by approximately $1.22 million, also resulting from lower raw material purchases during the first half of 2024.

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***Investing activities***

For the six months ended June 30, 2025, our net cash used in investing activities was approximately $5.02 million, which was attributable to (i) purchase of property and equipment by approximately $0.62 million; and (ii) an increase of approximately $4.40 million related to loans to a third party, which are expected to be collected in the second half of 2025.

For the six months ended June 30, 2024, our net cash used in investing activities was approximately $5,743, which was attributable to the purchase of property and equipment.

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***Financing activities***

For the six months ended June 30, 2025, our net cash provided by financing activities was $6.91 million, which was attributable to (i) the proceeds of approximately $7.06 million received from initial public offering, net of offering costs; (ii) proceeds of approximately $3.20 million received from short-term bank borrowings; and (iii) repayment of approximately $3.34 million of short-term bank borrowings.

For the six months ended June 30, 2024, our net cash provided by financing activities was $1.47 million, which was attributable to (i) the proceeds of approximately $3.55 million received from short-term bank borrowings; (ii) payments of approximately $0.20 million for deferred offering costs; (iii) repayment of approximately $2.22 million of short-term bank borrowings; (iv) proceeds of approximately $0.57 million received from our related parties; and (v) repayment of approximately $0.23 million to related parties.

**Contractual obligations**

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

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| | | | | |
|:---|:---|:---|:---|:---|
| **Contractual obligations** | **Total** | **Less than <br> 1 year** | **1 to 2<br> years** | **3 to 5<br> years** |
| Short-term bank loans | $4578703 | $4578703 |  |  |
| Finance lease liabilities, including future interest expense | $104659 | $61031 | 43628 |  |

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Short-term loans as of June 30, 2025 consisted of following:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of June 30, 2025 Secured <br> short-term bank loans** | **Loan <br> commencement <br> date** | **Loan <br> maturity <br> date** | **Loan <br> amount <br> in RMB** | **Loan <br> amount <br> in USD** | **Effective <br> interest <br> rate** |
| Industrial and Commercial Bank of China | December 13, 2024 | November 19, 2025 | 6000000 | $837567 | 4.20% |
| Industrial and Commercial Bank of China | May 30, 2025 | December 17, 2025 | 9900000 | 1381987 | 4.20% |
| Industrial and Commercial Bank of China | September 9, 2024 | August 8, 2025 | 6900000 | 963203 | 4.20% |
| Industrial and Commercial Bank of China | May 21, 2025 | May 7, 2026 | 7000000 | 977162 | 4.20% |
| Fujian Rural Commercial Bank | August 21, 2024 | August 20, 2025 | 3000000 | 418784 | 4.95% |
| **Total secured short-term bank loans as of June 30, 2025** |  |  | **32800000** | $**4578703** |  |

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The following table sets forth our contractual obligations as of December 31, 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Contractual obligations** | **Total** | **Less than <br> 1 year** | **1 to 2<br> years** | **3 to 5<br> years** |
| Short-term bank loans | $4630581 | $4630581 | – |  |

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Short-term loans as of December 31, 2024 consisted of following:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2024 Secured <br> short-term bank loans** | **Loan <br> commencement <br> date** | **Loan <br> maturity<br> date** | **Loan <br> amount <br> in RMB** | **Loan <br> amount <br> in USD** | **Effective <br> interest <br> rate** |
| Industrial and Commercial Bank of China | December 13, 2024 | November 19, 2025 | 6000000 | $821998 | 4.20% |
| Industrial and Commercial Bank of China | November 7, 2024 | June 6, 2025 | 9900000 | 1356294 | 4.20% |
| Industrial and Commercial Bank of China | December 9, 2024 | August 8, 2025 | 6900000 | 945296 | 4.20% |
| Industrial and Commercial Bank of China | May 29, 2024 | May 22, 2025 | 7000000 | 958996 | 4.20% |
| Fujian Rural Commercial Bank | August 21, 2024 | August 20, 2025 | 3000000 | 410998 | 4.95% |
| China Merchants Bank | January 30, 2024 | January 29, 2025 | 1000000 | 136999 | 4.83% |
| **Total secured short-term bank loans as of December 31, 2024** |  |  | **33800000** | $**4630581** |  |

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All properties owned by the Operating Entity in the below table are subject to a mortgage with a maturity date of May 7, 2026.

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| | | |
|:---|:---|:---|
| **Description** | **Use** | **Area <br> (Square Feet)** |
| Floor No. 1 of Building No. 1 | Office and Manufacturing Facilities | 18497 |
| Floor No. 1 of Building No. 2 | Office and Manufacturing Facilities | 24918 |
| Floors No. 1 – 7 of Building No. 6 | Office and Manufacturing Facilities | 43813 |
| Floors No. 1 – 8 of Building No. 7 | Office and Manufacturing Facilities | 38900 |

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The following table presents maturity of lease liabilities as of June 30, 2025:

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| | |
|:---|:---|
|  | **Minimum <br> lease<br> payment** |
| Six months ended December 31, 2025 | $32243 |
| Fiscal year 2026 | 57320 |
| Fiscal year 2027 | 15096 |
| Less: imputed interest | (2788) |
| **Present value of finance lease liabilities** | $**101871** |

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

**C. <u>Trend Information</u>**

Other than as disclosed elsewhere in this prospectus, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenue, income from continuing operations, profitability, liquidity, or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

**Off-Balance Sheet Arrangements**

We did not have any off-balance sheet arrangements as of June 30, 2025 and December 31, 2024.

**Inflation**

Inflation does not materially affect our business or the results of our operations.

**Seasonality**

We have not experienced, and do not expect to experience, any seasonal fluctuations in our results of operations for our business.

**D. <u>Critical Accounting Policies and Estimates</u>**

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the unaudited condensed consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable and inventories, useful lives of property, plant and equipment and intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this Form 6-K reflect the more significant judgments and estimates used in preparation of our unaudited condensed consolidated financial statements.

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our unaudited condensed consolidated financial statements:

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***Uses of estimates***

The preparation of financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenue and expenses during the reporting periods. Significant accounting estimates reflected in the Company's unaudited condensed consolidated financial statements include, but are not limited to, inventory reserve provision, useful lives and impairment of long-lived assets, valuation allowance for deferred tax assets, allowance for credit losses, and warranty liabilities of manipulator arms. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.

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***Accounts receivable, net***

Accounts receivable represent the amounts that we have an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for doubtful accounts.

We maintain an allowance for doubtful accounts, which reflects our best estimate of amounts that potentially will not be collected. We determine the allowance for doubtful accounts taking into consideration various factors, including but not limited to, historical collection experience and creditworthiness of the debtors, as well as the age of the individual receivables balance. We establish a provision for doubtful receivables when there is objective evidence that we may not be able to collect amounts due. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income (loss).

 ****

 ****

***Inventories***

Inventory, primarily consisting of raw materials, finished goods, goods shipped in transit, and work in progress, is stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined using first-in-first-out method. Allowances for obsolescence are also assessed based on expiration dates, as applicable, taking into consideration historical and expected future product sales.

 ****

***Revenue recognition***

Under ASC Topic 606 Revenue from Contracts with Customers ("ASC 606"), revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation. VAT that we collect concurrent with revenue-producing activities is excluded from revenue.

We follow the requirements of Topic 606-10-55-36 through -40, *Revenue from Contracts with Customers, Principal Agent Considerations*, in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a customer. Revenue recorded when we are acting in the capacity of a principal is reported on a gross basis, equal to the full amount of consideration to which we expect in exchange for the good or service transferred. Revenue recorded when we are acting in the capacity of an agent is reported on a net basis, exclusive of any consideration provided to the principal party in the transaction.

The principal versus agent evaluation is a matter of judgment that depends on the facts and circumstances of the arrangement and is also dependent on whether we control the good or service before it is transferred to the customer or whether we are acting as an agent of a third party. This evaluation is performed separately for each performance obligation identified. For the periods ended June 30, 2025 and 2024, there was no revenue recognized on a net basis where we are acting as an agent.

Our revenue is primarily derived from the following sources:

 

*<u>Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services</u>*

We generate revenue from sales of standard and customized manipulator arms (product) to customers. We enter into contracts with customers as a principal. The contracts contain three performance obligations for domestic customers, including transferring the product to the customers, offering installation services, and offering warranty services in exchange for consideration. For overseas customers, there is one single performance obligation, which is transferring the product to our customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. Usually, we offer a credit term within 120 days for business customers with good creditworthiness. We recognize revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been accepted and received by customers. In the normal course of business, our products are sold with no right of return unless the item is defective. We generally provide one-year warranty services against defects in materials and workmanship for its customers.

 

*<u>Revenue from sales of accessories of manipulator arms</u>*

We generate revenue from the sales of manipulator arm accessories. The customer base includes both direct purchasers from We, as well as those who procure our manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. We recognize revenue at a point in time when the control of the manipulator arm accessories has been transferred to customers. The transfer of control is considered complete when manipulator arm accessories have been received by customers. In the normal course of business, our manipulator arm accessories are sold with no right of return.

 

 

*<u>Revenue from sales of raw materials and scraps of manipulator arms</u>*

We generate revenue from the sales of raw materials and scraps of manipulator arms. The customer base includes both direct purchasers from us, as well as those who procure our manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering raw materials and scraps of manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. We recognize revenue at a point in time when the control of the manipulator arm raw materials and scraps have been transferred to customers. The transfer of control is considered complete when manipulator arm raw materials and scraps have been received by customers. In the normal course of business, our manipulator arm raw materials and scraps are sold with no right of return.

 

*<u>Revenue from installation services</u>*

We generate revenue from providing the installation services to customers who procure our manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is installing the manipulator arms specified by the customer in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. We recognize revenue at a point in time when we have fulfilled our obligation of installing manipulator arms and the customer has accepted them, with no further obligations remaining on either party.

 

*<u>Contract Assets and Liabilities</u>*

Payment terms are established on our pre-established credit requirements based upon an evaluation of customers' credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of June 30, 2025 and December 31, 2024, other than accounts receivable and advances from customers, we had no other material contract assets, contract liabilities, or deferred contract costs recorded on its consolidated balance sheet.

 

*<u>Revenue disaggregation</u>*

Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard. Revenue under the segment reporting standard is measured on the same basis as under the revenue standard.

Our disaggregation of revenue for the six months ended June 30, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services | $4373031 | $3346127 |
| Revenue from sales of accessories of manipulator arms | 386603 | 1045007 |
| Revenue from sales of raw materials and scraps of manipulator arms | 5469831 | 2257191 |
| Revenue from installation services | 41523 | 87364 |
| Total revenue | $10270988 | $6735689 |

---

 ****

***Income taxes***

We account for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes," prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. We believe there were no uncertain tax positions on June 30, 2025 and December 31, 2024.

Our affiliated entities in the PRC are subject to examination by the relevant tax authorities. 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. As of June 30, 2025, the tax years for our affiliated entities in the PRC remained open for statutory examination by PRC tax authorities. There were no ongoing examinations by tax authorities as of June 30, 2025 and December 31, 2024.

 ****

***Foreign currency translation***

Our functional and reporting currency is the U.S. dollars. Our Operating Entity in China uses Renminbi as the functional currency.

The financial statements of our Company and our subsidiaries are translated into U.S. dollars using the exchange rate as of the balance sheet date for assets and liabilities and the average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in shareholders' equity. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). 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.

For us, except for the shareholders' equity, the balance sheet accounts on June 30, 2025 and December 31, 2024 were translated at RMB7.1636 to $1.00 and RMB7.2672 to $1.00, respectively. The shareholders' equity accounts were translated at their historical rate. The average translation rates applied to statements of operations for the six months ended June 30, 2025 and 2024 were RMB7.2526 to $1.00 and RMB7.2150 to $1.00, respectively. Cash flows were also translated at average translation rates for the periods. Therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

 ****

***Recent accounting pronouncements***

We consider the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued and has evaluated all other pronouncements.

In March 2024, the FASB issued ASU 2024-02, "Codification Improvements — Amendments to Remove References to the Concepts Statements". This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The amendments in this ASU are intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to financial statements, all relevant expense captions presented on the face of the income statement in continuing operations into the purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact the adoption of ASU 2024-03 will have on its combined financial statements and related disclosures.

In April 2025, the FASB issued ASU 2025-04 – Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy election for awards granted to customers (unless granted in exchange for a distinct good or service), and clarifies applicability of the variable consideration constraint. The ASU will be effective for annual reporting periods (including interim periods within annual reporting periods) beginning after December 15, 2026, for all entities. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this Update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material effect on the Company's financial position, result of operations, or cash flows.

## Exhibit 99.3

**Exhibit 99.3**

**INLIF LIMITED Reports First Half of Fiscal Year 2025 Financial Results**

Quanzhou, China, September 29, 2025 -- INLIF LIMITED (Nasdaq: INLF) (the "Company" or "INLIF"), a company engaged in the research, development, manufacturing, and sales of injection molding machine-dedicated manipulator arms, today announced its unaudited financial results for the first half of fiscal year 2025 ended June 30, 2025.

Mr. Rongjun Xu, Chief Executive Officer of INLIF, remarked, "We are pleased to present our financial performance results for the first half of fiscal year 2025, highlighting our continued growth in both revenue and gross profit as compared to the same period in 2024. Driven by the expansion of our customer base and rising demand for manipulator arms, particularly from capacity expansion in industries such as new energy vehicles, home appliances, and packaging, along with government incentives for automation and intelligent manufacturing, our revenue maintained strong momentum, increasing 52.49% year-over-year for the six-month period, while gross profit grew 4.90%.

This performance reflects the success of our proactive expansion strategy, including active sales and marketing initiatives and a strong focus on technological innovation, which have significantly contributed to new customer acquisition and sales growth. During the period, we actively participated in domestic industry exhibitions to attract potential customers and executed expansion initiatives through online platforms to enhance overseas outreach. Specifically, we exhibited in Shenzhen, Xiamen and Wenzhou, generating over 450 qualified leads and converting 15 into new orders.

At the same time, we are committed to continuing our investment in research and development (R&D) to advance our products with more practical and efficient technologies. Furthermore, we believe that our successful initial public offering on Nasdaq has elevated our brand recognition and market visibility.

In parallel, we adhered to a disciplined and balanced cost-control strategy. We tightened control over selling expenses by reducing travel and marketing costs, while improving the efficiency of customer acquisition through hosting receptions at our own facilities and leveraging online platforms more effectively.

Meanwhile, we expanded our administrative headcount and granted share-based compensation to key administrative employees during the period to strengthen our core management team and support future development. While these one-time expenses contributed to a net loss for the current period, we believe they had no material impact on our operations or financial health.

Looking ahead, we remain confident in our preparation and ongoing strategic initiatives for sustained growth and development. We are committed to delivering greater value to our shareholders through our unwavering efforts and dedication."

**First Half of Fiscal Year 2025 Financial Summary**

● Net revenue was $10.27 million for the first half of fiscal year 2025, representing an increase of 52.49% from $6.74 million for the same period of last year.

● Gross profit was $1.80 million for the first half of fiscal year 2025, representing an increase of 4.90% from $1.71 million for the same period of last year.

● Gross profit margin was 17.50% for the first half of fiscal year 2025, compared to 25.45% for the same period of last year.

● Net loss was $1.98 million for the first half of fiscal year 2025, compared to a net income of $0.39 million for the same period of last year.

● Basic and diluted loss per share were $0.13 for the first half of fiscal year 2025, compared to basic and diluted earnings per share of $0.03 for the same period of last year.

**First Half of Fiscal Year 2025 Financial Results**

 ****

***Net Revenue***

Net revenue was $10.27 million for the first half of fiscal year 2025, representing an increase of 52.49% from $6.74 million for the same period of last year. The increase was primarily attributable to (i) an increase in sales of manipulator arms, including installation and warranty services, by approximately $1.03 million; (ii) an increase in sales of raw materials and scraps by approximately $3.21 million. These increases were partially offset by decreases of approximately $0.66 million and $0.05 million in sales of accessories and installation services, respectively, as the increased demand from existing customers for raw materials resulted in lower demand for accessories.

● Sales of manipulator arms and installation and warranty services were $4.37 million for the first half of fiscal year 2025, representing an increase of 30.69% from $3.35 million for the same period of last year.

● Sales of accessories were $0.39 million for the first half of fiscal year 2025, compared to $1.05 million for the same period of last year.

● Sales of raw materials and scraps were $5.47 million for the first half of fiscal year 2025, representing an increase of 142.33% from $2.26 million for the same period of last year.

● Sales of installation services were $41,523 for the first half of fiscal year 2025, compared to $87,364 for the same period of last year.

 **

***Cost of Revenue***

 **

Cost of revenue was $8.47 million for the first half of fiscal year 2025, representing an increase of 68.73% from $5.02 million for the same period of last year. The increase was primarily attributable to the Company's business growth and an increase in sales resulting in an increase of costs accordingly.

 ****

***Gross Profit and Gross Profit Margin***

 ****

Gross profit was $1.80 million for the first half of fiscal year 2025, representing an increase of 4.90% from $1.71 million for the same period of last year. The increase mainly due to (i) an increase in gross profit from sales of manipulator arms, including installation and warranty services, by approximately $0.05 million; (ii) an increase in gross profit from sales of raw materials and scraps by approximately $0.18 million; and (iii) offset by a decrease in gross profit from sales of accessories and installation services by approximately $0.10 million and $0.05 million, respectively

Gross profit margin was 17.50% for the first half of fiscal year 2025, compared to 25.45% for the same period of last year.

***Operating Expenses***

 ****

Operating expenses were $3.87 million for the first half of fiscal year 2025, representing an increase of 148.04% from $1.56 million for the same period of last year.

● Selling expenses were $0.41 million for the first half of fiscal year 2025, representing a decrease of 14.48% from $0.48 million for the same period of last year. The decrease was mainly due to (i) a reduction of approximately $0.02 million in entertainment expenses, as customer receptions were held at the Company's own facilities; (ii) a reduction of approximately $0.01 million in travel expenses, mainly due to fewer personnel participating in exhibitions in the first half of 2025 compared with the same period in 2024; and (iii) a decrease of approximately $0.08 million in advertising expenses, as the Company did not renew its advertising contract upon expiration in 2025.

● General and administrative expenses were $2.68 million for the first half of fiscal year 2025, representing an increase of 485.23% from $0.46 million for the same period of last year. The increase was mainly due to (i) an increase in staff salaries and benefits by approximately $0.06 million, primarily due to the growth in administrative headcount from 118 in the first half of 2024 to 149 in the first half of 2025; (ii) an increase of share-based compensation expenses by approximately $1.76 million in connection with equity incentives granted to three key administrative employees in the first half of 2025 ; and (iii) an increase of approximately $0.04 million in expenses related to the Company's internal celebration of its Nasdaq listing.

● Research and development expenses were $0.77 million for the first half of fiscal year 2025, representing an increase of 24.68% from $0.62 million for the same period of last year. The increase was primarily attributable to the expansion of the research and development team, with headcount rising from 141 in the first half of 2024 to 186 in the first half of 2025, resulting in higher personnel costs, as well as increased investment in research activities and related material consumption.

***Net Income (Loss)***

Net income was $1.98 million for the first half of fiscal year 2025, compared to a net income of $0.39 million for the same period of last year.

***Basic and Diluted Earnings (Loss) per Share***

Basic and diluted loss per share were $0.13 for the first half of fiscal year 2025, compared to basic and diluted earnings per share of $0.03 for the same period of last year.

**Financial Condition**

As of June 30, 2025, the Company had cash and cash equivalents of $1.72 million, compared to $2.47 million as of December 31, 2024.

Net cash used in operating activities was $2.94 million for the first half of fiscal year 2025, compared to $0.29 million for the same period of last year.

Net cash used in investing activities was $5.02 million for the first half of fiscal year 2025, compared to $5,743 for the same period of last year.

Net cash provided by financing activities was $6.91 million for the first half of fiscal year 2025, compared to $1.47 million for the same period of last year.

**About INLIF LIMITED**

Through its operating entity in the People's Republic of China, Ewatt Robot Equipment Co. Ltd., established in September 2016, INLIF is engaged in the research, development, manufacturing, and sales of injection molding machine-dedicated manipulator arms. It is also a provider of installation services and warranty services for manipulator arms, and accessories and raw materials for manipulator arms. The Company produces an extensive portfolio of injection molding machine-dedicated manipulator arms, including transverse single and double-axis manipulator arms, transverse and longitudinal multi-axis manipulator arms, and large bullhead multi-axis manipulator arms, all developed by itself. For more information, please visit the Company's website: https://ir.yiwate88.com/.

***Forward-Looking Statements***

 

*Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the "Risk Factors" section of the registration statement filed with the U.S. Securities and Exchange Commission (the "SEC"). Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov.*

 

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

**INLIF LIMITED**

Investor Relations Department<br> Email: ir@yiwate88.com

**Ascent Investor Relations LLC**

Tina Xiao

Phone: +1-646-932-7242

Email: investors@ascent-ir.com

**INLIF LIMITED<br> UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS<br> (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30, <br> 2025** | **As of<br> December 31,<br> 2024** |
| **ASSETS** | | |
| **CURRENT ASSETS:** | | |
| Cash and cash equivalents | $1715784 | $2467638 |
| Accounts receivable, net | 7141688 | 3840120 |
| Inventories | 3662699 | 5300458 |
| Deferred offering costs |  | **1482558** |
| Prepayments and other current assets | 4638000 | 159570 |
| Amounts due from related parties | 2089 | 1030 |
| **TOTAL CURRENT ASSETS** | $**17160260** | $**13251374** |
| **NON-CURRENT ASSETS:** |  |  |
| Property, plant, and equipment, net | $3487572 | $3037312 |
| Land-use rights, net | 2146880 | 2130164 |
| Intangible assets, net | 41979 | 43773 |
| Finance lease assets | 111202 |  |
| Deferred tax assets | 6991 | 5169 |
| **TOTAL NON-CURRENT ASSETS** | $**5794624** | $**5216418** |
| **TOTAL ASSETS** | $**22954884** | $**18467792** |
| **LIABILITIES** |  |  |
| **CURRENT LIABILITIES:** |  |  |
| Accounts payable | $1726132 | $3132613 |
| Bank loans | 4578703 | 4630581 |
| Contract liabilities |  | 1712 |
| Accrued expenses and other payables | 471883 | 190645 |
| Warranty liabilities | 46080 | 31602 |
| Income taxes payable | 8906 | 27337 |
| Amounts due to related parties | 169812 | 186768 |
| Current finance lease liabilities | 58925 |  |
| **TOTAL CURRENT LIABILITIES** | $**7060441** | $**8201258** |
| **NON-CURRENT LIABILIT:** |  |  |
| Finance lease liabilities | $42946 | $— |
| **TOTAL NON-CURRENT LIABILITY** | $**42946** | $— |
| **TOTAL LIABILITIES** | $**7103387** | $**8201258** |
| **COMMITMENTS AND CONTINGENCIES (NOTE 19)** |  |  |
| **SHAREHOLDERS' EQUITY** |  |  |
| Class A Ordinary Share, $0.0001 par value, 350,000,000 shares authorized; 3,400,000 shares issued and outstanding\* | $340 | $— |
| Class B Ordinary Share, $0.0001 par value, 150,000,000 shares authorized; 12,500,000 shares issued and outstanding\* | 1250 | 1250 |
| Additional paid-in capital | 14378738 | 7037503 |
| Statutory reserve | 361083 | 361083 |
| Retained earnings | 1226398 | 3201818 |
| Accumulated other comprehensive loss | (116312) | (335120) |
| **TOTAL SHAREHOLDERS' EQUITY** | $**15851497** | $**10266534** |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $**22954884** | $**18467792** |

---

\* The share amounts are presented on a retrospective basis.

**INLIF LIMITED<br> UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)<br> (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2025** | **2024** |
| **Revenue** | $**10270988** | $**6735689** |
| Cost of revenue | (8473079) | (5021704) |
| **Gross profit** | **1797909** | **1713985** |
| **Operating expenses:** |  |  |
| Selling expenses | (412056) | (481822) |
| General and administrative expenses | (2682433) | (458358) |
| Research and development expenses | (770713) | (618137) |
| Total operating expenses | (3865202) | (1558317) |
| **Operating (loss) income** | **(2067293)** | **155668** |
| **Other income (expenses):** |  |  |
| Interest income | 135574 | 1186 |
| Interest expenses | (94780) | (91740) |
| Other income, net | 19810 | 344341 |
| Other expenses, net | (4272) | (1831) |
| Exchange gain | 33838 | 280 |
| Total other expenses, net | 90170 | 252236 |
| **(Loss) Income before income tax** | **(1977123)** | **407904** |
| Income tax benefits (expenses) | 1703 | (17823) |
| **Net (loss) income** | $**(1975420)** | $**390081** |
| **Comprehensive income (loss)** |  |  |
| **Net (loss) income** | $**(1975420)** | $**390081** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments, net of tax | 218808 | (218837) |
| **Comprehensive (loss) income** | $**(1756612)** | $**171244** |
| Earnings per share, basic and diluted | $(0.13) | $0.03 |
| Weighted average number of shares | 14787293 | 12500000 |

---

\* The share amounts are presented on a retrospective basis.

**INLIF LIMITED<br> UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<br> (Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net (loss) income | $(1975420) | $390081 |
| Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |
| Share-based compensation | 1764000 |  |
| Depreciation and amortization | 141432 | 184531 |
| Bad debt reversal | (2333) | (2767) |
| Amortization of finance lease right of use assets | 868 |  |
| Deferred tax assets | (1822) | 415 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | (3299235) | 131004 |
| Inventories | 1637759 | 392025 |
| Prepayments and other current assets | (78431) | 8224 |
| Accounts payable | (1406480) | (1219751) |
| Interest expense on finance lease liabilities | 541 |  |
| Contract liabilities | (1712) | (58344) |
| Accrued expenses and other payables | 281237 | (134076) |
| Warranty liabilities | 14478 |  |
| Income taxes payable | (18430) | 14599 |
| Net cash used in operating activities | (2943548) | (294059) |
| Cash flows from investing activities: |  |  |
| Purchase of property, plant, and equipment | (618796) | (5743) |
| Loans to related parties | (1070) |  |
| Loan to a third party | (4400000) |  |
| Net cash used in investing activities | (5019866) | (5743) |
| Cash flows from financing activities: |  |  |
| Issuance of ordinary shares, net of offering costs | 7060133 |  |
| Principal payments on finance lease liabilities | (10741) |  |
| Proceeds from short-term loans | 3196717 | 3548186 |
| Repayment of short-term loans | (3336311) | (2217616) |
| Deferred offering costs |  | (202380) |
| Amount financed from related parties |  | 572422 |
| Amount repaid to related parties |  | (226943) |
| Net cash provided by financing activities | 6909798 | 1473669 |
| Effect of exchange rate changes | 301762 | (176010) |
| Net (decrease) increase in cash | (751854) | 997857 |
| Cash and cash equivalents at beginning of the period | 2467638 | 598933 |
| Cash and cash equivalents at end of the period | $1715784 | $1596790 |
| Supplemental disclosures of cash flows information: |  |  |
| Cash paid for income taxes | 15326 | 340 |
| Cash paid for interest expense | 94780 | 95869 |
| Supplementary disclosure of non-cash information: |  |  |
| Right of use assets obtained in exchange for finance lease liabilities | 112071 |  |

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