# EDGAR Filing Document

**Accession Number:** 0001837821
**File Stem:** 0001213900-25-079036
**Filing Date:** 2025-8
**Character Count:** 158273
**Document Hash:** 41b9057bde7964cde077907242815fda
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-079036.hdr.sgml**: 20250820

**ACCESSION NUMBER**: 0001213900-25-079036

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 95

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250820

**DATE AS OF CHANGE**: 20250820

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Jin Medical International Ltd.
- **CENTRAL INDEX KEY:** 0001837821
- **STANDARD INDUSTRIAL CLASSIFICATION:** ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41661
- **FILM NUMBER:** 251237724

**BUSINESS ADDRESS:**
- **STREET 1:** NO. 33 LINGXIANG ROAD, WUJIN DISTRICT
- **STREET 2:** CHANGZHOU CITY
- **CITY:** JIANGSU PROVINCE
- **STATE:** F4
- **ZIP:** 213149
- **BUSINESS PHONE:** (86)51989607972

**MAIL ADDRESS:**
- **STREET 1:** NO. 33 LINGXIANG ROAD, WUJIN DISTRICT
- **STREET 2:** CHANGZHOU CITY
- **CITY:** JIANGSU PROVINCE
- **STATE:** F4
- **ZIP:** 213149

?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 August 2025

Commission File Number: 001-41661

**JIN MEDICAL INTERNATIONAL LTD.**

(Exact name of registrant as specified in its charter)

**No. 33 Lingxiang Road, Wujin District**

**Changzhou City, Jiangsu Province**

**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; Form 40-F ☐

**INCORPORATION BY REFERENCE**

This report on Form 6-K ("Report") shall be deemed to be incorporated by reference into the registration statement on [F-3](http://www.sec.gov/Archives/edgar/data/1837821/000121390025057795/ea0246531-f3_jinmedical.htm) (File No. 333-288314) of Jin Medical International Ltd., a Cayman Islands exempted company (the "Company") filed with the U.S. Securities and Exchange Commission June 25, 2025), ("Registration Statement"), and into each prospectus or prospectus supplement outstanding under the 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.

**EXPLANATORY NOTE**

The Company is furnishing this current report on Form 6-K to provide its unaudited condensed consolidated financial statements for the six months ended March 31, 2025, attached as Exhibit 99.1 to this report of foreign private issuer on Form 6-K,. and Management's Discussion and Analysis of Financial Condition and Results of Operations for the six months ended March 31, 2025 is attached as Exhibit 99.2 to this report of foreign private issuer on Form 6-K

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Form 6-K Report and the exhibits hereto contain certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 identify these forward-looking statements by words or phrases such as "approximates," "assesses," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or similar expressions.

Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to significant risks and uncertainties that are described more fully in "Item 3. Key Information-D. Risk Factors" on our annual report on Form 20-F filed with the SEC on January 24, 2025. Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Fluctuations in our future financial results may negatively impact the value of our Class A ordinary shares. In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, among other things:

● assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items;

● our ability to execute our growth, and expansion, including our ability to meet our goals;

● current and future economic and political conditions;

● our capital requirements and our ability to raise any additional financing which we may require;

● our ability to attract clients and further enhance our brand recognition;

● our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

● trends and competition in the education industry;

● other assumptions described in this Report underlying or relating to any forward-looking statements.

Should one or more of the foregoing risks or uncertainties materialize, should any of our assumptions prove incorrect, or should we be unable to address any of the foregoing factors, our actual results may vary in material and adverse respects from those projected in these forward-looking statements. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects, on us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

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. 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 annual report and other filings with the U.S. Securities and Exchange Commission. As a result, you are cautioned not to rely on any forward-looking statements.

**Financial Statements and Exhibits.**

<u>Exhibits</u>:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Condensed Consolidated Financial Statements as of March 31, 2024 and for the Six Months Ended March 31, 2025 and 2024.](ea025404801ex99-1_jinmedical.htm) |
| 99.2 | [Operating and Financial Review and Prospects in Connection with the Unaudited Condensed Consolidated Financial Statements for the Six Months March 31, 2025 and 2024.](ea025404801ex99-2_jinmedical.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.

---

| | | |
|:---|:---|:---|
|  | Jin Medical International Ltd**.** | Jin Medical International Ltd**.** |
| Date: August 20, 2025 | By: | /s/ Erqi Wang |
|  |  | Erqi Wang |
|  |  | Chief Executive Officer |

---

---

| | |
|:---|:---|
| By: | /s/ Ziqiang Wang |
|  | Ziqiang Wang |
|  | Chief Financial Officer |

---

## Exhibit 99.1

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

**Exhibit 99.1**

**JIN MEDICAL INTERNATIONAL LTD.**

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **September 30,**<br>**2024** |
|  | (Unaudited) | |
| **ASSETS** |  |  |
| **CURRENT ASSETS:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $11131890 | $8136179 |
| &nbsp;&nbsp;&nbsp;Short-term investments | 19824675 | 18621251 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 4238724 | 5912035 |
| &nbsp;&nbsp;&nbsp;Accounts receivable - related parties | 1385555 | 2546358 |
| &nbsp;&nbsp;&nbsp;Inventories | 4455065 | 5173458 |
| &nbsp;&nbsp;&nbsp;Due from related parties | 137550 | 101906 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2607496 | 2325029 |
| **TOTAL CURRENT ASSETS** | **43780955** | **42816216** |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 175803 | 256117 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 3337796 | 1460286 |
| &nbsp;&nbsp;&nbsp;Land use right, net | 1094493 | 1146828 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets, net | 134447 | 121322 |
| **TOTAL ASSETS** | $**48523494** | $**45800769** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **CURRENT LIABILITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Short-term bank loans | $15726649 | $11322440 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 3056059 | 3012334 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | 450453 | 431003 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 346410 | 671414 |
| &nbsp;&nbsp;&nbsp;Deferred revenue - related parties | 114030 | 125663 |
| &nbsp;&nbsp;&nbsp;Taxes payable | 608316 | 1123573 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 275741 | 280553 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 159420 | 185154 |
| **TOTAL CURRENT LIABILITIES** | **20737078** | **17152134** |
| **NON-CURRENT LIABILITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, non-current | 30095 | 96175 |
|  | **30095** | **96175** |
| **TOTAL LIABILITIES** | **20767173** | **17248309** |
| **COMMITMENTS AND CONTINGENCIES** |  | ' |
| **SHAREHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary shares, $0.00005 par value, 1,000,000,000 shares authorized, 156,547,100 shares were issued and outstanding as of March 31, 2025 and September 30, 2024, respectively\* | 7827 | 7827 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 6749144 | 6749144 |
| &nbsp;&nbsp;&nbsp;Statutory reserves | 2664549 | 2593076 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 19860865 | 20021346 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (1369835) | (556209) |
| **TOTAL SHAREHOLDERS' EQUITY** | **27912550** | **28815184** |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | (156229) | (262724) |
| **TOTAL EQUITY** | **27756321** | **28552460** |
| **TOTAL LIABILITIES AND EQUITY** | $**48523494** | $**45800769** |

---

\* Retrospectively restated for effect of a 20-for-1 forward split on February 8, 2024.

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

**JIN MEDICAL INTERNATIONAL LTD.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months ended<br> March 31,** | **For the Six Months ended<br> March 31,** |
|  | **2025** | **2024** |
| **REVENUE** |  |  |
| &nbsp;&nbsp;&nbsp;Revenue - third party | $9678459 | $9380513 |
| &nbsp;&nbsp;&nbsp;Revenue - related party | 203046 | 1176378 |
| &nbsp;&nbsp;&nbsp;Total revenue | 9881505 | 10556891 |
| **COST OF REVENUE AND RELATED TAX** |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 7348488 | 6759586 |
| &nbsp;&nbsp;&nbsp;Business and sales related tax | 130495 | 60975 |
| &nbsp;&nbsp;&nbsp;Total cost of revenue and related tax | **7478983** | **6820561** |
| **GROSS PROFIT** | **2402522** | **3736330** |
| **OPERATING EXPENSES** |  |  |
| Selling expenses | 747258 | 358768 |
| General and administrative expenses | 1448590 | 1538680 |
| Research and development expenses | 660886 | 609645 |
| Total operating expenses | **2856734** | **2507093** |
| **(LOSS) INCOME FROM OPERATIONS** | **(454212)** | **1229237** |
| **OTHER INCOME** |  |  |
| Interest income, net | 301535 | 681588 |
| Foreign exchange gain | 58857 | 414 |
| Other income, net | 122384 | 102164 |
| Total other income, net | **482776** | **784166** |
| **INCOME BEFORE INCOME TAX PROVISION** | **28564** | **2013403** |
| **PROVISION FOR INCOME TAXES** | 19566 | 309013 |
| **NET INCOME** | **8998** | **1704390** |
| &nbsp;&nbsp;&nbsp;Less: net income (loss) attributable to non-controlling interest | 98006 | (89704) |
| **NET (LOSS) INCOME ATTRIBUTABLE TO JIN MEDICAL INTERNATIONAL LTD.** | $**(89008)** | $**1794094** |
| **COMPREHENSIVE INCOME (LOSS)** |  |  |
| Net income | 8998 | 1704390 |
| Foreign currency translation (loss) gain | (805137) | 159423 |
| Comprehensive (loss) income | **(796139)** | **1863813** |
| &nbsp;&nbsp;&nbsp;Less: comprehensive income (loss) attributable to non-controlling interest | 106495 | (89253) |
| **COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO JIN MEDICAL INTERNATIONAL LTD.** | $**(902634)** | $**1953066** |
| **Earnings per common share - basic and diluted** | $0.00 | $0.01 |
| **Weighted average shares - basic and diluted\*** | **156547100** | **156401198** |

---

\* Retrospectively restated for effect of a 20-for-1 forward split on February 8, 2024.

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

**JIN MEDICAL INTERNATIONAL LTD.**

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

**FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares\*** | **Ordinary Shares\*** | | | | | | | |
|  | **Shares** | **Amount** |<br>**Additional**<br>**Paid in**<br>**Capital** |<br>**Statutory**<br>**Reserves** |<br>**Retained**<br>**Earnings** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income (Loss)** |<br>**Total**<br>**Shareholders'**<br>**Equity** |<br>**Non-**<br>**controlling**<br>**Interest** |<br>**Total**<br>**Equity** |
| **Balance at September 30, 2023** | 155947100 | $7797 | $6437179 | $2010890 | $16927605 | $(1404366) | $23979105 | $- | $23979105 |
| Issuance of ordinary shares | 30000 | 30 | 311965 |  |  |  | 311995 |  | 311995 |
| Net income (loss) |  |  |  |  | 1794094 |  | 1794094 | (89704) | 1704390 |
| Statutory reserve |  |  |  | 266540 | (266540) |  |  |  |  |
| Foreign currency translation gain | - | - | - | - | - | 158972 | 158972 | 451 | 159423 |
| **Balance at March 31, 2024** | 155977100 | $6780 | $391775 | $2277430 | $18455159 | $(1245394) | $26244166 | $(89253) | $26154913 |
| **Balance at September 30, 2024** | 156547100 | $7827 | $6749144 | $2593076 | $20021346 | $(556209) | $28815184 | $(262724) | $28552460 |
| Net income (loss) |  |  |  |  | (89008) |  | (89008) | 98006 | 8998 |
| Statutory reserve |  |  |  | 71473 | (71473) |  |  |  |  |
| Foreign currency translation gain (loss) | - | - | - | - | - | (813626) | (813626) | 8489 | (805137) |
| **Balance at March 31, 2025** | 156547100 | $7827 | $6749144 | $2664549 | $19860865 | $(1369835) | $27912550 | $(156229) | $27756321 |

---

\* Retrospectively restated for effect of a 20-for-1 forward split on February 8, 2024.

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

**JIN MEDICAL INTERNATIONAL LTD.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months ended<br> March 31,** | **For the Six Months ended<br> March 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $8998 | $1704390 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of operating lease right-of-use assets | 72050 | 48105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 131260 | 120046 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on disposition of property and equipment | - | 2590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for (net recovery of) credit losses | 27919 | (87627) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax (benefit) provision | (17271) | 23711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term investments income | (47500) | (11655) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 1451739 | (454837) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable - related parties | 1078992 | (569807) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 546225 | 566734 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 177882 | (1308346) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 145648 | (278216) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other payables | (103533) | 206416 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (303500) | (171223) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue - related parties | (7430) | 11241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes payable | (516710) | 291899 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (82740) | (43424) |
| **Net cash provided by operating activities** | 2562029 | 49997 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to property, plant and equipment | (2051134) | (83680) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to land use right | - | (980692) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposal of property and equipment | - | 348 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment for business acquisition | (500000) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments for short-term investments | (5280383) | (16136000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of short-term investments | 3642753 | 8810675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of advances made to related parties | - | 4240111 |
| **Net cash used in investing activities** | (4188764) | (4149238) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of ordinary shares, net of issuance costs | - | 311995 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from short-term bank loans | 9335497 | 5554080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of short-term bank loans | (4532805) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from amount due to related parties | 98397 | 138223 |
| **Net cash provided by financing activities** | 4901089 | 6004298 |
| **Effect of exchange rate changes on cash** | (278643) | 40337 |
| **Net increase in cash** | 2995711 | 1945394 |
| **Cash, beginning of period** | 8136179 | 6929508 |
| **Cash, end of period** | $11131890 | $8874902 |
| **Supplemental disclosure information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income tax | $31633 | $2234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $208991 | $93256 |
| **Non-cash operating, investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use assets obtained in exchange for operating lease liabilities | $- | $312767 |

---

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

**JIN MEDICAL INTERNATIONAL LTD. AND SUBSIDIARIES**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION**

 ****

JIN MEDICAL INTERNATIONAL LTD. ("Jin Med" or the "Company") was established under the laws of the Cayman Islands on January 14, 2020 as a holding company.

Jin Med owns 100% equity interest of Zhongjin International Limited ("Zhongjin HK"), an entity incorporated on February 25, 2020 in accordance with the laws and regulations in Hong Kong.

Erhua Medical Technology (Changzhou) Co., Ltd. ("Erhua Med") was formed on September 24, 2020, as a Wholly Foreign-Owned Enterprise ("WFOE") in the People's Republic of China ("PRC"). Zhongjin HK owns 100% equity interest of Erhua Med.

Jin Med, Zhongjin HK and Erhua Med are currently not engaging in any active business operations and merely acting as holding companies.

Changzhou Zhongjin Medical Equipment Co., Ltd. ("Changzhou Zhongjin") was incorporated on January 26, 2006 in accordance with PRC laws. Changzhou Zhongjin has two wholly-owned subsidiaries, Zhongjin Medical Equipment Taizhou Co., Ltd. ("Taizhou Zhongjin"), incorporated on June 17, 2013, and Changzhou Zhongjin Jing'ao Trading Co., Ltd ("Zhongjin Jing'ao"), incorporated on December 18, 2014 in accordance with PRC laws.

Zhongjin Kangma Information Technology (Jiangsu) Co., Ltd. ("Zhongjin Kangma") was incorporated on August 21, 2023 in accordance with PRC laws. Changzhou Zhongjin owns an equity interest of 80% of Zhongjin Kangma, and the remaining 20% equity interest is owned by one shareholder.

Zhongjin Kangma Health Technology (Shanghai) Co., Ltd. ("Kangma Health") was incorporated on February 19, 2025 in accordance with PRC laws. Zhongjin Kangma owns 100% equity interest of Kangma Health.

Changzhou Zhongjin, Taizhou Zhongjin, Zhongjin Jing'ao, Zhongjin Kangma and Kangma Health are collectively referred to as the "Zhongjin Operating Companies" below.

Zhongjin Medical Equipment Anhui Co., Ltd. ("Anhui Zhongjin") was incorporated on October 7, 2023, as a WFOE in the PRC. Zhongjin HK owns 100% equity interest of Anhui Zhongjin. Anhui Zhongjin is currently not engaging in any active business operations.

The Company, through its wholly-owned subsidiaries and entities controlled through contractual arrangements, is primarily engaged in the design, development, manufacturing and sales of wheelchair and other living aids products to be used by people with disabilities or impaired mobility. The Company's products are sold to distributors in both China and in the overseas markets.

 **

***Reorganization***

 **

A reorganization of the legal structure of the Company ("Reorganization") was completed on November 26, 2020. The Reorganization involved the incorporation of Jin Med, Zhongjin HK and Erhua Med, and signing of certain contractual arrangements (collectively, the "VIE Agreements") between Zhongjin Technology, the shareholders of Changzhou Zhongjin and Changzhou Zhongjin. Consequently, the Company became the ultimate holding company of Zhongjin HK, Erhua Med, and through the contractual arrangements, WFOE, or Erhua Med, became the primary beneficiary of the Variable Interest Entity ("VIE"), Changzhou Zhongjin, and its subsidiaries. Pursuant to the VIE Agreements, Erhua Med has gained effective control over Changzhou Zhongjin. Therefore, Changzhou Zhongjin should be treated as a VIE under the Statements of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810 Consolidation. Since Taizhou Zhongjin and Zhongjin Jing'ao are wholly-owned subsidiaries of Changzhou Zhongjin, they are further referenced as VIE's subsidiaries.

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (continued)**

 ****

***Reorganization (continued)***

The Company, together with its wholly owned subsidiaries, the VIE and the VIE's subsidiaries, are effectively controlled by the same shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of entities under common control. The consolidation of the Company, its subsidiaries, the VIE and the VIE's subsidiaries has been accounted for at historical cost.

The unaudited condensed consolidated financial statements of the Company include the following entities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Entity** | **Date of<br> Incorporation** | **Place of<br> Incorporation** | **% of<br> Ownership** | **Principal Activities** |
| Jin Med | January 14, 2020 | Cayman Island | Parent | Investment holding |
| Zhongjin HK | February 25, 2020 | Hong Kong | 100% | Investment holding |
| Erhua Med | September 24, 2020 | PRC | 100% | WFOE, Investment holding |
| Changzhou Zhongjin | January 26, 2006 | PRC | VIE | Design, development, manufacturing and sales of wheelchair and other mobility products |
| Taizhou Zhongjin | June 17, 2013 | PRC | 100% controlled subsidiary of the VIE | Design, development, manufacturing and sales of wheelchair and other mobility products |
| Zhongjin Jing'ao | December 18, 2014 | PRC | 100% controlled subsidiary of the VIE | Design, development, manufacturing and sales of wheelchair and other mobility products |
| Zhongjin Kangma | August 21, 2023 | PRC | 80% controlled subsidiary of the VIE | Sales of wheelchair and other mobility products |
| Anhui Zhongjin | October 7, 2023 | PRC | 100% | Newly incorporated – not in operation yet |
| Kangma Health | February 19, 2025 | PRC | 100% controlled subsidiary of the Zhongjin Kangma | Newly incorporated – not in operation yet |

---

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (continued)**

<u>The VIE contractual arrangements</u>

The Company's main operating entities, Changzhou Zhongjin and its subsidiaries Taizhou Zhongjin, Zhongjin Jing'ao, Zhongjin Kangma and Kangma Health (or the "Zhongjin Operating Companies" as referred above), are controlled through contractual arrangements in lieu of direct equity ownership by the Company.

A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE, because it met the condition under the accounting principles generally accepted in the United States of America ("U.S. GAAP") to consolidate the VIE.

Erhua Med, is deemed to have a controlling financial interest in and be the primary beneficiary of the Zhongjin Operating Companies because it has both of the following characteristics:

● The power to direct activities of the Zhongjin Operating Companies that most significantly impact such entities' economic performance, and

● The right to receive benefits from, the Zhongjin Operating Companies that could potentially be significant to such entities.

Pursuant to these contractual arrangements, the Zhongjin Operating Companies shall pay service fees equal to all of their net profits after tax payments to Erhua Med. At the same time, Erhua Med has the right to receive substantially all of their economic benefits for accounting purposes. Such contractual arrangements are designed so that the operations of the Zhongjin Operating Companies are solely for the benefit of Erhua Med and ultimately, the Company, and therefore the Company must consolidate the Zhongjin Operating Companies under U.S. GAAP.

<u>Risks associated with the VIE structure</u>

The Company believes that the contractual arrangements with the VIE and the shareholders of the VIE are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

● revoke the business and operating licenses of the Company's PRC subsidiaries and VIE;

● discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiaries and VIE;

● limit the Company's business expansion in China by way of entering into contractual arrangements;

● impose fines or other requirements with which the Company's PRC subsidiaries and VIE may not be able to comply;

● require the Company or the Company's PRC subsidiaries and VIE to restructure the relevant ownership structure or operations; or

● restrict or prohibit the Company's use of the proceeds from public offering to finance the Company's business and operations in China.

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (continued)**

The Company's ability to conduct its businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. In such case, the Company may not be able to consolidate the VIE and the VIE's subsidiaries in its unaudited condensed consolidated financial statements as it may lose the ability to exert effective control over the VIE and its shareholders and it may lose the ability to receive economic benefits from the VIE and the VIE's subsidiaries for accounting purposes under U.S. GAAP. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and the VIE and the VIE's subsidiaries.

The Company, Zhongjin HK and Erhua Med are essentially holding companies and do not have active operations as of March 31, 2025 and September 30, 2024. As a result, total assets and liabilities presented on the unaudited condensed consolidated balance sheets and revenue, expenses, and net income presented on the unaudited condensed consolidated statement of comprehensive income (loss) as well as the cash flows from operating, investing and financing activities presented on the unaudited condensed consolidated statement of cash flows are substantially the financial position, operation results and cash flows of the VIE and the VIE's subsidiaries. The Company has not provided any financial support to the VIE and the VIE's subsidiaries during the six months ended March 31, 2025 and 2024. Additionally, pursuant to the VIE Agreements, Erhua Med has the right to receive service fees equal to the VIE's net profits after tax payments. None of these fees were paid to Erhua Med as of March 31, 2025. Accordingly, as of March 31, 2025 and September 30, 2024, Erhua Med had $12,586,142 and $12,911,547 consulting fee receivables due from the VIE and the VIE's subsidiaries, respectively. These receivables were fully eliminated upon the consolidation.

The following financial statement amounts and balances of the VIE and VIE's subsidiaries were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30, <br> 2024** |
| Current assets | $38902078 | $37842016 |
| Non-current assets | 1740553 | 1971681 |
| Total assets | $40642631 | $39813697 |
| Current liabilities | $20567126 | $17013879 |
| Non-current liabilities | 30095 | 96175 |
| Total liabilities | $20597221 | $17110054 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2025** | **2024** |
| Net revenue | $9881505 | $10556891 |
| Net income | $207608 | $2201868 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2025** | **2024** |
| Net cash provided by operating activities | $2919587 | $629983 |
| Net cash used in investing activities | $(4297134) | $(3560418) |
| Net cash provided by financing activities | $4901089 | $5692303 |

---

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of consolidation***

 ****

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the Company's unaudited condensed consolidated financial statement. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and the notes for the years ended September 30, 2024 and 2023. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, and entities it controlled through VIE agreements. All inter-company balances and transactions are eliminated upon consolidation.

***Uses of estimates***

 ****

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the expected credit losses for receivables, valuation of inventories, useful lives of property, plant and equipment and land use right, the recoverability of long-lived assets, and realization of deferred tax assets. Actual results could differ from those estimates.

***Cash***

 ****

Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. As of March 31, 2025 and September 30, 2024, the Company does not have any cash equivalents.

 **

***Short-term investments***

 **

The Company's short-term investments consist of wealth management financial products purchased from PRC banks or financial institution with maturities within one year. The banks or financial institution invest the Company's funds in certain financial instruments including money market funds, bonds or mutual funds, with rates of return on these investments ranging from 2.0% to 6.0% per annum. The carrying values of the Company's short-term investments approximate fair value due to their short-term maturities. The interest earned is recognized in the unaudited condensed consolidated statements of comprehensive income (loss) over the contractual term of these investments.

The Company had short-term investments of $19,824,675 and $18,621,251 as of March 31, 2025 and September 30, 2024, respectively. The Company recorded interest income of $475,922 and $808,363 for the six months ended March 31, 2025 and 2024, respectively.

***Accounts receivable, net***

Accounts receivable are presented net of allowance for credit losses. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable. As of March 31, 2025 and September 30, 2024, allowance for credit losses amounted to $106,801 and $81,734, respectively.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Credit Losses***

 ****

On October 1, 2023, the Company adopted Accounting Standards Update 2016-13 "Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The adoption of the credit loss accounting standard has no material impact on the Company's consolidated financial statements as of October 1, 2023.

The Company's account receivables and other receivables included in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets are within the scope of ASC Topic 326. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable and other receivables balances, credit-worthiness of the customers and other debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and other debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.

Expected credit losses are recorded as allowance for credit losses on the unaudited condensed consolidated statements of comprehensive income (loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.

***Inventories***

Inventories are stated at lower of cost or net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Write-down is recorded when future estimated net realizable value is less than cost, which is recorded in cost of revenue in the unaudited condensed consolidated statements of comprehensive income (loss). The Company periodically evaluates inventories against their net realizable value, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. The reversal of inventory written down is prohibited under the U.S. GAAP.

***Fair value of financial instruments***

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

● 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, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

● Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company's financial instruments, including cash, short-term investments, accounts receivable, due from related parties, short-term bank loans, accounts payable, due to related parties, accrued liabilities and other payable, and taxes payable, approximate the fair value of the respective assets and liabilities as of March 31, 2025 and September 30, 2024 based upon the short-term nature of the assets and liabilities.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

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

 ****

Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows:

---

| | |
|:---|:---|
|  | **Useful life** |
| Buildings | 20–25 years |
| Leasehold improvements | Lesser of useful life and lease term |
| Machinery and equipment | 5–10 years |
| Automobiles | 3–5 years |
| Office and electric equipment | 3–5 years |

---

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the unaudited condensed consolidated statements of comprehensive income (loss).

***Leases***

The Company leases offices spaces and employee dormitories, which is classified as operating leases in accordance with ASC Topic 842, Leases ("Topic 842"). Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with an initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use ("ROU") asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. The Company also established a capitalization threshold of $10,000 for lease to be recognized as ROU and lease liability. There was no impairment for operating lease right-of-use lease assets as of March 31, 2025 and September 30, 2024.

***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 parcels of land for specified periods of time. Land use rights are stated at cost less accumulated amortization. Land use rights are amortized using the straight-line method with the following estimated useful lives:

---

| | |
|:---|:---|
|  | **Useful life** |
| Land use rights | 46 -50 years |

---

 ****

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

 ****

***Impairment of long-lived assets***

Long-lived assets with finite lives, primarily property, plant and equipment, operating lease right-of-use assets and land use right are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset's carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of March 31, 2025 and September 30, 2024.

 ****

***Revenue recognition***

The Company generates its revenues primarily through sales of its products and recognizes revenue in accordance with ASC 606. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

 ****

ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract 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) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue.

In accordance to ASC 606, the Company recognizes revenue when it transfers goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products 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. All of the Company's contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there are no other separately identifiable promises in the contracts. The Company's revenue streams are recognized at a point in time when the control of goods is transferred to customer, which generally occurs at delivery. The Company's products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. Revenue is reported net of all value added taxes ("VAT").

The Company generally offers 10 years warranty for the frame of its wheelchairs, and one year warranty for other parts of wheelchairs, except for "wear items", i.e. those parts that wear out, such as tires or brake pads, which are covered under a warranty for six months. Historically, warranty costs incurred was immaterial, and the warranty costs for the six months ended March 31, 2025 and 2024 were all $nil.

***Contract Assets and Liabilities***

Payment terms are established on the Company's pre-established credit requirements based upon an evaluation of customers' credit quality. The Company did not have contract assets as of March 31, 2025 and September 30, 2024. Contract liabilities are recognized for contracts where payment has been received in advance of delivery of the products. The contract liability balance can vary significantly depending on the timing when cash is received and when shipment or delivery occurs. As of March 31, 2025 and September 30, 2024, other than deferred revenue, the Company had no other contract liabilities or deferred contract costs recorded on its unaudited condensed consolidated balance sheets, and the Company had no material incremental costs for obtaining a contract. Costs of fulfilling customers' purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Disaggregation of Revenues***

The Company disaggregates its revenue from contracts by product types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company's disaggregation of revenues for the six months ended March 31, 2025 and 2024 are as the following:

<u>Geographic information</u>

The summary of the Company's total revenues by geographic market for the six months ended March 31, 2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2025** | **2024** |
| China domestic market | $2575152 | $2661717 |
| Overseas market | 7306353 | 7895174 |
| Total revenue | $9881505 | $10556891 |

---

<u>Revenue by product categories</u>

The summary of the Company's total revenues by product categories for the six months ended March 31, 2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2025** | **2024** |
| Wheelchair | $7261231 | $7694373 |
| Wheelchair components | 991901 | 842681 |
| Other products | 1628373 | 2019837 |
| Total revenue | $9881505 | $10556891 |

---

***Research and development expenses***

In connection with the design and development of wheelchair and other living aids products, the Company expense all internal research costs as incurred, which primarily comprise employee costs, internal and external costs related to execution of studies, manufacturing costs, facility costs of the research center, and amortization of land use right, depreciation for property, plant and equipment used in the research and development activities. For the six months ended March 31, 2025 and 2024, research and development expenses were $660,886 and $609,645, respectively.

 ****

***Non-controlling Interest***

For the Company's consolidated subsidiaries, the VIE and the VIE's subsidiaries, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Company's unaudited condensed consolidated balance sheets and have been separately disclosed in the Company's unaudited condensed consolidated statements of comprehensive income (loss) to distinguish the interests from that of the controlling shareholder.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Income taxes***

 ****

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited condensed consolidated financial statements. 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.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the six months ended March 31, 2025 and 2024. The Company does not believe there was any uncertain tax provision at March 31, 2025 and September 30, 2024.

The Company's subsidiaries, VIE and VIE's subsidiaries in China are subject to the income tax laws of the PRC. No income was generated outside the PRC for the six months ended March 31, 2025 and 2024. As of March 31, 2025, all of the Company's tax returns of its PRC Subsidiaries remain open for statutory examination by PRC tax authorities.

***Value added tax ("VAT")***

Sales revenue is reported net of VAT. The VAT is based on gross sales price and VAT rates range up to 13% in the six months ended March 31, 2025 and 2024, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on purchased raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or receivable net of payments in the accompanying unaudited condensed consolidated financial statements. For domestic sales of wheelchairs, VAT is exempted. Further, when exporting goods, the exporter is entitled to some or all of the refunds of the VAT paid or assessed when the Company completes all the required tax filing procedures. All of the VAT returns filed for the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. VAT tax refunds associated with export sales amounted to $350,626 and $361,431 for the six months ended March 31, 2025 and 2024, respectively.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

 ****

***Warrant accounting***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480*, "Distinguishing Liabilities from Equity"* ("ASC 480") and ASC Topic 815, "*Derivatives and Hedging"* ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent interim period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of comprehensive income (loss).

As the warrants issued upon the initial public offering meet the criteria for equity classification under ASC 815, therefore, the warrants are classified as equity.

***Earnings per share***

The Company computes earnings 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 is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants), using the treasury stock method, as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted EPS, the treasury stock method assumes that outstanding potential common shares are exercised and the proceeds are used to purchase common share at the average market price during the period. Potential common shares may have a dilutive effect under the treasury stock method only when the average market price of the common share during the period exceeds the exercise price of the potential common shares. Potential common 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 March 31, 2025 and September 30, 2024, there were no dilutive shares.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Risks and uncertainties***

The main operation of the Company is located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company's results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.

The Company's business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company's operations. Additionally, since February, 2022, the global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. However, economic activities continued to normalize as the effects of COVID-19 on people's daily lives lessened, and, on the whole, the global economy was beginning to recover gradually. However, the uncertainties remain high for global economy, particularly centered around the recent U.S. policy trends, with relatively significant downside risks. The Company's operation has not been impacted, however, due to the significant uncertainties around the further development of the conflict and U.S. policy, the potential additional sanctions and other volatilities that could be brought to the global market, it is impossible to predict the extent to which the Company's operation and business may be impacted.

 **

***Foreign currency translation***

 **

The functional currency for Jin Med is U.S Dollar ("US$" or "$"). Zhongjin HK uses Hong Kong dollar ("HK$") as its functional currency. However, Jin Med and Zhongjin HK currently only serve as holding company and do not have active operation as of the date of this report. The Company's functional currency for its PRC subsidiaries is the Chinese Yuan ("RMB"). The Company's unaudited condensed consolidated financial statements have been translated into the reporting currency of U.S. Dollars. Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are reflected in the results of operations.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

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

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Six Months<br> Ended March 31,** | **For the Six Months<br> Ended March 31,** | |
|  | **2025** | **2024** | **For the Year Ended <br> September 30,**<br>**2024** |
| Period-end spot rate | US$1=RMB 7.2579 | US$1=RMB 7.2221 | US$1=RMB 7.0149 |
| Average rate | US$1=RMB 7.2323 | US$1=RMB 7.1828 | US$1=RMB 7.1918 |

---

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

C***omprehensive income (loss)***

Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the unaudited condensed consolidated statements of comprehensive income (loss).

***Statement of cash flows***

In accordance with ASC 230, "Statement of Cash Flows", cash flows from the Company's operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

***Employee benefit expenses***

The Company's subsidiaries, VIE and VIE's subsidiaries in the PRC participate in a government-mandated employer social insurance plan pursuant to which certain social security benefits, work-related injury benefits, maternity leave insurance, medical insurance, unemployment benefit and housing fund are provided to eligible full-time employees. The relevant labor regulations require the Company's subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions based on the applicable benchmarks and rates stipulated by the local government. The contributions to the plan are expensed as incurred. Employee social security and welfare benefits included as expenses in the unaudited condensed consolidated statements of comprehensive income (loss) amounted to $222,391 and $244,722 for the six months ended March 31, 2025 and 2024, respectively.

**Segment reporting**

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted this ASU commencing October 1, 2024 and the adoption of the ASU does not have a material effect on its unaudited condensed consolidated financial statements.

Based on the criteria established by ASC 280, the Company's CODM has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Company has only one operating segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The CODM considers year-over-year fluctuations and budget-to-actual variances of these consolidated results when assessing performance and making operating decisions. The Company manages assets on a consolidated basis as reported on the unaudited condensed consolidated balance sheets.

The Company's CODM uses consolidated net income as the measures of segment profit or loss. Significant segment expenses are consistent with those reported on the unaudited condensed consolidated statements of comprehensive income (loss) and include cost of revenues, selling expenses, general and administrative expenses and research and development expenses. For significant segment expenses incurred during the six months ended March 31, 2025 and 2024, refer to Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss).

 ****

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

 ****

***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.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company plans to adopt this guidance effective October 1, 2025 and the adoption of this ASU is not expected to have a material impact on its unaudited condensed consolidated financial statements.

In November 2024, FASB issued ASU No. 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities ("PBEs") to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. This ASU is effective for fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company plans to adopt this guidance effectively October 1, 2027 and the adoption of this ASU is not expected to have a material impact on its unaudited condensed consolidated financial statements.

**NOTE 3 — ACCOUNTS RECEIVABLE, NET**

Accounts receivable, net consist of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Accounts receivable | $4345525 | $5993769 |
| Less: allowance for credit losses | (106801) | (81734) |
| Accounts receivable, net | $4238724 | $5912035 |

---

The Company's accounts receivable primarily includes balances due from customers when the Company's wheelchair and living aids products have been sold and delivered to customers, the Company's contracted performance obligations have been satisfied, amount billed and the Company has an unconditional right to payment, which has not been collected as of the balance sheet dates.

For accounts receivable, approximately 59.3%, or $2.5 million of the March 31, 2025 balance have been subsequently collected. The remaining balance of approximately $1.7 million is expected to be collected before March 31, 2026.

Allowance for credit losses movement is as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Beginning balance | $81734 | $125448 |
| Additions (reductions) | 27919 | (47515) |
| Foreign currency translation adjustments | (2852) | 3801 |
| Ending balance | $106801 | $81734 |

---

**NOTE 4 — INVENTORIES**

Inventories consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Raw materials | $2098026 | $2060514 |
| Work-in-progress | 1468139 | 1745523 |
| Finished goods | 888900 | 1367421 |
| Inventories | $4455065 | $5173458 |

---

Included in inventory amount is an inventory written down for slow moving items, consisting of raw materials of $781,567 and $720,533, finished goods of $35,139 and $37,524, work-in-progress of $42,818 and $41,474 as of March 31, 2025 and September 30, 2024, respectively.

**NOTE 5 — PREPAID EXPENSES AND OTHER CURRENT ASSETS**

Prepaid expenses and other current assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30, <br> 2024** |
| Other receivable (1) | $152488 | $181309 |
| Advance to suppliers (2) | 1640844 | 1944139 |
| Prepayment for business acquisition (3) | 500000 | - |
| Tax recoverable | 224645 | 34093 |
| Prepaid expenses (4) | 89519 | 165488 |
| Prepaid expenses and other current assets | $2607496 | $2325029 |

---

(1) Other
receivables primarily include advances to employees for business development, rental security deposit for the Company's office
lease and balances to be collected from third-party entities that do not relate to the Company's normal sales activities.

(2) Advance
to suppliers consists of advances to suppliers for purchasing of raw materials that have not been received. As of March 31, 2025, the
aging of approximately 24% of our advance to suppliers are within six months. For balance of advance to suppliers aged more than six
months, approximately 20% of the balance were subsequently utilized as of the date of the report, and the remaining balance is expected
to be utilized by December 2025.

(3) The
amount pertains to prepaid purchase consideration made for the acquisition of a subsidiary. The Company made a partial payment of the
consideration during the six months ended March 31, 2025. Due to the termination of the acquisition, the prepayment is expected to be
refunded by December 2025.

(4) Prepaid
expenses primarily include prepaid marketing planning service fees and professional fees.

**NOTE 6 — LEASES**

The Company leases offices spaces and employee dormitories under non-cancelable operating leases, with expiration dates between 2025 and 2037. In addition, on April 20, 2014, Taizhou Zhongjin signed a lease agreement with the landlord to lease a factory building for 20 years, with annual rent of approximately $39,000 (RMB 250,000). Taizhou Zhongjin invested a total of approximately $0.79 million (RMB 5 million) in leasehold improvements to the leased factory. Pursuant to the lease agreement, the annual rent expense was waived by the landlord to offset against the leasehold improvements until the end of the lease.

The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Lease expenses are recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

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

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets.

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Operating lease right-of-use assets | $175803 | $256117 |
| Operating lease liabilities – current | $159420 | $185154 |
| Operating lease liabilities – non-current | 30095 | 96175 |
| Total operating lease liabilities | $189515 | $281329 |

---

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of March 31, 2025 and September 30, 2024:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Remaining lease term and discount rate: |  |  |
| Weighted average remaining lease term (years) | 1.38 | 1.82 |
| Weighted average discount rate | 3.0% | 3.0% |

---

During the six months ended March 31, 2025 and 2024, the Company incurred total operating lease expenses of $149,460 and $88,469, respectively.

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2025:

---

| | |
|:---|:---|
| Remainder of 2025 | $104253 |
| 2026 | 88324 |
| Total lease payments | 192577 |
| Less: imputed interest | (3062) |
| Present value of lease liabilities | $189515 |

---

**NOTE 7 — PROPERTY, PLANT AND EQUIPMENT, NET**

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

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2025** | **September 30,<br> 2024** |
| Buildings | $2408759 | $2492661 |
| Machinery and equipment | 1815545 | 1876477 |
| Automobiles | 236054 | 244277 |
| Office and electric equipment | 599562 | 616308 |
| Leasehold improvements | 351508 | 363753 |
| Construction in progress (1) | 2037487 | - |
| Subtotal | 7448915 | 5593476 |
| Less: accumulated depreciation | (4111119) | (4133190) |
| Property, plant and equipment, net | $3337796 | $1460286 |

---

(1) The
Company constructed a new manufacturing facility in Chuzhou City, Anhui, to expand the production capacity for its premium mobility products,
particularly mid-to-high-end electric wheelchairs and senior mobility scooters. The investment budget for the new manufacturing facility
is approximately RMB73.2 million (approximately $10.1 million) after VAT deduction. The construction is expected to be completed in October
2025. As of March 31, 2025, total cost incurred for the construction was $2,037,487 (approximately RMB14.8 million).

Depreciation expense was $117,478 and $112,713 for the six months ended March 31, 2025 and 2024, respectively.

**NOTE 8 — LAND USE RIGHT, NET**

Land use right, net, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2025** | **September 30,<br> 2024** |
| Land use rights | $1192130 | $1233656 |
| Less: accumulated amortization | (97637) | (86828) |
| Land use right, net | $1094493 | $1146828 |

---

Amortization expense was $13,782 and $7,333 for the six months ended March 31, 2025 and 2024, respectively.

Estimated future amortization expense for land use rights is as follows:

---

| | |
|:---|:---|
| **Years ending March 31,** | |
| 2026 | $24227 |
| 2027 | 24227 |
| 2028 | 24227 |
| 2029 | 24227 |
| 2030 | 24227 |
| Thereafter | 973358 |
|  | $1094493 |

---

**NOTE 9 — SHORT-TERM BANK LOANS**

Short-term bank loans consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2025** | **September 30,<br> 2024** |
| Industrial and Commercial Bank of China (1) | $4134000 | $4278000 |
| China Merchants Bank (2) | 1378000 | 1426000 |
| Agricultural Bank of China (3) | 2740842 | 2837740 |
| Jiangsu Bank (4) | 4134000 | 1426000 |
| China Construction Bank (5) | 2030707 | - |
| Bank of Nanjing (6) | 1309100 | 1354700 |
| Total short-term bank loans | $15726649 | $11322440 |

---

The terms of the various loan agreements related to short-term bank loans contain certain restrictive covenants which, among other things, require the Company to maintain positive net income and certain financial indicators. The terms also prohibit the Company from entering into transactions that may have a significant adverse impact on the Company's ability to fulfil its loan obligations, including but not limited to, reorganization of the Company or its subsidiaries, disposing the Company's business or assets, providing loans or guarantees to third parties, etc. The Company was in compliance with such covenants as of March 31, 2025 and September 30, 2024.

(1) On
July 31, 2024, August 12, 2024 and August 20, 2024, Changzhou Zhongjin entered into three loan agreements with Industrial and Commercial
Bank of China to borrow $1,378,000 (RMB 10.0 million), $1,378,000 (RMB 10.0 million) and $1,378,000 (RMB 10.0 million) as working capital
for one year, with a maturity date of July 28, 2025, August 5, 2025 and August 11, 2025, respectively. These loans have a fixed interest
rate of 3% per annum. One of the loans was repaid in full upon maturity.

(2) On January 3, 2024, Changzhou Zhongjin entered into a loan agreement
with China Merchants Bank to borrow $1,426,000 (RMB 10.0 million) as working capital. The loan has a fixed interest rate of 2.80%
per annum and matures in one year. The Company's major shareholder Mr. Erqi Wang, signed a maximum guarantee agreement with
China Merchants Bank to provide personal credit guarantees for the loan. The loan was repaid in full upon maturity.

On December 31, 2024, Changzhou Zhongjin entered into a loan agreement with China Merchants Bank to borrow $1,378,000 (RMB 10.0 million) as working capital for one year, with a maturity date of December 29, 2025. The loan bears a floating rate of China's Loan Prime Rate ("LPR") minus 31 basis points, with every three months adjustments starting from the loan disbursement date. In addition, Changzhou Zhongjin pledged its patent rights as collateral to guarantee the Company's loan from China Merchants Bank.

(3) On January 3, 2024, Changzhou Zhongjin entered into a loan agreement
with Agricultural Bank of China to borrow $2,837,740 (RMB 19.9 million) as working capital. The loan has a fixed interest rate
of 2.95% per annum and matures in one year. The loan was repaid in full upon maturity.

On December 19, 2024 and December 24, 2024, Changzhou Zhongjin entered into two loan agreements with Agricultural Bank of China to borrow $1,364,220 (RMB 9.9 million) and $1,376,622 (RMB 9.99 million) as working capital for one year, with a maturity date of December 18, 2025 and December 23, 2025, respectively. The loans have a fixed interest rate of 2.95% per annum.

(4) On July 30, 2024, Changzhou Zhongjin entered into a loan agreement
with Jiangsu Bank to borrow $1,378,000 (RMB 10.0 million) as working capital. The loan has a fixed interest rate of 3%
per annum and matures in one year. The loan was repaid in full upon maturity.

On March 24, 2025, Changzhou Zhongjin entered into a loan agreement with Jiangsu Bank to borrow $2,756,000 (RMB 20.0 million) as working capital, with a maturity date of October 28, 2025. The loan has a fixed interest rate of 2.8% per annum.

**NOTE 9 — SHORT-TERM BANK LOANS (continued)**

(5) On November 25, 2024, November 29, 2024 and December 27, 2024,
Taizhou Zhongjin entered into three loan agreements with China Construction Bank to borrow $661,440 (RMB 4.8 million), $716,560 (RMB
5.2 million) and $661,440 (RMB 4.8 million) as working capital for one year, with a maturity date of November 24, 2025, November 28,
2025 and December 26, 2025, respectively. The net outstanding balance of these loans was $2,030,707, net off the deferred financing cost
of $36,293. The loans have a fixed interest rate of 2.6% per annum.

On December 3, 2024, Taizhou Zhongjin entered into another loan agreement with China Construction Bank to borrow $27,560 (RMB 0.2 million) as working capital for six months, with a maturity date of June 3, 2025. The loan has a fixed interest rate of 2.95% per annum. The loan was repaid in full upon maturity.

(6) On
August 28, 2024, Taizhou Zhongjin entered into a loan agreement with Bank of Nanjing to borrow $1,309,100 (RMB 9.5 million) as working
capital for one year, with a maturity date of August 27, 2025. The loan has a fixed interest rate of 3.45% per annum. The loan is guaranteed
by the Company's major shareholder Mr. Erqi Wang. In addition, Taizhou Zhongjin pledged its patent rights as collateral to guarantee
the Company's loan from Bank of Nanjing.

The Company incurred interest expenses of $208,991 and $93,256 for the six months ended March 31, 2025 and 2024, respectively.

**NOTE 10 — RELATED PARTY TRANSACTIONS**

***a. Accounts receivable - related parties***

Accounts receivable - related parties consists of the following:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Related party relationship** | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Zhongjiankanglu Industrial Development (Shanghai) Co., Ltd. | An entity controlled by the CEO | $1179981 | $1492024 |
| Zhongjin Hongkang Medical Technology (Shanghai) Co., Ltd. | An entity controlled by the CEO | 192121 | 911987 |
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | An entity controlled by the CEO | 12158 | 141007 |
| Zhongjin Jingau Rehabilitation Equipment (Beijing) Co. Ltd. | An entity controlled by the CEO | 1295 | 1340 |
| Subtotal |  | 1385555 | 2546358 |
| Less: allowance for credit losses |  | - | - |
| Total accounts receivable, net - related parties |  | $1385555 | $2546358 |

---

**NOTE 10 — RELATED PARTY TRANSACTIONS (continued)**

***b. Due from related parties***

Due from related parties consists of the following:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Related party relationship** | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Huaniaoyuan Catering Management (Changzhou) Co. Ltd. | An entity controlled by the CEO | $128042 | $101906 |
| Mr. Erqi Wang (1) | CEO and controlling shareholder of the Company | 9508 | - |
| Total due from related parties |  | $137550 | $101906 |

---

(1) The
Company has advanced cash to the Company's CEO, Mr. Erqi Wang, for business purpose. Such advances are non-interest bearing and
due upon demand. The amount of due from a related party as of March 31, 2025 has been subsequently collected as the date of this report.

***c. Deferred revenue – related parties***

Deferred revenue – related parties consist of the following:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Related party relationship** | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Jin Med Medical (Korea) Co., Ltd. | An entity controlled by the CEO | $109784 | $121269 |
| Jinmed International Co., Ltd. | An entity controlled by the CEO | 4246 | 4394 |
| Total deferred revenue – related parties |  | $114030 | $125663 |

---

***d. Due to related parties***

Due to related parties consists of the following:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Related party relationship** | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | An entity controlled by the CEO | $253327 | $257359 |
| Shanghai Situma Intelligent Technology Co., Ltd. | Minority shareholder of Zhongjin Kangma | 21119 | 21854 |
| Changzhou Zhongjian Kanglu Information Technology Co., Ltd | An entity controlled by the CEO | 661 | 684 |
| Huaniaoyuan Environmental Engineering (Changzhou) Co., Ltd. | An entity controlled by the CEO | 634 | 656 |
| Total due to related parties |  | $275741 | $280553 |

---

The balance due to related parties was mainly comprised of advances from entities controlled by the Company's CEO and used for working capital during the Company's normal course of business. These advances are non-interest bearing and due on demand.

**NOTE 10 — RELATED PARTY TRANSACTIONS (continued)**

***e. Revenue from related parties***

Revenue from related parties consists of the following:

---

| | | | |
|:---|:---|:---|:---|
| | | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
| <br>**Name** | <br>**Related party relationship** | **2025** | **2024** |
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | An entity controlled by the CEO | $115980 | $227339 |
| Jin Med Medical (Korea) Co., Ltd. | An entity controlled by the CEO | 87066 | - |
| Zhongjiankanglu Industrial Development (Shanghai) Co., Ltd. | An entity controlled by the CEO | - | 409377 |
| Zhongjin Hongkang Medical Technology (Shanghai) Co., Ltd. | An entity controlled by the CEO | - | 539662 |
| Total revenue from related parties |  | $203046 | $1176378 |

---

**NOTE 11 — TAXES**

**(a) Corporate Income Taxes ("CIT")**

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

*<u>Cayman Islands</u>*

 

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

*<u>Hong Kong</u>*

Zhongjin HK is subject to Hong Kong profits tax at a rate of 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. However, it did not generate any assessable profits arising in or derived from Hong Kong for the six months ended March 31, 2025 and 2024, and accordingly no provision for Hong Kong profits tax has been made in these periods.

**NOTE 11 — TAXES (continued)**

**(a) Corporate Income Taxes ("CIT") (continued)**

*<u>PRC</u>*

Erhua Med, Anhui Zhongjin, Changzhou Zhongjin and its subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax. Under the Enterprise Income Tax ("EIT") Law of PRC, domestic enterprises and Foreign Investment Enterprises ("FIE") are subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemptions may be granted on case-by-case basis.

EIT grants preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Changzhou Zhongjin and Taizhou Zhongjin, the VIE and VIE's main operating subsidiary in the PRC, were approved as HNTEs and are entitled to a reduced income tax rate of 15% beginning November 2018 and November 2019, respectively, which are valid for three years. Changzhou Zhongjin successfully renewed their HNTE status with local government in November 2021 and December 2024 and continued to enjoy the reduced income tax rate of 15% for another three years. In November 2022, Taizhou Zhongjin successfully renewed its HNTE certification with local government and continued to enjoy the reduced income tax rate of 15% for another three years through November 2025.

In addition, based on the EIT Law of PRC, and according to the Announcement on Issues Related to the Implementation of Inclusive Income Tax Reduction and Exemption Policy for Small and Low Profit Enterprises issued by the State Administration of Taxation on January 18, 2019 and April 2, 2021, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB1 million is subject to a reduced rate of 5% (the rate was further reduced to 2.5% for the period from January 1, 2021 to December 31, 2022), and the portion between RMB1 million and RMB3 million is subject to a reduced rate of 10%. The policy is effective for the period from January 1, 2019 to December 31, 2022. According to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale Minimal Profit Enterprise on March 14, 2022 and March 26, 2023, the taxable income not more than RMB3 million is subject to a reduced rate of 5% during the period from January 1, 2023 to December 31, 2027. Zhongjin Jing'ao, Zhongjin Kangma and Anhui Zhongjin are qualified as a small-scale minimal profit enterprise for the six months ended March 31, 2025 and 2024.

EIT is typically governed by the local tax authority in the PRC. Each local tax authority at times may grant tax holidays to local enterprises as a way to encourage entrepreneurship and stimulate local economy. The corporate income taxes for the six months ended March 31, 2025 and 2024 were reported at a reduced rate for both Changzhou Zhongjin and Taizhou Zhongjin for being approved as HNTEs and enjoying a reduced income tax rate at 15% instead of 25%, and Zhongjin Jing'ao is qualified as a small-scale minimal profit enterprise for a further reduced income tax rate of 5%. The impact of the tax holidays noted above decreased the Company's income taxes by $80,901 and $294,310 for the six months ended March 31, 2025 and 2024, respectively. The effect of the tax holidays on net income per share (basic and diluted) was immaterial for the six months ended March 31, 2025 and 2024.

**NOTE 11 — TAXES (continued)**

**(a) Corporate Income Taxes ("CIT") (continued)**

The components of the income tax provision are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31** | **For the Six Months Ended<br> March 31** |
|  | **2025** | **2024** |
| Current tax provision |  |  |
| BVI | $- | $- |
| Hong Kong | - | - |
| PRC | 36837 | 285302 |
|  | 36837 | 285302 |
| Deferred tax (benefit) provision |  |  |
| BVI | - | - |
| Hong Kong | - | - |
| PRC | (17271) | 23711 |
|  | (17271) | 23711 |
| Income tax provision | $19566 | $309013 |

---

Deferred tax assets, net are composed of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30,<br> 2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Net operating loss carry-forwards | $99880 | $367554 |
| &nbsp;&nbsp;&nbsp;Inventory written down | 128929 | 119930 |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses | 16212 | 12458 |
| &nbsp;&nbsp;&nbsp;Total | 245021 | 499942 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (110574) | (378620) |
| Total deferred tax assets, net | $134447 | $121322 |

---

Movement of the valuation allowance:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **September 30, <br> 2024** |
| Beginning balance | $378620 | $15688 |
| Current year (reduction) addition | (256227) | 353156 |
| Exchange difference | (11819) | 9776 |
| Ending balance | $110574 | $378620 |

---

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company's future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings in Zhongjin Jing'ao, Zhongjin Kangma and Anhui Zhongjin. The Company provided a 100% allowance for their deferred tax assets as of March 31, 2025.

**NOTE 11 — TAXES (continued)**

**(a) Corporate Income Taxes ("CIT") (continued)**

The following table reconciles the China statutory rates to the Company's effective tax rate for the six months ended March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2025** | **2024** |
| China Income tax statutory rate | 25.0% | 25.0% |
| Effect of PRC tax holiday | 71.9% | (14.6)% |
| Permanent difference | 30.3% | - |
| Research and development tax credit | (347.1)% | (6.8)% |
| Non-PRC entity not subject PRC income tax | 206.5% | 5.7% |
| Change in valuation allowance | 81.9% | 6.5% |
| Others | - | (0.5)% |
| Effective tax rate | 68.5% | 15.3% |

---

The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of March 31, 2025, all of the Company's tax returns of its PRC Subsidiaries remain open for statutory examination by PRC tax authorities.

**(b) Taxes payable**

Taxes payable consist of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2025** | **September 30, <br> 2024** |
| Income tax payable | $608316 | $809389 |
| Value added tax payable | - | 306183 |
| Other taxes payable | - | 8001 |
| Total taxes payable | $608316 | $1123573 |

---

**NOTE 12 — CONCENTRATIONS**

A majority of the Company's revenue and expense transactions are denominated in RMB and a significant portion of the Company's assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB may require certain supporting documentation in order to effect the remittance.

As of March 31, 2025 and September 30, 2024, $12,431 and $231,811 of the Company's cash was deposited at financial institutions outside of PRC, $11,109,782 and $7,895,710 of the Company's cash was on deposit at financial institutions in mainland China, and $1,274 and $1,540 of the Company's cash was on deposit at financial institutions in Hong Kong. None of the Company cash deposited at financial institutions maintain insurance to cover bank deposits in the event of bank failure. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash on bank accounts. For the six months ended March 31, 2025 and 2024, the Company's substantial assets were located in the PRC and all of the Company's revenues were derived from its subsidiaries located in the PRC.

**NOTE 12 — CONCENTRATIONS (continued)**

For the six months ended March 31, 2025 and 2024, one customer accounted for approximately 57.1% and 53.7% of the Company's total revenue. Sales to the subsidiaries of this customer accounted for approximately 9.9% and 5.7% of the Company's total revenue for the six months ended March 31, 2025 and 2024, respectively. In aggregate, sales to this customer and its subsidiaries represent approximately 67.0% and 59.4% of the Company's total revenue for the six months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, four customers accounted for 36.5%, 23.4%, 20.6% and 10.9% of the accounts receivable balance. As of September 30, 2024, four customers accounted for 28.3%, 24.4%, 17.5% and 10.6% of the accounts receivable balance.

For the six months ended March 31, 2025 and 2024, no supplier accounted for more than 10% of the Company's total purchases, respectively.

As of March 31, 2025 and September 30, 2024, one supplier accounted for 13.8% and 10.3% of the accounts payable balance, respectively.

**NOTE 13 — SHAREHOLDERS' EQUITY**

 ****

***Ordinary Shares***

On February 8, 2024, the Company formally executed a forward stock split of its ordinary shares at a ratio of one pre-split ordinary share to 20 post-split ordinary shares. After the stock split, the authorized number of ordinary shares became 1,000,000,000, increased from 50,000,000 pre-split shares. The par value changed from $0.001 to $0.00005 accordingly. The number of shares and per share data are presented herein have been retroactively adjusted to give effect to the stock split.

Upon the incorporation of the Company, 400,000,000 ordinary shares were issued. On October 28, 2022, the original shareholders of the Company surrendered 265,000,000 ordinary shares for no consideration. As a result, on a retrospective basis, 135,000,000 ordinary shares were issued and outstanding as of September 30, 2022 and 2021.

***Initial Public Offering***

On March 30, 2023, the Company closed its initial public offering (the "Offering") of 20,000,000 ordinary shares at a public offering price of $0.4 per share for total gross proceeds of $8,000,000 before deducting underwriting discounts and offering expenses. Net proceeds of the Company's Offering were approximately $6.8 million. In addition, the Company granted the underwriters a 45-day option to purchase up to an additional 3,000,000 ordinary shares at the public offering price, less underwriting discounts, to cover over-allotment, if any. On April 6, 2023, the underwriter partially exercised the over-allotment option to purchase an additional 947,100 ordinary shares for total gross proceeds of $378,840 before deducting underwriting discounts and commissions. As of May 14, 2023, the remaining options were expired. The Company's ordinary shares began trading on the Nasdaq Capital Market under the symbol "ZJYL" on March 28, 2023.

**NOTE 13 — SHAREHOLDERS' EQUITY (continued)**

***Statutory reserve and restricted net assets***

 **

The Company's PRC subsidiaries, VIE and VIE's subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China.

The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC ("PRC GAAP"). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends.

Relevant PRC laws and regulations restrict the Company's PRC subsidiaries, VIE and VIE's subsidiaries from transferring a portion of their net assets, equivalent to their statutory reserves and their share capital, to the Company's shareholders in the form of loans, advances or cash dividends. Only PRC entities' accumulated profits may be distributed as dividends to the Company's shareholders without the consent of a third party. As of March 31, 2025 and September 30, 2024, the restricted amounts as determined pursuant to PRC statutory laws totaled $2,664,549 and $2,593,076, respectively, and total restricted net assets amounted to $2,751,108 and $2,679,635, respectively.

**NOTE 14 — COMMITMENTS AND CONTINGENCIES**

***Contingencies***

 ****

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company's management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate to have a material adverse impact on the Company's unaudited condensed consolidated financial position, results of operations and cash flows. The Company currently does not have any material legal proceedings.

***Capital commitment***

The Company entered into a subcontract agreement for the construction of a new manufacturing facility in Chuzhou City, Anhui, to expand the production capacity for our premium mobility products, particularly mid-to-high-end electric wheelchairs and senior mobility scooters. The total future minimum capital commitment contracted as of March 31, 2025 are payables as follows:

---

| | |
|:---|:---|
| **Twelve months ending March 31,** | |
| 2026 | $6143673 |
| 2027 | 1626434 |
| 2028 | - |
| 2029 | 94804 |
| 2030 | - |
| Thereafter | 189607 |
|  | $8054518 |

---

**NOTE 15 — SEGMENT REPORTING**

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

The management of the Company concludes that it has only one reporting segment. The Company designs and manufactures quality wheelchair and other living aids products. The Company's products have similar economic characteristics with respect to raw materials, vendors, marketing and promotions, customers and methods of distribution. The Company's chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, rather than by product types or geographic area; hence the Company has only one reporting segment.

**NOTE 16 — SUBSEQUENT EVENTS**

On June 23, 2025, Changzhou Zhongjin entered into a loan agreement with Industrial and Commercial Bank of China to borrow an aggregate principal amount of $2,756,000 (RMB 20.0 million) as working capital for one year, pursuant to which, the loan shall be disbursed in two tranches. On June 24, 2025 and July 15, 2025, Changzhou Zhongjin received the loans of $1,378,000 (RMB 10.0 million) and $1,378,000 (RMB 10.0 million) with a maturity date of June 15, 2026 and June 22, 2026, respectively. The loans have a fixed interest rate of 2.8% per annum.

The Company evaluated the subsequent events through August 20, 2025, which is the date of the issuance of these unaudited condensed consolidated financial statements, and concluded that there are no additional subsequent events except disclosed above that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

## Exhibit 99.2

**Exhibit 99.2**

**OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*The following discussion of the financial condition and results of operations is based upon and should be read in conjunction with the unaudited financial results and statements of Jin Medical International Ltd. (the "Company," "we," "our," or "us") for the six (6) months ended March 31, 2025, furnished as Exhibit 99.1. to this report.*

**Overview**

Jin Medical International Ltd. through the China-based VIE, Changzhou Zhongjin, and its subsidiaries, design and manufacture wheelchairs and living aids products for people with disabilities, the elderly, and people recovering from injury. Our business focuses primarily on wheelchairs. Currently, our living aids products are only sold to a few selected customers to test the markets for these products. The majority of our products are sold to dealers in Japan and China, while a small number of our products are also sold to dealers located in other regions including the United States, Canada, Australia, Korea, Israel, Singapore, and others.

**Key Financial Performance Indicators**

We consider a variety of financial and operating measures in assessing the performance of our business. The key financial performance measures we use are revenue, gross profit and gross margin, operating expenses, and operating income. Our review of these indicators facilitates timely evaluation of the performance of our business and effective communication of results and key decisions, allowing our business to respond promptly to competitive market conditions and different demands and preferences from our customers. The key measures that we use to evaluate the performance of our business are set forth below and are discussed in greater details under "A. Operating Results".

*Revenue*

Our revenue is derived primarily from sales of wheelchairs, wheelchair components and living aids products, and healthcare products. We rely to a significant extent on our network of dealers to sell our products to end customers. We distribute approximately 98% of our products through qualified dealers. Our revenue is therefore affected by our ability to establish new relationships and maintain relationships with existing dealers. In addition, revenue is also impacted by competition, current economic conditions, pricing, inflation, and fluctuations in foreign currencies.

*Gross Profit and Gross Margin*

Gross profit is the difference between revenue and cost of revenue. Our cost of revenue consists of raw materials, direct labor and other related production overhead. Raw materials account for the largest portion of our cost of revenue. Supplies and prices of our various raw materials can be affected by worldwide supply and demand factors, as well as other factors beyond our control such as financial market trends. We purchase, directly and indirectly through third-party suppliers, significant amounts of aluminum, steel, plastics, titanium alloys, as well as other commodity-sensitive raw materials annually. In particular, in past years, steel and aluminum prices have experienced volatility which has been unforeseen and unexpected. Raw material price fluctuations may adversely affect our operating results and profitability. From time to time, we purchase and store steel, iron, aluminum, and other raw materials up to 3 months in advance to provide economic buffers regarding portions of our pricing and supply. Due to the impact of Covid-19, some of our wheelchair components, such as tires, we had placed orders up to 6 months in advance from suppliers in Taiwan and Japan since October 2021. However, the orders from these suppliers have returned to 3 months for delivery since February 2023. For the majority of our raw material purchases we do not typically enter into any fixed-price contracts and may not be able to accurately anticipate future raw material prices for those inputs.

Over the past years, we have invested significant time and energy to achieve cost reduction and productivity improvement in our supply chain. We have focused on reducing raw materials costs through increased volume buying, direct purchasing, and price negotiations. In addition, we achieve manufacturing efficiency by standardizing and optimizing certain procedures across our production cycle such as procurement, engineering and product development, manufacturing, dealer management, and pricing. On the other hand, labor is a primary component in the cost of operating our business. Increased labor costs due to competition, increased minimum wage or employee benefits costs, or otherwise, would adversely impact our operating expenses. And our success also depends on our ability to attract, motivate, and retain qualified employees, including senior management and technically competent employees, to keep pace with our growth strategy.

Gross margin is gross profit divided by revenue. Gross margin is a measure used by management to indicate whether we are selling our products at an appropriate gross profit. Our gross margin is impacted by our product mix and availability, as some new or high-end products generally provide higher gross margins. Gross margin is also impacted by prices of our products. We consider many factors such as cost of revenue increases and competitive pricing strategies. We have historically been able to launch new products with higher prices, and these new products can reflect market trends and are designed to meet customer new demand. To achieve this, we seek to maintain continued focus on our R&D efforts that we believe will enhance our existing market positions and allow us to compete into new, attractive, wheelchair and other living aids products categories.

*Operating Expenses*

Our operating expenses consist of selling expenses, general and administrative expenses and research and development expenses.

 ****

Our selling expenses primarily include salaries and welfare benefit expenses paid to our sales personnel, advertising expenses to increase our brand awareness, shipping and delivery expenses, expenses incurred for export and custom clearance, our business travel, meals and other sales promotion and marketing activities related expenses. Our selling expenses accounted for 7.6% and 3.4% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. We expect that our overall selling expenses, including but not limited to, advertising expenses and brand promotion expenses, will continue to increase in the foreseeable future if our business further grows.

Our general and administrative expenses primarily consist of employee salaries, welfare and insurance expenses, depreciation, bad debt reserve expenses, inspection and maintenance expenses, office supply and utility expenses, business travel and meal expenses and professional service expenses. General and administrative expenses were 14.7% and 14.6% of our revenue for the six months ended March 31, 2025 and 2024, respectively. Our general and administrative expenses decreased by 5.9% for the six months ended March 31, 2025 as compared to the same period last year, however, we will incur additional expenses in connection with the expansion of our business operations, we expect our general and administrative expenses, including, but not limited to, business consulting expenses, to continue to increase in the foreseeable future. We also expect our professional fees for legal, audit, and advisory services to increase after we became a public company upon the completion of initial public offering.

Our research and development expenses primarily consist of salaries, welfare and insurance expenses paid to our employees involved in the research and development activities, materials and supplies used in the development and testing new wheelchair and living aids products, depreciation and other miscellaneous expenses. Research and development expenses were 6.7% and 5.8% of our revenue for the six months ended March 31, 2025 and 2024, respectively. As we continue to develop new products and diversify our product offerings to satisfy customer demand, we expect our research and development expenses to increase in the foreseeable future.

*Operating Income*

Operating income is the difference between gross profit and operating expenses. Operating income excludes interest income, other income, and income tax expenses. We use operating income as an indicator of the productivity of our business and our ability to manage expenses.

A. <u>Operating Results</u>

***Comparison of Results of Operations for the Six Months Ended March 31, 2025 and 2024***

The following table summarizes the results of our operations during the six months ended March 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended <br> March 31,** | **For the six months ended <br> March 31,** | **Variance** | **Variance** |
|  | **2025** | **2024** | **Amount** | **%** |
| Revenue | $9881505 | $10556891 | $(675386) | (6.4)% |
| Cost of revenue and related tax | 7478983 | 6820561 | 658422 | 9.7% |
| &nbsp;&nbsp;&nbsp;**Gross profit** | **2402522** | **3736330** | **(1333808)** | **(35.7)%** |
| **OPERATING EXPENSES** |  |  |  |  |
| Selling expenses | 747258 | 358768 | 388490 | 108.3% |
| General and administrative expenses | 1448590 | 1538680 | (90090) | (5.9)% |
| Research and development expenses | 660886 | 609645 | 51241 | 8.4% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 2856734 | 2507093 | 349641 | 13.9% |
| **INCOME (LOSS) FROM OPERATIONS** | **(454212)** | **1229237** | **(1683449)** | **(137.0)%** |
| **OTHER INCOME** |  |  |  |  |
| Interest income, net | 301535 | 681588 | (380053) | (55.8)% |
| Foreign exchange gain | 58857 | 414 | 58443 | 14116.7% |
| Other income, net | 122384 | 102164 | 20220 | 19.8% |
| &nbsp;&nbsp;&nbsp;Total other income, net | 482776 | 784166 | (301390) | (38.4)% |
| **INCOME BEFORE INCOME TAX PROVISION** | **28564** | **2013403** | **(1984839)** | **(98.6)%** |
| **INCOME TAX PROVISION** | 19566 | 309013 | (289447) | (93.7)% |
| **NET INCOME** | **8998** | **1704390** | **(1695392)** | **(99.5)%** |
| &nbsp;&nbsp;&nbsp;Less: net income (loss) attributable to non-controlling interest | 98006 | (89704) | 187710 | (209.3)% |
| **NET INCOME (LOSS) ATTRIBUTABLE TO JIN MEDICAL INTERNATIONAL LTD.** | **(89008)** | **1794094** | **(1883102)** | **(105.0)%** |

---

 ****

***Revenues***

We generate revenue primarily from wheelchair products, wheelchair components and other products such as living aids products, as well as healthcare products, and these products are sold in Japan, China and other countries. Our wheelchair products consist primarily of manual wheelchairs. Our products also consist of living aids products such as oxygen concentrators, bath aids, rehabilitative devices and shared healthcare products and related infrastructures, as well as healthcare products including micro hyperbaric chambers and scientific cosmetic products. Total revenue decreased by $675,386, or 6.4%, from $10,556,891 for the six months ended March 31, 2024 to $9,881,505 for the six months ended March 31, 2025.

The following table sets forth the breakdown of our revenue for the six months ended March 31, 2025 and 2024, respectively:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **Amount** | **Amount** | **Amount** | **%** |
| Wheelchair | $7261231 | $7694373 | $(433142) | (5.6)% |
| Wheelchair components | 991901 | 842681 | 149220 | 17.7% |
| Other products | 1628373 | 2019837 | (391464) | (19.4)% |
| **Total revenue** | $**9881505** | $**10556891** | $**(675386)** | **(6.4)%** |

---

Revenue from wheelchair products accounted for 73.5% and 72.9% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. Revenue from wheelchair products decreased by $433,142, or 5.6%, from $7,694,373 for the six months ended March 31, 2024 to $7,261,231 for the six months ended March 31, 2025. The decrease was mainly due to decreased sales of wheelchair products to our largest customer Nissin in Japan. Nissin purchases wheelchair products from us in RMB and sell them in Japanese Yen in Japan. However, due to the overall weakening of the Japanese Yen since October 2023, profitability of Nissin was negatively impacted as their cost of wheelchair products increased. As a result, sales orders we received from Nissin decreased, and total sales to Nissin and its subsidiaries decreased by approximately $665,000 during the six months ended March 31, 2025. However, the decrease was partially offset by the increased revenue from some new customers we developed during the six months ended March 31, 2025. The Japanese yen has gradually appreciated against RMB since the beginning of 2025, and the management expects the impact of foreign currency fluctuation on our revenue from Nissin is temporary.

Revenue from wheelchair components accounted for 10.0% and 8.0% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. Revenue from wheelchair components increased by $149,220, or 17.7%, from $842,681 for the six months ended March 31, 2024 to $991,901 for the six months ended March 31, 2025. The increase was mainly due to more sales orders of wheelchair components we received during the six months ended March 31, 2025. Wheelchair components are ordered by our customers for their repair and maintenance purposes, and such orders fluctuate based on their estimated further demands.

Revenue from other products accounted for 16.5% and 19.1% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. Revenue from other products decreased by $391,464, or 19.4%, from $2,019,837 for the six months ended March 31, 2024 to $1,628,373 for the six months ended March 31, 2025. The decrease was mainly due to the decreased revenue of $1,179,869 from nano products, micro hyperbaric oxygen chamber products and other products during the six months ended March 31, 2025. And the decrease was partially offset by the increased revenue of $788,405 from electric scooters. We have been continuously increasing research and development activities towards new products development, and expect the sales of our other products will grow in the coming years.

 **

***Cost of Revenues and Related Tax***

 **

Our cost of revenues and related tax primarily consists of inventory costs (raw materials, labor, packaging cost, depreciation and amortization, third-party products purchase price, freight costs and overhead) and business tax. Cost of revenues and related tax generally changes as our production costs change, which are affected by factors including the market price of raw materials, labor productivity, etc. Our overall cost of revenue and related tax increased by $658,422, or 9.7%, from $6,820,561 for the six months ended March 31, 2024 to $7,478,983 for the six months ended March 31, 2025.

The following table sets forth the breakdown of our cost of revenue and related tax for the six months ended March 31, 2025 and 2024, respectively:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **Amount** | **Amount** | **Amount** | **%** |
| Wheelchair | $5538233 | $5184260 | $353973 | 6.8% |
| Wheelchair components | 752294 | 640079 | 112215 | 17.5% |
| Other products | 1188456 | 996222 | 192234 | 19.3% |
| **Total revenue** | $**7478983** | $**6820561** | $**658422** | **9.7%** |

---

Cost of revenue and related tax from wheelchair products increased by $353,973, or 6.8%, from $5,184,260 for the six months ended March 31, 2024 to $5,538,233 for the six months ended March 31, 2025. The cost of revenue and related tax increased despite the decreased revenue during the same period, due to the increased fixed cost per unit, and the utilization of certain high-unit-price components for our standard and economy wheelchair products, as discussed in greater details below.

Cost of revenue and related tax from wheelchair components increased by $112,215, or 17.5%, from $640,079 for the six months ended March 31, 2024 to $752,294 for the six months ended March 31, 2025. The increase in cost of revenue and related tax from wheelchair components was largely in line with the increase in revenue from wheelchair components.

Cost of revenue and related tax from other products increased by $192,234, or 19.3%, from $996,222 for the six months ended March 31, 2024 to $1,188,456 for the six months ended March 31, 2025. The cost of revenue and related tax increased despite the decreased revenue during the same period, due to the increased sale of electric scooters that have lower gross margin, as discussed in greater details below.

***Gross profit***

Our gross profit decreased by $1,333,808, or 35.7%, from $3,736,330 for the six months ended March 31, 2024 to $2,402,522 for the six months ended March 31, 2025. The decrease was mainly attributable to the decreased gross profit from wheelchair products and other products, which was partially offset by the increased gross profit from wheelchair components. Our gross margin decreased by 11.1 percentage points from 35.4% for the six months ended March 31, 2024 to 24.3% for the six months ended March 31, 2025.

The following table sets forth the breakdown of our gross profit for the six months ended March 31, 2025 and 2024, respectively:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Variance** | **Variance** |
|  | **2025** | **Margin %** | **2024** | **Margin %** | **Amount** | **%** |
| Wheelchair | $1722998 | 23.7% | $2510113 | 32.6% | $(787115) | (31.4)% |
| Wheelchair components | 239607 | 24.2% | 202602 | 24.0% | 37005 | 18.3% |
| Other products | 439917 | 27.0% | 1023615 | 50.7% | (583698) | (57.0)% |
| **Total Gross Profit and Margin %** | $**2402522** | **24.3%** | $**3736330** | **35.4%** | $**(1333808)** | **(35.7)%** |

---

The gross profit of wheelchair products decreased by $787,115, or 31.4%, from $2,510,113 for the six months ended March 31, 2024 to $1,722,998 for the six months ended March 31, 2025, which was due to the decrease in revenue from wheelchair products. The gross margin decreased by 8.9% from 32.6% for the six months ended March 31, 2024 to 23.7% for the six months ended March 31, 2025. Sales orders for wheelchair products declined as discussed above, but the fixed cost we incurred remained stable, which led to the increased fixed cost per unit for the six months ended March 31, 2025. Furthermore, the decrease in gross margin was attributable to the utilization of certain high-unit-price components for our standard and economy wheelchair products, which did not increase the selling price but led to higher variable costs for these wheelchairs, in order to enhance inventory turnover efficiency.

The gross profit of wheelchair components increased by $37,005, or 18.3%, from $202,602 for the six months ended March 31, 2024 to $239,607 for the six months ended March 31, 2025, which was due to the increase in revenue from wheelchair components. The gross margin remained relatively stable with a slighted increase of 0.2% from 24.0% for the six months ended March 31, 2024 to 24.2% for the six months ended March 31, 2025.

The gross profit of other products decreased by $583,698, or 57.0%, from $1,023,615 for the six months ended March 31, 2024 to $439,917 for the six months ended March 31, 2025, which was due to decrease in the revenue of other products. The gross margin of other products decreased by 23.7% from 50.7% for the six months ended March 31, 2024 to 27.0% for the six months ended March 31, 2025. The decrease was primarily due to the increased sales of electric scooters that have lower gross margin. The decrease in gross margin was also attributable to the decreased sales of nano products, micro hyperbaric oxygen chamber products with higher gross margin during the six months ended March 31, 2025.

***Operating expenses***

The following table sets forth the breakdown of our operating expenses for the six months ended March 31, 2025 and 2024, respectively:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** |
|  | **2025** | **2025** | **2024** | **2024** | **Variance** | **Variance** |
|  | **Amount** | **% of revenue** | **Amount** | **% of revenue** | **Amount** | **%** |
| **Total revenue** | $9881505 | 100.0% | $10556891 | 100.0% | $(675386) | (6.4)% |
| Operating expenses: |  |  |  |  |  |  |
| Selling expenses | 747258 | 7.6% | 358768 | 3.4% | 388490 | 108.3% |
| General and administrative expenses | 1448590 | 14.7% | 1538680 | 14.6% | (90090) | (5.9)% |
| Research and development expenses | 660886 | 6.7% | 609645 | 5.8% | 51241 | 8.4% |
| **Total operating expenses** | $**2856734** | **28.9%** | $**2507093** | **23.7%** | $**349641** | **13.9%** |

---

***Selling expenses***

Our selling expenses primarily include salaries and welfare benefit expenses paid to our sales personnel, advertising expenses to increase our brand awareness, shipping and delivery expenses, expenses incurred for export and custom clearance, our business travel, meals and other sales promotion and marketing activities related expenses.

Our selling expenses increased by $388,490, or 108.3%, from $358,768 for the six months ended March 31, 2024 to $747,258 for the six months ended March 31, 2025. The increase was primarily attributable to higher selling expenses generated by our newly incorporated subsidiary Zhongjin Kangma in the six months ended March 31, 2025, as Zhongjin Kangma had relatively lower selling expenses in the initial period of business operation during the six months ended March 31, 2024. The increase in selling expenses of Zhongjin Kangma was mainly due to the increased promotion expenses of $223,094 as we launched online stores in multiple online shopping platforms and incurred higher promotion expenses in connection with introduction and promotion of our products to customers. Meanwhile, Zhongjin Kangma hired additional sales staff due to the business expansion which led to an increased salaries and welfare benefit expenses of $115,520. As a percentage of revenues, our selling expenses accounted for 7.6% and 3.4% of our total revenue for the six months ended March 31, 2025 and 2024, respectively.

 ****

***General and administrative expenses***

Our general and administrative expenses primarily consist of employee salaries, welfare and insurance expenses, depreciation, bad debt reserve expenses, inspection and maintenance expenses, office supply and utility expenses, business travel and meals expenses and professional service expenses.

Our general and administrative expenses decreased by $90,090, or 5.9%, from $1,538,680 for the six months ended March 31, 2024 to $1,448,590 for the six months ended March 31, 2025. The decrease was primarily due to the decrease in business consulting expenses, as we incurred business consulting expenses of $163,092 for the expansion of our business operations during the six months ended March 31, 2024, however, no such expenses incurred during the six months ended March 31, 2025. The decrease in general and administrative expenses was partially offset by the increase in audit, legal and accounting related professional service fee of $75,706. As a percentage of revenues, our general and administrative expenses accounted for 14.7% and 14.6% of our total revenue for the six months ended March 31, 2025 and 2024, respectively.

***Research and development expenses***

Our research and development expenses primarily consist of salaries, welfare and insurance expenses paid to our employees involved in the research and development activities, materials and supplies used in the development and testing new wheelchair products, depreciation and other miscellaneous expenses.

Our research and development expenses increased by $51,241, or, 8.4%, from $609,645 for the six months ended March 31, 2024 to $660,886 for the six months ended March 31, 2025. The increase is primarily attributable to the increased research and development activities towards products development, and we invested in more manpower and materials during the six months ended March 31, 2025. As a percentage of revenues, research and development expenses accounted for 6.7% and 5.8% of our total revenue for the six months ended March 31, 2025 and 2024, respectively.

***Other income***

 ****

Our other income primarily includes interest expenses incurred on our short-term bank loans, interest income from our short-term investments, foreign exchange transaction gain (loss), government subsidies and others.

Our net interest income decreased by $380,053, or 55.8%, from net interest income of $681,588 for the six months ended March 31, 2024 to net interest income of $301,535 for the six months ended March 31, 2025. The decrease in interest income was primarily due to the decrease in interest income of $286,908, as a result of the short-term investments with lower rates of return during the six months ended March 31, 2025. The decrease in net interest income was also attributable to the increase in interest expenses of $79,311, which was in line with the increased weighted average loan balance during the six months ended March 31, 2025.

Our foreign exchange transaction gain was $58,857 for the six months ended March 31, 2025, as compared to a foreign exchange transaction gain of $414 for the six months ended March 31, 2024, primarily due to the fluctuation in foreign exchange rate on our cash in bank, accounts receivables and accounts payable that denominated in foreign currencies such as U.S. dollars and Japanese Yen during the six months ended March 31, 2025.

Our net other income was $122,384 for the six months ended March 31, 2025 as compared to $102,164 for the six months ended March 31, 2024. The increase in net other income was mainly due to the increased government subsidies we received during the six months ended March 31, 2025.

***Provision for income taxes***

Our provision for income taxes was $19,566 for the six months ended March 31, 2025, a decrease of $289,447, or 93.7%, from $309,013 for the six months ended March 31, 2024, primarily due to the decreased current income tax expenses resulting from decreased taxable income of Changzhou Zhongjin and Taizhou Zhongjin. The decrease was also attributable to the decreased deferred income tax expense for the six months ended March 31, 2025.

***Net income***

As a result of the foregoing, we reported a net income of $8,998 for the six months ended March 31, 2025, representing a $1,695,392, or 99.5% decrease from a net income of $1,704,390 for the six months ended March 31, 2024.

***Net income (loss) attributable to non-controlling interest***

Changzhou Zhongjin owns an equity interest of 80% of Zhongjin Kangma which was incorporated on August 21, 2023. Accordingly, we recorded non-controlling interest income (loss) attributed to non-controlling shareholder of Zhongjin Kangma. The net income attributable to non-controlling interest increased by $187,710, or 209.3% from net loss of $89,704 for the six months ended March 31, 2024 to net income of $98,006 for the six months ended March 31, 2025.

***Net income (loss) attributable to Jin Medical International Ltd.***

As a result of the foregoing, we reported a net loss attributable to Jin Medical International Ltd. of $89,008 for the six months ended March 31, 2025, representing a $1,883,102, or 105.0% decrease from a net income attributable to Jin Medical International Ltd. of $1,794,094 for the six months ended March 31, 2024.

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

Prior to the 20-for-1 forward stock split as mentioned below, on March 30, 2023, we closed our initial public offering (the "Offering") of 1,000,000 ordinary shares, par value $0.001 per share (the "Ordinary Shares"), at a public offering price of $8.00 per share for total gross proceeds of $8.0 million before deducting underwriting discounts and offering expenses. Net proceeds of our Offering were approximately $6.8 million. In addition, we granted the representative of the underwriters a 45-day option to purchase up to an additional 150,000 Ordinary Shares at the public offering price. On April 6, 2023, the representative of the underwriters partially exercised the over-allotment option to purchase an additional 47,355 Ordinary Shares at the Offering price of $8.00 per share for total gross proceeds of $378,840 before deducting underwriting discounts and commissions. Our Ordinary Shares commenced trading under the symbol "ZJYL" on the Nasdaq Capital Market on March 28, 2023.

On January 30, 2024, the Company's shareholders approved a 20-for-1 forward split of the Company's ordinary shares to subdivide each of the issued and unissued ordinary shares with a par value of US$0.001 each in the capital of the Company into twenty (20) ordinary shares with a par value of US$0.00005 each (the "Subdivision"), such that, following the Subdivision, the authorized share capital of the Company is US$50,000 divided into 1,000,000,000 shares with a par value of US$0.00005 each. No fractional shares will be issued in connection with the Subdivision. On February 2, 2024, the board of directors approved a market effective date of February 8, 2024. As a result of the Subdivision, the Company's shares and per share data as reflected in the unaudited condensed consolidated financial statements were retroactively restated as if the transaction occurred at the beginning of the periods presented.

Substantially all of our operations are conducted in China and all of our revenue, expenses, cash are denominated 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 suppliers' invoices, shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict the ability of our PRC operating entities to transfer their net assets to us through loans, advances or cash dividends. See *Risk Factors - Government control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.* Furthermore, as an offshore holding company with PRC entities, we may only transfer funds to or finance our PRC operating entities by means of loans or capital contributions. Any capital contributions or loans that we make to our PRC operating entities, including from the proceeds of this offering, are subject to PRC regulations and approvals. See *Risk Factors - PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from this offering and/or future financing activities to make loans or additional capital contributions to our PRC operating entities.*

As of March 31, 2025, we had $11,131,890 in cash as compared to $8,136,179 as of September 30, 2024, and $19,824,675 in short-term investments as compared to $18,621,251 as of September 30, 2024. In addition, we had $15,726,649 in short-term bank loans as of March 31, 2025 as compared to $11,322,440 as of September 30, 2024. During the six months ended March 31, 2025, we borrowed additional bank loans to fund the construction of our new manufacturing facilities. Detailed construction plans are provided below. The management expects that the Company will be able to renew its existing bank loans upon their maturity based on past experience and its good credit history.

We also had $4,238,724 in accounts receivable as compared to $5,912,035 as of September 30, 2024. Approximately 59.3%, or $2.5 million of the March 31, 2025 balance have been subsequently collected. The remaining balance of approximately $1.7 million is expected to be collected before March 31, 2026. Collected accounts receivable will be used as working capital in our operations.

On October 18, 2024, we entered into a subcontract agreement for the construction of a new manufacturing facility in Chuzhou City, Anhui, to expand the production capacity for our premium mobility products, particularly mid-to-high-end electric wheelchairs and senior mobility scooters. The investment budget for the new manufacturing facility is approximately RMB73.2 million (approximately $10.1 million) after VAT deduction. The construction is expected to be completed in October 2025. As of March 31, 2025, our contractual obligation under the manufacturing facility construction was approximately RMB58.4 million (approximately $8.1 million). As of March 31, 2025, we had spent approximately RMB14.8 million (approximately $2.0 million), and from April 2025 to the date of this report, the subsequent payment was RMB7.6 million (approximately $1.1 million), and the future minimum expenditure is estimated to be RMB50.8 million (approximately $7.0 million). We plan to support the future construction through cash flows from operations, borrowings from banks and the proceeds received from the additional equity securities, if necessary.

As of March 31, 2025, our working capital balance was approximately $23.0 million. In assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue in the future, and our operating and capital expenditure commitments. We believe that our current cash and cash flows provided by operating activities and borrowings from banks will be sufficient to meet our working capital needs and the construction of new manufacturing facilities in the foreseeable future. However, if we were to experience an adverse operating environment or incur unanticipated capital expenditures, or if we decided to accelerate our growth, then additional financing may be required. Our capital expenditures, including infrastructure to support ongoing operational initiatives have been and will continue to be significant. We cannot guarantee, however, that additional financing, if required, would be available at all or on favorable terms. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders.

In the coming years, we will be looking to financing sources, such as additional bank loans and equity financing, to meet our cash needs. While facing uncertainties in regards to the size and timing of capital raises, we are confident that we can continue to meet operational needs mainly by utilizing cash flows generated from our operating activities and shareholder working capital funding, as necessary.

**Cash Flows**

**Six Months ended March 31, 2025 and 2024**

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

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> March 31,** | **For the six months ended <br> March 31,** |
|  | **2025** | **2024** |
| Net cash provided by operating activities | $2562029 | $49997 |
| Net cash used in investing activities | (4188764) | (4149238) |
| Net cash provided by financing activities | 4901089 | 6004298 |
| Effect of exchange rate change on cash | (278643) | 40337 |
| Net increase in cash | 2995711 | 1945394 |
| Cash, beginning of period | 8136179 | 6929508 |
| Cash, end of period | $11131890 | $8874902 |

---

***Operating Activities***

 ****

Net cash provided by operating activities was $2,562,029 for the six months ended March 31, 2025, mainly derived from a net income of $8,998 for the period, and net changes in our operating assets and liabilities, which mainly included a decrease in accounts receivable of $2,530,731, a decrease in inventories of $546,225 and a decrease in taxes payable of $516,710 during the six months ended March 31, 2025.

Net cash provided by operating activities was $49,997 for the six months ended March 31, 2024, mainly derived from a net income of $1,704,390 for the period, and net changes in our operating assets and liabilities, which mainly included an increase in prepaid expenses and other current assets of $1,308,346 and a decrease in accounts payable of $278,216 during the six months ended March 31, 2024.

 

***Investing Activities***

Net cash used in investing activities amounted to $4,188,764 for the six months ended March 31, 2025, and primarily included the payments for short-term investments of $5,280,383, purchase of property, plant and equipment of $2,051,134 and prepayment for business acquisition of $500,000, which were partially offset by the redemption of short-term investments of $3,642,753.

Net cash used in investing activities amounted to $4,149,238 for the six months ended March 31, 2024, and primarily included the payments for short-term investments of $16,136,000 and purchase of land-use right of $980,692, which were partially offset by the redemption of short-term investments of $8,810,675 and repayment of advances made to related parties of $4,240,111.

 ****

***Financing Activities***

Net cash provided by financing activities amounted to $4,901,089 for the six months ended March 31, 2025, which included proceeds from short-term bank loans of $9,335,497, which was partially offset by repayments of short-term bank loans of $4,532,805.

Net cash provided by financing activities amounted to $6,004,298 for the six months ended March 31, 2024, which included net proceeds from sale of Ordinary Shares of $311,995 and proceeds from short-term bank loans of $5,554,080.

**Contractual obligations**

As of March 31, 2025, our contractual obligations were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Contractual obligations** | **Total** | **Less than<br> 1 year** | **1-2 years** | **2-3 years** | **3-4 years** | **4-5 years** | **Thereafter** |
| Future lease payments (1) | $192577 | $104253 | $88324 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $- |
| Short-term bank loans (2) | 15726649 | 15726649 |  |  |  |  |  |
| Manufacturing facilities construction (3) | 8054518 | 6143673 | 1626434 | - | 94804 | - | 189607 |
| Total | $23973744 | $21974575 | $1714758 | $- | $94804 | $- | $189607 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) We lease offices spaces and employee dormitories, which are classified as operating leases in accordance with ASC Topic 842. As of March 31, 2025, our future lease payments totaled $192,577.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents the outstanding principal balance of short-term loans from banks.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Payment for manufacturing facilities construction work: as of March 31, 2025, our contractual obligation to pay for manufacturing facilities construction totaled $8,054,518, as discussed in "—Liquidity and Capital Resources" above mentioned in more details.

**Trend Information**

Other than as disclosed elsewhere in this report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenues, 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 March 31, 2025 and September 30, 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 either our wheelchair business or living aids products business.

**Key Factors that Affect Our Results of Operations**

We believe the following key factors may affect our financial condition and results of operations:

 ****

***Our Ability to Attract Additional Dealers and Expand our Dealer Network***

We sell our products through a network of qualified dealers, many of whom also sell products of our competitors. Our business is therefore affected by our ability to establish new relationships and maintain relationships with existing dealers. The geographic coverage of our dealers and their individual business conditions can affect the ability of our dealers to sell our products to end customers. One major dealer and its subsidiaries represented 67.0% and 59.4% of our revenue for the six months ended March 31, 2025 and 2024, respectively. There may be consolidation and changes in the dealership landscape over time which could affect the performance of our existing dealers. Thus, if we are unable to secure business relationship with our existing dealers or recruit more reputable and qualified dealers, our results of operations may be adversely and materially impacted. If we are unable to renew our contracts with our largest dealer or re-negotiate an agreement under the same or more advantageous terms, our sales and results of operations could be adversely affected. Therefore, the success of our business in the future depends on our efforts to expand our distribution network and attract new dealers in both existing and new markets. The success in expanding our distribution network will depend upon many factors, including our ability to form relationships with, and manage an increasing number of, dealers and optimize our network of dealers. If our marketing efforts fail to convince dealers to accept our products, we may find it difficult to maintain the existing level of sales or to increase such sales. Furthermore, in new markets we may fail to anticipate competitive conditions that are different from those in our existing markets. Should this happen, our net revenues would decline and our growth prospectus would be severely impaired.

***Our Ability to Increase Awareness of Our Brands and Develop Customer Loyalty***

 ****

Our portfolio of both wheelchairs and living aids products is comprised of quality products. Our brands are integral to our sales and marketing efforts. We believe that maintaining and enhancing our brand name recognition in a cost-effective manner is critical to achieving widespread acceptance of our current and future products and is an important element in our effort to increase our customer base. Successful promotion of our brand names will depend largely on our marketing efforts and ability to provide reliable and quality products at competitive prices. Brand promotion activities may not necessarily yield increased revenue, and even if they do, any increased revenue may not offset the expenses we will incur in marketing activities. If we fail to successfully promote and maintain our brands, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may fail to attract new customers or retain our existing customers, in which case our business, operating results and financial condition, would be materially adversely affected.

***Our Ability to Control Costs and Expenses and Improve Our Operating Efficiency***

Our business growth is dependent on our ability to attract and retain qualified and productive employees, identify business opportunities, secure new contracts with customers and our ability to control costs and expenses to improve our operating efficiency. Our inventory costs (including raw materials, direct labor and related production overhead) have a direct impact on our profitability. The raw materials used in the manufacturing of our products are subject to price volatility and inflationary pressures. Our success is dependent, in part, on our ability to reduce our exposure to increase in those costs through a variety of ways, while maintaining and improving margins and market share. Raw materials price increases may offset our productivity gains and price increases and may adversely impact our financial results. In addition, our staffing costs (including payroll and employee benefit expenses) and operating expenses also have a direct impact on our profitability. Our ability to drive the productivity of our staff and enhance our operating efficiency affects our profitability. To the extent that the costs we are required to pay to our suppliers and our staff exceed our estimates, our profits may be impaired. If we fail to implement initiatives to control costs and improve our operating efficiency over time, our profitability will be negatively impacted.

 ****

***Our Ability to Compete Successfully***

The wheelchair and living aids markets are developing rapidly, and related technology trends are constantly evolving. This results in the frequent introduction of new products and services, relatively short product design cycles and significant price competition. We have competitors in China and Japan that manufacture products similar to ours. Some of our current or potential competitors may have significantly greater financial resources and expertise in research and development, manufacturing, product testing, obtaining regulatory approvals and marketing approved products than we do, which could result in our competitors establishing a strong market position before our new products are able to enter the market. Additionally, technologies developed by our competitors may render our product uneconomical or obsolete. If we do not compete effectively, our operating results could be harmed.

***A Severe or Prolonged Slowdown in the Global or Chinese Economy Could Materially and Adversely Affect Our Business and Our Financial Condition***

The growth of the Chinese economy has been slowing down since 2012 and this slowdown may continue in the future. There is considerable uncertainty over trade conflicts between the United States and China and the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading economies, including the United States and China. The withdrawal of these expansionary monetary and fiscal policies could lead to a contraction. There continue to be concerns over unrest and terrorist threats in the Middle East, Europe, and Africa, which have resulted in volatility in oil and other markets. There are also concerns about the relationships between China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. The eruption of armed conflict could adversely affect global or Chinese discretionary spending, either of which could have a material and adverse effect on our business, results of operation in financial condition. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy would likely materially and adversely affect our business, results of operations and financial condition. In addition, continued turbulence in the international markets may adversely affect our ability to access capital markets to meet liquidity needs.

C. <u>Critical Accounting Estimates</u>

We prepare our unaudited condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

When reading our unaudited condensed consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) income taxes and (iii) fair value measurements. See "Note 2—Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

 ****

***Impairment of long-lived assets***

We evaluate our long-lived assets, including property, plant and equipment, operating lease right-of-use assets and land use right for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, we evaluate the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, we recognize an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets' remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Given no events or changes in circumstances indicating the carrying amount of long-lived assets may not be recovered through the related future net cash flows, we did not recognize any impairment loss on long-lived assets for the six months ended March 31, 2025 and 2024.

***Credit Losses***

 ****

On October 1, 2023, we adopted Accounting Standards Update 2016-13 "Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. The adoption of the credit loss accounting standard has no material impact on our consolidated financial statements as of October 1, 2023.

Our account receivables and other receivables included in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets are within the scope of ASC Topic 326. We make estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable and other receivables balances, credit-worthiness of the customers and other debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and other debtors. We also provide specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.

Expected credit losses are recorded as allowance for credit losses on the unaudited condensed consolidated statements of operations and comprehensive income (loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event we recover amounts previously reserved for, we will reduce the specific allowance for credit losses.

***Income taxes***

 ****

We are required to make estimates and apply our judgements in determining the provision for income tax expenses for financial reporting purpose based on tax laws in various jurisdictions in which we operate. In calculating the effective income tax rate, we make estimates and judgements, including the calculation of tax credits and the timing differences of recognition of income and expenses between financial reporting and tax reporting. These estimates and judgements may result in adjustments of pre-tax income amount filed with local tax authorities in accordance with relevant local tax rules and regulations in various tax jurisdictions. Although we believe that our estimates and judgments are reasonable, actual results may be materially different from the estimated amounts. Changes in these estimates and judgements may result in material increase or decrease in our provision for income tax expenses.

Deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. When we determine and quantify the valuation allowances, we consider such factors as projected future taxable income, the availability of tax planning strategies, the historical taxable income/losses in prior years, and future reversals of existing taxable temporary differences. The assumptions used in determining projected future taxable income require significant judgment. Actual operating results in future years could differ from our current assumptions, judgments and estimates. Changes in these estimates and assumptions may materially affect the tax position measurement and financial statement recognition. If, in the future, we determine that we would not be able to realize our recorded deferred tax assets, an increase in the valuation allowance would decrease our earnings in the period in which such a determination is made. As of March 31, 2025 and September 30, 2024, we recorded deferred tax assets of $245,021 and $499,942, net of valuation allowance of $110,574 and $378,620, respectively.