Elong Power H1 2026 profit includes $22.6M disposal gain
Reported net income included a $22,606,404 disposal gain, while operating activities used $7,050,826 in cash.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Elong Power Holding Ltd. reported first-half 2026 revenue of $2,899,110, versus $19,229 in first-half 2025. Revenue came from energy-storage system integration equipment and accessories. Cost of revenue was $2,890,116, leaving gross profit of $8,994 and a 0.3% gross margin, compared with 10% a year earlier. The company recorded a $1,801,412 operating loss and a $2,110,295 loss from continuing operations.
Reported net income was $20,494,107, versus a $2,655,477 net loss a year earlier, including a $22,606,404 gain from the March disposal of Elong Power International Co., Limited and its subsidiaries for $10,000. Net cash used in operating activities was $7,050,826, while financing activities provided $19,423,178; cash and cash equivalents were $5,939,950 at June 30, 2026. The company says it shifted from battery manufacturing to asset-light energy-storage system integration.
A RMB480,000,000 energy-storage equipment contract, including tax, was postponed pending the customer’s government approvals; delivery is now expected to commence in May 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointThe March subsidiary disposal generated a $22,606,404 gain.
- Moderate pointFirst-half revenue was $2,899,110, versus $19,229 on an extremely low prior-year base.
Negative
- Moderate pointGross margin was 0.3%, versus 10% in first-half 2025.
- Moderate pointOperating activities used $7,050,826 in cash, versus $1,609,906 in first-half 2025.
- Moderate pointContinuing-operations loss was $2,110,295, versus $1,422,582.
Key Figures
Key Terms
asset-light business model technical
pre-funded warrants financial
equity method investment financial
volume-weighted average price financial
FAQ
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How much revenue did ELPW report in the first half of 2026?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2026
Commission File Number: 001-42416
3 Yan Jing Li Zhong Jie
Jiatai International Plaza
Block B, Room 2110
Beijing, China 100025
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F ☒ | Form 40-F ☐ |
Elong Power Holding Limited (the “Company”) is hereby furnishing this report on Form 6-K with its Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2026 and 2025, and the Unaudited Interim Consolidated Financial Statements for the same period, which are attached as Exhibit 99.1 and Exhibit 99.2, respectively.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months ended June 30, 2026 and 2025 | |
| 99.2 | Unaudited Interim Consolidated Financial Statements for the Six Months ended June 30, 2026 and 2025 | |
| 99.3 | Press release - Elong Power Holding Limited Announces First Half 2026 Financial Results, dated October 6, 2026 | |
| 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). |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Elong Power Holding Limited | ||
| Date: October 6, 2026 | By: | /s/ Xiaodan Liu |
| Name: | Xiaodan Liu | |
| Title: | Chief Executive Officer | |
| 3 |
Exhibit 99.1
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
IN CONNECTION WITH THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
Unless the context otherwise requires, all references in this section to the “Company,” “Elong,” “Elong Power,” “we,” “us,” or “our” refer to Elong Power Holding Limited.
The following discussion and analysis of our financial condition and result of operations for the six months ended June 30, 2026 should be read together with our unaudited condensed consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see the information set forth and incorporated by reference in the Company’s Form 20-F for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission on April 20, 2026 under, “Cautionary Note Regarding Forward-Looking Statements” and under Item 3.D, “Risk Factors.”
Overview
Business Combination
Elong is an exempted company with limited liability incorporated under the laws of the Cayman Islands. We carry out our business in China primarily through our PRC Entities. See “— Corporate History and Structure.” Prior to March 2026, we were committed to the research and development, manufacturing, sales and service of high-power lithium-ion batteries for electric vehicles and construction machinery, as well as large-capacity, long-cycle lithium-ion batteries for energy storage systems. In March 2026, we divested our battery-manufacturing subsidiary and transitioned to an asset-light business model focusing primarily on energy-storage system integration, while retaining our capabilities in research and development, sales and full-lifecycle services. Our core competitiveness lies in our R&D strength, technical iteration and system integration capabilities. We focus on selecting OEM partners with advanced AI-driven energy storage solutions and integrating high-precision battery management system (“BMS”) technologies into our product portfolio, thus allowing us to deliver reliable, high-performance products to our customers. Our solutions are designed to meet the needs of high-value energy storage applications, primarily targeting overseas residential storage, overseas commercial and industrial (“C&I”) storage, and China’s grid-side energy storage markets.
On November 21, 2024 (the “Closing Date”), Elong, TMT Acquisition Corp, a Cayman Islands exempted company and formerly a publicly-traded special purpose acquisition company (“TMT”), and Elong Power Inc., a Cayman Islands exempted company and formerly a wholly-owned subsidiary of Elong (“Merger Sub”), consummated a business combination (the “Business Combination”) pursuant to the terms of the Amended and Restated Agreement and Plan of Merger, dated February 29, 2024 (the “Business Combination Agreement”). The Business Combination was accomplished by way of the following transaction steps:
| ● | At the closing of the Business Combination (the “Closing”), Merger Sub merged with and into TMT (the “Merger”), with TMT continuing as the surviving entity and becoming a wholly owned subsidiary of Elong. At the effective time of the Merger (the “Effective Time”), (i) each ordinary share of TMT, par value $0.0001 per share (“TMT Ordinary Share”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than TMT Excluded Shares and TMT Dissenting Shares (as each is defined below)) converted into one Class A ordinary share of Elong, par value $0.00001 per share (“Elong Class A Ordinary Share”), (ii) each right of TMT (“TMT Right”) issued and outstanding immediately prior to the Effective Time automatically converted in accordance with its terms into 2/10 of one TMT Ordinary Share, and then further converted into 2/10 of one Elong Class A Ordinary Share, and (iii) each unit of TMT, consisting of one TMT Ordinary Share and one TMT Right (“TMT Unit”), issued and outstanding immediately prior to the Effective Time automatically and mandatorily separated into its component parts and the TMT Ordinary Shares and TMT Rights included within such TMT Units automatically converted into Elong Class A Ordinary Shares as described above. |
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| ● | Prior to the Closing, Elong effectuated a share surrender (with an effect identical to that of a reverse share split) of the Elong Class A Ordinary Shares and Class B ordinary shares of Elong, par value $0.00001 per share (“Elong Class B Ordinary Shares” and collectively with the Elong Class A Ordinary Shares the “Elong Ordinary Shares”), such that, immediately thereafter, Elong had 45,000,000 Elong Ordinary Shares, consisting of 39,222,563 Elong Class A Ordinary Shares and 5,777,437 Elong Class B ordinary shares of Elong, par value $0.00001 per share (“Elong Class B Ordinary Share”), issued and outstanding. All of the Elong Class B Ordinary Shares are held by Gracedan Co., Limited (the “Supporting Shareholder”). Because each Elong Class B Ordinary Share entitles the holder thereof to 50 votes on all matters subject to vote at general meetings of Elong, the Supporting Shareholder holds a majority of the total voting power of Elong following the Closing, as described herein. | |
| ● | Concurrently with the Closing, Elong consummated the PIPE Financing (as defined below), pursuant to a subscription agreement entered into by Elong and an accredited investor (the “PIPE Investor”) prior to the Closing, which provided for the purchase by the PIPE Investor of $7,000,000 in Elong Class A Ordinary Shares (the “PIPE Financing”). The PIPE Investor, together with 2TM Holding LP, a Delaware limited partnership and sponsor of TMT (the “Sponsor”), and the representative of the underwriters of TMT’s initial public offering (the “Representative”), also entered into the Amended and Restated Registration Rights Agreement with Elong, pursuant to which the Sponsor, the Representative and the PIPE Investors have customary registration rights, including three sets of demand rights and piggy-back rights, with respect to the shares of Elong Class A Ordinary Shares held by such parties following the consummation of the Business Combination.
| |
| ● | At the Closing, the Supporting Shareholder deposited 300,000 Elong Class B Ordinary Shares (the “Indemnification Shares”) with Continental as escrow agent (the “Escrow Agent”), which shall be held in escrow as security for the Supporting Shareholder’s indemnification obligations on behalf of Elong and be subject to surrender and forfeiture under the terms of Business Combination Agreement and the escrow agreement entered into and effective as of the Closing with the Escrow Agent (the “Indemnification Escrow Agreement”).
| |
| ● | After the Closing, the Supporting Shareholder will be entitled to receive up to 9,000,000 Elong Class A Ordinary Shares (the “Earnout Shares”) solely upon the achievement of certain financial targets during the fiscal years ended December 31, 2024 and 2025 or upon the completion by Elong of certain change in control transactions, in each case in accordance with the terms of the Business Combination Agreement and the escrow agreement entered into and effective as of the Closing with the Escrow Agent covering the treatment and release of the Earnout Shares (the “Earnout Escrow Agreement”). The financial performance targets for fiscal year ended December 31, 2024 and 2025 were not achieved; accordingly, no Earnout Shares were released to the Supporting Shareholder as of December 31, 2025. |
As a result of the Business Combination, TMT became a wholly owned subsidiary of Elong, the security holders of TMT immediately prior to the Effective Time became security holders of Elong, and Elong became a public company listed on the Capital Market of The Nasdaq Stock Market LLC (“Nasdaq”).
Recent Developments
Energy Storage Equipment Sales Agreement
On May 18, 2024, a subsidiary of Elong entered into an energy storage equipment sales agreement, which became effective on May 30, 2024, with Nengjian Henan Urban Construction Engineering Co. The contract amount is RMB480,000,000 (USD 67.6 million) including tax. The project was originally expected to be delivered in 2025 but was postponed due to the customer’s pending government approvals. As of June 30, 2026, based on ongoing coordination with the customer, delivery is now expected to commence in May 2027. The Company will continue to monitor the progress of the government approval process to ensure smooth execution of the project.
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Regain Compliance with Nasdaq Listing Rule 5250(c)(1)
On July 9, 2025 the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that, because the Company had not yet filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, the Company did not comply with Nasdaq Listing Rule 5250(c)(1) for continued listing.
The Company filed the annual report on Form 20-F for the fiscal year ended December 31, 2024 on September 22, 2025.
On September 23, 2025, the Company received a letter from Nasdaq notifying the Company that, based on the September 22, 2025 filing of the Form 20-F, Nasdaq has determined that the Company complies with the Rule. Accordingly, the matter has been closed.
Increase of Share Capital
References to share and per share data of described in this subsection have not been adjusted to give effect to the December 2025 Share Consolidation, March 2026 Share Consolidation or the August 2026 Share Consolidation as described below.
At the annual general meeting of shareholders of the Company held on November 24, 2025, the shareholders approved that the Company’s authorized share capital be increased from US$50,000 divided into 5,000,000,000 ordinary shares of a par value of US$0.00001 each, comprising 4,000,000,000 class A ordinary shares of a par value of US$0.00001 each and 1,000,000,000 class B ordinary shares of a par value of US$0.00001 each, to US$25,000,000 divided into 2,500,000,000,000 ordinary shares of a par value of US$0.00001 each, comprising 2,000,000,000,000 class A ordinary shares of a par value of US$0.00001 each and 500,000,000,000 class B ordinary shares of a par value of US$0.00001 each, by the creation of additional 1,996,000,000,000 Class A Ordinary Shares and 499,000,000,000 Class B Ordinary Shares.
It was further approved and authorized, among others, that
(i) (A) one or more share consolidations of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares at a ratio of not less than two (2)-for-one (1) and not more than five-hundred (500)-for-one (1) aggregately, with the exact ratio to be set at a whole number within the aforementioned range and the exact date to be determined by the board of directors of the Company in its sole discretion within two years after the date of November 24, 2025 provided that the aggregate ratio shall not exceed five-hundred (500)-for-one (1) and that no fractional share shall arise from the share consolidations, and (B) any fractional shares resulting from the share consolidations be rounded up to the nearest whole Class A ordinary shares or Class B ordinary shares;
(ii) the Board do all other such acts and things as the Board considers necessary or desirable for the purposes of the share consolidations, including determining the consolidation range and the exact date of the share consolidations and instructing the registered office provider or transfer agent of the Company to complete the necessary corporate record(s) and filing(s) to reflect the share consolidations; and
(iii) the second amended and restated memorandum and articles of association of the Company be amended and restated by their deletion in their entirety and the substitution in their place with the third amended and restated memorandum and articles of association to reflect the share capital increase and the share consolidations, with effect from the effective date of the share capital increase and the share consolidations.
The December 2025 Share Consolidation
References to share and per share data of described in this subsection have not been adjusted to give effect to the March 2026 Share Consolidation or the August 2026 Share Consolidation as described below
According to the unanimous written resolutions of the Board passed on December 2, 2025, the share consolidation at the ratio of sixteen (16)-for-one (1) and the rounding up of any fractional shares resulting from the share consolidation to the nearest whole ordinary share to be effective on December 2, 2025 (the “December 2025 Share Consolidation”) were approved and took effect on December 2, 2025.
Upon the opening of the market on December 26, 2025, the Company’s Class A ordinary shares of a par value of US$0.00016 each began trading on the Nasdaq Global Market on a post-December 2025 Share Consolidation basis under the current symbol “ELPW”.
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The December 2025 Share Consolidation reduced the number of outstanding shares of the Company from approximately 61.3 million class A ordinary shares of a par value of US$0.00001 each and approximately 5.8 million class B ordinary shares of a par value of US$0.00001 each to approximately 3.8 million class A ordinary shares of a par value of US$0.00016 each and approximately 0.4 million Class B ordinary shares of a par value of US$0.00016 each, respectively. Every sixteen (16) outstanding class A ordinary shares or class B ordinary shares were combined into and automatically become one post- December 2025 Share Consolidation Class A Ordinary Share or Class B Ordinary Share, respectively. No fractional shares were issued in connection with the December 2025 Share Consolidation. Instead, the Company issued one full post-December 2025 Share Consolidation Class A Ordinary Share or Class B Ordinary Share, as applicable, to any shareholder who would have been entitled to receive a fractional share as a result of the process. The par value of the Class A Ordinary Shares and Class B Ordinary Shares was increased in proportion to the ratio of the December 2025 Share Consolidation to $0.00016 per share and the number of authorized ordinary shares was reduced in proportion to the ratio of the December 2025 Share Consolidation to 125,000,000,000 Class A Ordinary Shares of a par value of US$0.00016 each and 31,250,000,000 Class B Ordinary Shares of a par value of US$0.00016 each.
In connection with the December 2025 Share Consolidation, the Company amended and restated its memorandum and articles of association to reflect the adjustment of the number of authorized ordinary shares and the par value, which became effective on December 2, 2025.
Unless specified otherwise, all references in this report to share and per share data have been adjusted, including historical data which has been retroactively adjusted, to give effect to the Share Consolidations.
Regain Compliance with Nasdaq Bid Price Requirement
On October 3, 2025, Elong received notification from Nasdaq notifying the Company that it is not in compliance with the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5450(a)(1), because the closing bid price of the Company’s Class A Ordinary Shares was below $1.00 per share for 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from the Notification Date, until April 1, 2026, to regain compliance with the minimum bid price requirement.
On January 12, 2026, the Company received a letter from Nasdaq notifying the Company that the Staff has determined that for the last 10 consecutive business days, from December 26, 2025 to January 9, 2026, the closing bid price of the Company’s Ordinary Shares has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with Listing Rule 5450(a)(1), and this matter has been closed.
The 2026 Underwritten Offerings
References to share and per share data of described in section have not been adjusted to give effect to the March 2026 Share Consolidation or the August 2026 Share Consolidation as described below.
Registered Offering Completed on February 3, 2026
On February 2, 2026, the Company entered into an underwriting agreement with Maxim Group LLC (“Maxim”), pursuant to which the Company agreed to sell to Maxim and Maxim agreed to purchase from the Company, on a firm commitment basis, 2,400,000 units, each consisting of one Class A ordinary share of the Company, par value $0.00016 per share, and one warrant to purchase one Class A ordinary share, at an offering price of $3.16 per unit, for aggregate gross proceeds to the Company of approximately $7.6 million, before deducting underwriting discount and expenses payable by the Company.
Registered Offering Completed on February 27, 2026
On February 26, 2026, the Company entered into another underwriting agreement with Maxim, pursuant to which the Company sold an aggregate 21,700,000 units on the same terms as in the offering completed on February 3, 2026, each consisting of one Class A ordinary share of the Company, par value $0.00016 per share, and one warrant to purchase one Class A ordinary share, at an offering price of $0.3231 per unit, for aggregate gross proceeds to the Company of approximately $7 million, before deducting underwriting discount and expenses payable by the Company.
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The 2026 Registered Offering
References to share and per share data of described in section have not been adjusted to give effect to the August 2026 Share Consolidation as described below.
Registered Offering Completed on May 18, 2026
On May 15, 2026, the Company entered into certain securities purchase agreements with the investors named therein, pursuant to which the Company sold an aggregate 1,631,250 of Class A ordinary shares, par value of US$0.0128 per share, 2,984,250 pre-funded warrants, each to purchase one Class A ordinary share at $0.001 per share (each, a “May 2026 Pre-Funded Warrant”), and 4,615,500 warrants, each to purchase one Class A ordinary share at an initial exercise price of $1.30 per share (each, a “May 2026 Common Warrant”), for gross proceeds of approximately $6 million, before deducting placement agent fees and expenses payable by the Company.
Registered Offering Completed on July 13, 2026
On July 10, 2026, the Company entered into certain securities purchase agreements with the investors named therein, pursuant to which the Company sold an aggregate 7,975,000 of Class A ordinary shares, par value of US$0.0128 per share, 8,525,000 pre-funded warrants, each to purchase one Class A ordinary share at $0.001 per share, and 16,500,000 warrants, each to purchase one Class A ordinary share at an initial exercise price of $0.40 per share, for gross proceeds of approximately $6.6 million, before deducting placement agent fees and expenses payable by the Company.
Registered Offering Completed on August 4, 2026
On August 3, 2026, the Company entered into certain securities purchase agreements with the investors named therein, pursuant to which the Company sold an aggregate 11,466,666 of Class A ordinary shares, par value of US$0.0128 per share and 11,466,666 warrants, each to purchase one Class A ordinary share at an initial exercise price of $0.12 per share (each, an “August 2026 Common Warrant”), for gross proceeds of approximately $1.38 million, before deducting placement agent fees and expenses payable by the Company.
Further Increase of Share Capital and Increase of the Voting Rights of Class B Ordinary Shares
References to share and per share data of described in this subsection have not been adjusted to give effect to the March 2026 Share Consolidation or the August 2026 Share Consolidation as described below.
At the extraordinary general meeting of shareholders of the Company held on January 6, 2026, the shareholders approved, among other things, that (i) the voting rights attached to each Class B Ordinary Share be increased from fifty (50) votes to two hundred (200) votes on all matters subject to vote at general meetings of the Company, (ii) the Company’s authorized share capital be increased from US$25,000,000 divided into 156,250,000,000 ordinary shares of a par value of US$0.00016 each, comprising 125,000,000,000 Class A Ordinary Shares of a par value of US$0.00016 each and 31,250,000,000 Class B Ordinary Shares of a par value of US$0.00016 each, to US$240,000,000 divided into 1,500,000,000,000 ordinary shares of a par value of US$0.00016 each, comprising 1,200,000,000,000 Class A Ordinary Shares of a par value of US$0.00016 each and 300,000,000,000 Class B Ordinary Shares of a par value of US$0.00016 each, (iii) a new round of share consolidations of the Company’s issued and unissued Class A Ordinary Shares and Class B Ordinary Shares be implemented, at any one time or multiple times during a period of up to two years of the date of the meeting, at the exact consolidation ratio and effective time as the Board may determine from time to time in its absolute discretion, provided that the accumulative consolidation ratio for all such share consolidations shall not be more than 4000:1, and the Board be authorized, at its absolute and sole discretion, to implement one or more share consolidations, and determine the exact consolidation ratio and effective date of each of such share consolidations, with any fractional shares rounding up to the nearest whole share, during a period of two years of the date of the meeting. It was further approved and authorized, among others, that the third amended and restated memorandum and articles of association of the Company be amended and restated by their deletion in their entirety and the substitution in their place with the fourth amended and restated memorandum and articles of association to reflect the share capital increase and the increase of voting rights of Class B Ordinary Shares, with immediate effect.
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The March 2026 Share Consolidation
References to share and per share data of described in this subsection have not been adjusted to give effect to the August 2026 Share Consolidation as described below.
As authorized by the resolutions of the shareholders of Elong passed on January 6, 2026, by way of the unanimous written resolutions of the Board passed on March 5, 2026, the Board implemented a share consolidation at the ratio of eighty (80)-for-one (1) to be effective on March 10, 2026 (the “March 2026 Share Consolidation”) and the rounding up of any fractional shares resulting from the March 2026 Share Consolidation to the nearest whole ordinary share; the Company subsequently announced a change of the effective date of the Reverse Split, which will take effect at the open of The Nasdaq Stock Market on March 12, 2026. The March 2026 Share Consolidation reduced the number of outstanding shares of the Company from approximately 113 million Class A ordinary shares of a par value of US$0.00016 each and approximately 361,090 Class B ordinary shares of a par value of US$0.00016 each to approximately 1.4 million Class A ordinary shares of a par value of US$0.0128 each and approximately 4,515 Class B ordinary shares of a par value of US$0.0128 each, respectively. The par value of the Class A ordinary shares and Class B ordinary shares will be increased in proportion to the ratio of the March 2026 Share Consolidation to $0.0128 per share and the number of authorized ordinary shares has been adjusted in proportion to the ratio of the March 2026 Share Consolidation to 15,000,000,000 Class A ordinary shares and 3,750,000,000 Class B ordinary shares.
Transfer to Nasdaq Capital Market and Regain Compliance of Market Value of Listed Securities and Market Value of Publicly Held Shares Requirements
On March 23, 2026, the Company submitted an application to the Nasdaq Stock Market LLC to transfer the listing of its Class A Ordinary Shares from the Nasdaq Global Market to the Nasdaq Capital Market, for strategic purposes. On March 30, 2026, the Nasdaq Listing Qualifications department approved the Company’s request to transfer the Company’s Class A Ordinary Shares from the Global Market to the Capital Market. The transfer took effect at the opening of business on April 1, 2026, without change to the current ticker symbol “ELPW” or CUSIP designation to the Company’s Class A Ordinary Shares.
Market Value of Listed Securities
On October 3, 2025, the Company received a letter from the staff at Nasdaq notifying the Company that, for the 30 consecutive business days prior to the date of the letter, the Company’s Market Value of Listed Securities was below the minimum of $50 million required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A). In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days from the notification date, or until April 1, 2026, to regain compliance.
On April 1, 2026, the Company received a letter from Nasdaq notifying the Company that the Staff has determined that, as the Company’s securities were transferred to the Capital Market, the Company has regained compliance with Listing Rule 5550(b)(1), and this matter has been closed.
Market Value of Publicly Held Shares
On the October 3, 2025, the Company also received a letter from the staff at Nasdaq notifying the Company that, for the 30 consecutive business days prior to the date of the letter, the Company’s Market Value of Publicly Held Shares was below the minimum of $15 million required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5450(b)(2)(C). In accordance with Nasdaq listing rule 5810(c)(3)(D), the Company has 180 calendar days from the notification date, or until April 1, 2026, to regain compliance.
On April 1, 2026, the Company received a letter from Nasdaq notifying the Company that the Staff has determined that, as the Company’s securities were transferred to the Capital Market, the Company has regained compliance with Listing Rule 5550(a)(5), and this matter has been closed.
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Disposition of Elong Power International Co., Limited
On March 17, 2026, Elong and Elong Power International Co., Limited (“Elong BVI”) entered into an Equity Transfer Agreement with a non-affiliated third party (the “Buyer”), pursuant to which the Company agreed to sell to the Buyer 100% equity interest in Elong BVI, at a purchase price of $10,000. The sale of Elong BVI includes the sale of its subsidiaries, Elong Power (Hong Kong) International Limited, Elong Power (Ganzhou) Co., Ltd., Huizhou Jingyang Energy Technology Co., Ltd. (formerly known as Huizhou City Yipeng Energy Technology Co., Ltd), Ganzhou Zhangyang Energy Technology Co., Ltd. (formerly known as Ganzhou Yipeng Energy & Technology Co., Ltd.) and Zibo Jingyang New Energy Technology Co., Ltd. (formerly known as Zibo Yipeng Energy & Technology Co., Ltd.). The transaction closed on March 19, 2026.
The disposition of Elong BVI and its subsidiaries was mainly due to slowed growth and increased net loss in the sales of battery packs, battery cells, and battery spare parts and other such as sales of product waste and scraps. It is consistent with the Company’s strategic shift away from the battery cell sales. As part of its strategic realignment, the Company will continue to focus on the research and development, sales and service of energy storage systems to provide a foundation for long-term growth.
Issuance of Class B Ordinary Shares
In 2025, Jing Yang (Hong Kong) International Limited (formerly known as Elong Power (Hong Kong) International Limited) (“Jingyang HK”) borrowed RMB0.8 million ($117,076) from Ms. Xiaodan Liu (“Ms. Liu”), a director, the Chief Executive Officer and the Chairwoman of the Board of Elong, bearing interest at 8% per annum and payable on demand. On December 31, 2025, Jingyang HK transferred its debt of RMB0.8 million ($117,076) owed to Ms. Liu and related interest payable to the Company under the same terms (the “Loan”). The outstanding balance as of April 10, 2026 consists of $117,076 in principal and $9,230 in accrued and unpaid interest.
On April 8, 2026, the Company entered into a Partial Loan Settlement Agreement with Ms. Liu, and GRACEDAN CO., LIMITED, pursuant to which the Company agreed to issue 10,000 Class B ordinary shares of the Company, valued at $1.56 per share, the closing price of the Company’s Class A ordinary shares as of April 7, 2026, to GRACEDAN CO., LIMITED to settle $15,600 of the principal of the Loan owed. On April 13, 2026, the shares were issued to Ms. Liu.
In 2025, the Company borrowed $1,380,396 from Ms. Liu, to support its business operations, bearing interest at 8% per annum and payable on demand. As of June 23, 2026, the outstanding balance under this loan amounted to $33,000. On June 23, 2026, the Company entered into a debt settlement and mutual release agreement with Ms. Liu and GRACEDAN CO., LIMITED, pursuant to which the Company agreed to issue 33,881 Class B ordinary shares of the Company, valued at $0.974 per share, the closing price of the Company’s Class A ordinary shares as of June 22, 2026, to GRACEDAN CO., LIMITED to settle $33,000 of such payable with Ms. Liu. On June 24, 2026, the shares were issued to GRACEDAN CO., LIMITED.
On the same day, the Company entered into a securities purchase agreement with GRACEDAN CO., LIMITED, pursuant to which the Company agreed to issue and sell to GRACEDAN CO., LIMITED 66,119 Class B ordinary shares of the Company, valued at $0.974 per share, the closing price of the Company’s Class A ordinary shares as of June 22, 2026. On June 24, 2026, the shares were issued to GRACEDAN CO., LIMITED.
The shares were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation S promulgated thereunder.
Change of Chief Financial Officer
On June 11, 2026, Wei Zou tendered his resignation as the Chief Financial Officer of the Company, effective June 11, 2026. Wei Zou’s resignation was not a result of any disagreement with the Company’s operations, policies or procedures.
On June 11, 2026, approved by the Board of Directors of the Company, Yue Liu was appointed as the Chief Financial Officer, effective June 11, 2026.
The August 2026 Share Consolidation
As authorized by the resolutions of the shareholders of Elong passed on January 6, 2026, by way of the unanimous written resolutions of the Board passed on July 31, 2026, the Board implemented a share consolidation at the ratio of forty-five (45)-for-one (1) to be effective on August 10, 2026 (the “August 2026 Share Consolidation”) and the rounding up of any fractional shares resulting from the August 2026 Share Consolidation to the nearest whole ordinary share. The August 2026 Share Consolidation reduced the number of outstanding shares of the Company from approximately 35 million Class A ordinary shares of a par value of US$0.0128 each and approximately 114,515 Class B ordinary shares of a par value of US$0.0128 each to approximately 0.78 million Class A ordinary shares of a par value of US$0.576 each and approximately 2,545 Class B ordinary shares of a par value of US$0.576 each, respectively. The par value of the Class A ordinary shares and Class B ordinary shares will be increased in proportion to the ratio of the August 2026 Share Consolidation to $0.576 per share and the number of authorized ordinary shares was reduced in proportion to the ratio of the August 2026 Share Consolidation to 333,333,333 class A ordinary shares and 83,333,333 class B ordinary shares.
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Adjustment to Exercise Price of the Warrants
Immediately prior to the effectiveness of the August 2026 Share Consolidation, the Company had (i) May 2026 Common Warrants to purchase up to 3,846,250 Class A Ordinary Shares, (ii) July 2026 Common Warrants to purchase up to 16,000,000 Class A Ordinary Shares, and (iii) August 2026 Common Warrants to purchase up to 11,466,666 Class A Ordinary Shares.
Immediately following the August 2026 Share Consolidation, the exercise price of the Warrants and the number of Class A Ordinary Shares issuable under the Warrants will be subject to proportionate adjustments pursuant to the ratio of forty-five (45)-for-one (1).
The exercise price will be further adjusted and reduced to the lowest volume-weighted average price (“VWAP”, and such lowest VWAP, the “Event Market Price”) during the period beginning five consecutive trading days immediately preceding, and ending five consecutive trading days immediately following, any future offerings (the “Share Combination Adjustment Period”), provided that, for purposes of calculating the Event Market Price, the VWAP for trading days prior to the closing of a future offering will be the VWAP as reported after giving proportional effect to the August 2026 Share Consolidation. The adjustment of the Exercise Price shall take effect beginning at the close of trading on the Nasdaq Capital Market on the first day of the Share Combination Adjustment Period and continuing each trading day thereafter until the close of trading on the Nasdaq Capital Market on the last day of the Share Combination Adjustment Period, effective at the close of trading on the Principal Market on each trading day during the Share Combination Adjustment Period. The number of Class A Ordinary Shares issuable under the Warrants will be increased such that the aggregate exercise price, after giving effect to the decrease in the exercise price, shall be equal to the aggregate exercise price in effect on the issuance date for the warrant shares then outstanding. As of the close of trading on August 13, 2026, the exercise price was adjusted to $4.34 per share and the number of warrant shares was adjusted to approximately 2,943,817 Class A Ordinary Shares.
Key Factors Affecting Our Results of Operations
We believe that our results of operations are affected by the following factors.
Technology and Solutions
Following a strategic restructuring, Elong has transitioned to an asset-light, technology-driven business model. We have divested our non-core manufacturing assets and now leverage a flexible global supply chain through partnerships with original equipment manufacturers and original design manufacturers (collectively, “OEM/ODM partners”).
Our core competitiveness lies in our technical evaluation and integration capabilities. We focus on selecting OEM partners with advanced AI-driven energy storage solutions and integrating high-precision battery management system (“BMS”) technologies into our product portfolio. We do not develop these technologies ourselves but rely on our partners’ proven capabilities to deliver reliable, high-performance products to our customers. Our solutions are designed to meet the needs of high-value energy storage applications, primarily targeting overseas residential storage, overseas commercial and industrial (“C&I”) storage, and China’s grid-side energy storage markets.
Market Demand
Our revenue and profitability depend materially on market demand for lithium-ion battery energy storage systems. Global demand for lithium-ion battery energy storage continues to grow rapidly. Driven by energy transition and supportive policies across key markets including China, North America and Europe, large-scale grid-side and commercial & industrial (“C&I”) energy storage deployments continue to expand. Emerging use cases such as energy storage paired with AI computing infrastructure deliver meaningful incremental demand, while residential storage adoption is expanding across regions, creating a favorable multi-region, multi-application market dynamic. The Company is executing a strategic shift from high-power battery cell manufacturing to energy storage system integration and is actively building its project pipeline in both China and Europe.
According to the Electrical Energy Storage (EES) Report Europe H1 2026 published by EUPD Research in September 2026, projected new battery storage installations in Europe for 2026 will reach approximately 57 GWh, representing a 78% increase from 32 GWh in 2025, primarily driven by markets in Germany, Bulgaria, Italy, the United Kingdom and Spain. Domestically, per CNESA DataLink statistics, China’s newly commissioned new energy storage capacity reached 66.4 GW / 189.5 GWh in 2025, representing year-over-year growth of 52% in power capacity and 73% in energy capacity. Newly commissioned capacity in H1 2026 stood at 21.8 GW / 58.6 GWh. The Action Plan for the Large-Scale Development of New Energy Storage (2025–2027) jointly issued by China’s National Development and Reform Commission and National Energy Administration in August 2025 targets installed new energy storage capacity of no less than 180 GW nationwide by 2027, with projected direct project investment of approximately RMB 250 billion.
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While this robust market growth brings opportunities, the industry also faces longer-term pressures including raw material price volatility, cross-border trade barriers and competitive pressure from capacity expansion. That said, constrained supply of high-quality battery cells underpins a clear upward trend in industry sentiment, and this market expansion creates a favorable environment for industry participants.
Supply Capacity
Our growth depends on our ability to meet demand for our energy storage solutions through our global network of OEM/ODM partners. We actively manage our supply chain capabilities by aligning supply schedules with medium- and long-term market demand. We focus on strengthening supplier coordination to ensure product quality and on-time delivery, while simultaneously expanding our sales channels and customer base to support scalable growth.
Supply Chain and Cost Management
Our profitability is influenced by our ability to manage procurement costs from third-party suppliers, which are subject to market price fluctuations. We seek to mitigate cost pressures through strategic supplier negotiations, diversified sourcing arrangements, and appropriate pricing adjustments. As our sales volume increases, we anticipate improved cost efficiency driven by enhanced purchasing power and more favorable supply terms.
Regulatory Landscape
Elong’s business complies with PRC regulations on the new energy industry. Economic incentives for new energy storage equipment purchasers, tax credits for renewable energy projects, and penalties on automakers may affect market demand. As a battery distributor, our main environmental compliance focus is on product substance restrictions (such as bans on hazardous materials) and end-of-life battery recycling obligations. We rely on our suppliers to provide compliant products and monitor evolving recycling regulations.
Other Significant Factors
Our global operations are subject to risks arising from international trade policies, tariffs, and geopolitical tensions. Fluctuations in procurement costs, logistics availability, and foreign exchange rates may impact our supply chain efficiency and profitability. We actively monitor these factors and employ strategic sourcing and pricing adjustments to mitigate potential adverse effects.
Basis of Presentation
Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
A subsidiary is an entity in which Elong directly controls 100% of the voting power and (a) has the power to appoint or remove the majority of the members of the board of directors (the “Subsidiary Board”), (b) to cast majority of votes at the meeting of the Subsidiary Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
The Company operates as one operating segment in accordance with ASC 280, Segment Reporting. The Company has a common basis of organization, and the products and services are offered mutually. Considering the streamlining of the growing organization, the Company’s Chief Operating Decision Maker (“CODM”) which is the Chief Executive Officer continues to make decisions with regards to business operations and resource allocation based on evaluation of Elong as a whole. Accordingly, the Company operates and makes decisions as one business segment. As the Company’s long-lived assets are substantially located in the PRC and all revenue are generated within the PRC, no geographical segments are presented.
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Key Components of Results of Operations
(a) Revenues
Revenue is recognized at the point in time upon the customer’s acceptance of products, which is when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to for the products sold. The Company is in the energy storage technology industry and generates its revenue primarily from the sales of energy storage system integration equipment and supporting accessories, as part of its asset-light business model focused on AI-driven energy storage solutions.
The Company provides a standard warranty on the products sold, which entails repair or replacement of non-conforming items, in conjunction with the sales of products. The Company considers the standard warranty is not providing incremental service to customers rather than assurance to the quality of the products, and therefore is not a separate performance obligation and should be accounted for in accordance with ASC 460, Guarantees.
(b) Cost of revenue
Cost of revenue includes the purchase cost of finished goods and accrued warranty expenses.
(c) Selling, general and administrative expenses
Selling expenses consist primarily of employee salaries and business promotion expenses.
General and administrative expenses consist primarily of employee salaries, depreciation and amortization expenses, legal, and other professional services fees, lease and other general corporate related expenses.
(d) Other income (expenses)
Other income (expense) mainly consists of non-operational activities such as debt restructuring, investment income and other miscellaneous items.
Results of Operations
The
following table sets forth, for the periods indicated, statements of
| For the six months ended June 30, | Change | |||||||||||
| 2026 | 2025 | % | ||||||||||
| Unaudited | Unaudited | |||||||||||
| Revenues | $ | 2,899,110 | $ | 19,229 | 14977 | % | ||||||
| Cost of revenues | (2,890,116 | ) | (17,306 | ) | 16600 | % | ||||||
| Gross Profit | 8,994 | 1,923 | 368 | % | ||||||||
| Selling expenses | (505 | ) | (19,985 | ) | (97 | )% | ||||||
| General and administrative expenses | (1,809,901 | ) | (1,252,874 | ) | 44 | % | ||||||
| Total operating expense | (1,810,406 | ) | (1,272,859 | ) | 42 | % | ||||||
| Operating loss | (1,801,412 | ) | (1,270,936 | ) | 42 | % | ||||||
| Interest income | 59,148 | 200 | 29474 | % | ||||||||
| Interest expense | (206,698 | ) | (22,899 | ) | 803 | % | ||||||
| Foreign currency exchange loss | (255,926 | ) | (128,947 | ) | 98 | % | ||||||
| Share of profit from equity method investment | 180 | - | N/A | |||||||||
| Fair value losses on short-term investments | (186,854 | ) | - | N/A | ||||||||
| Other income | 281,267 | - | N/A | |||||||||
| Loss before income taxes | (2,110,295 | ) | (1,422,582 | ) | 48 | % | ||||||
| Income tax expense | - | - | - | |||||||||
| Net loss from continuing operations | $ | (2,110,295 | ) | $ | (1,422,582 | ) | 48 | % | ||||
| Net income (loss) from discontinued operations | 22,604,402 | (1,232,895 | ) | (1933 | )% | |||||||
| Net income (loss) | 20,494,107 | (2,655,477 | ) | (872 | )% | |||||||
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Results of Operations – Six months ended June 30, 2026 Compared to Six months ended June 30, 2025
Revenues
We generated revenue of $2,899,110 for the six months ended June 30, 2026, representing an increase of $2,879,881, or 14977%, compared to $19,229 in the same period of 2025. This growth was primarily attributable to the significant ramp-up in sales of our energy storage system integration equipment and supporting accessories business. The percentage change is not meaningful for comparison due to the extremely low revenue base in the prior-year period.
For the six months ended June 30, 2026, the Company primarily engages in the sales of energy storage system integration equipment and supporting accessories. The Company has commenced new business operations and transitioned into a specialized developer and seller of lithium-battery energy storage systems since 2025. The Company is divesting non-core assets to adopt an asset-light model focused on AI-driven energy storage solutions, shifting from manufacturing to high-margin products and system integration.
The following table summarizes the breakdown of revenues by categories in US dollars:
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Change | Change | |||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Energy storage system integration equipment & supporting accessories | $ | 2,899,110 | 100 | % | $ | 19,229 | 100 | % | $ | 2,879,881 | 14977 | % | ||||||||||||
| Total revenue | $ | 2,899,110 | 100 | % | $ | 19,229 | 100 | % | $ | 2,879,881 | 14977 | % | ||||||||||||
Cost of Revenues
| For the six months ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| Cost of revenues | $ | 2,890,116 | $ | 17,306 | $ | 2,872,810 | 16600 | % | ||||||||
| as a percentage of revenues | 99.7 | % | 90 | % | 9.7 | % | ||||||||||
Cost of revenues was $2,890,116 for the six months ended June 30, 2026, compared to $17,306 for the same period of 2025, an increase of $2,872,810 or 16600%, primarily aligned with the increase in revenue. The increase was mainly due to the commencement of the Company’s sales of energy storage system integration equipment and supporting accessories. For the six months ended June 30, 2026, which generated related product revenue during the period. The $2.89 million cost of revenue primarily represents the purchase cost of the goods associated with the sales generated during the period and accrued product warranty expenses.
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Gross Profit and Gross Margin
| For the six months ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| Gross Profit | $ | 8,994 | $ | 1,923 | $ | 7,071 | 368 | % | ||||||||
| Gross Margin | 0.3 | % | 10 | % | (9.7 | )% | ||||||||||
The Company’s gross profit margin was 0.3% for the six months ended June 30, 2026, reflecting the gross profit from its sales of energy storage system integration equipment & supporting accessories.
Selling Expenses
| For the six months ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| Selling Expenses | $ | 505 | $ | 19,985 | $ | (19,480 | ) | (97 | )% | |||||||
| as a percentage of revenues | 0.02 | % | 104 | % | (103.9 | )% | ||||||||||
Selling expenses were $505 for the six months ended June 30, 2026, compared to $19,985 in the same period of 2025, primarily due to decrease of sales personnel’s salaries and travel expenses.
General and Administrative Expenses
| For the six months ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| General and Administrative Expenses | $ | 1,809,901 | $ | 1,252,874 | $ | 557,027 | 44 | % | ||||||||
| as a percentage of revenues | 62 | % | 6516 | % | (6453 | )% | ||||||||||
General and administrative (G&A) expenses were $1,809,901 for the six months ended June 30, 2026, an increase of $557,027 compared to $1,252,874 in the same period of 2025. This was primarily due to an increase of $914,732 in consulting-related expenses and $126,468 rise in employee costs, partially offset by a $430,559 decrease in audit and legal service fees.
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Gain on disposal of subsidiaries
In March 2026, the Company completed the disposal of equity interests in Elong Power International Co., Limited and its subsidiaries to a non-affiliated third party for a purchase price of $10,000. The transaction generated a gain on disposal of $22,606,404.
Cash Flows Summary
The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities for the periods stated below:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash used in operating activities | $ | (7,050,826 | ) | $ | (1,609,906 | ) | ||
| Net cash used in investing activities | $ | (6,788,214 | ) | $ | (62,254 | ) | ||
| Net cash provided by financing activities | $ | 19,423,178 | $ | 1,570,869 | ||||
Cash Flows from Operating Activities
Net cash used in operating activities was $7,050,826 for the six months ended June 30, 2026, compared to $1,609,906 net cash used for the six months ended June 30, 2025. The negative cash flow for the six months ended June 30, 2026 was primarily due to i) gain on disposal of subsidiaries of $22,606,404, ii) increase in prepaid expenses and other current assets of $7,349,365, iii) decrease in contract liabilities of $1,791,605, iv) decrease in accounts and notes payable of $795,842, v) increase in amounts due from related parties of $128,072, vi) decrease in operating lease liability of $53,895 and vii) equity in earnings of equity method investee of $180, partially offset by i) increase in accrued expenses and other current liabilities of $4,106,253, ii) decrease in accounts receivable of $682,962, iii) unrealized gain on short-term investments of $186,854, iv) provision for warranty liability of $108,876.
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Net
cash used in operating activities was $1,609,906 for the six months ended June 30, 2025. The negative cash flow for the six months ended
June 30, 2025 was primarily due to i) net loss of $2,655,477, ii)
Cash Flows from Investing Activities
Net cash used in investing activities was $6,788,214 for the six months ended June 30, 2026, compared to $62,254 for the six months ended June 30, 2025. The negative cash flow from investing activities for the six months ended June 30, 2026 was mainly due to the $4,572,616 cash used in placement of long-term investments, the $4,132,849 cash used in placement of short-term investments and the $5,128 cash used in purchase of property, plant and equipment, partially offset by $2,045,400 of proceeds from disposal of short-term investments.
Net cash used in investing activities was $62,254 for the six months ended June 30, 2025. The negative cash flow from investing activities for the six months ended June 30, 2025 was mainly due to the $62,254 cash used in purchase of property, plant and equipment.
Cash Flows from Financing Activities
Net cash provided by financing activities was $19,423,178 for the six months ended June 30, 2026, compared to $1,570,869 net cash provided by financing activities for the six months ended June 30, 2025. The positive cash flow from financing activities for the six months ended June 30, 2026 was mainly the result of $18,328,919 of proceeds from issuance of common stock, $4,568,835 of proceeds from borrowings from related parties and $1,289,909 of proceeds from borrowings from third parties, offset by repayment of $2,189,134 to third party borrowings, $1,702,120 of offering costs and repayment of $873,231 to related party borrowings.
Net cash provided by financing activities was $1,570,869 for the six months ended June 30, 2025. The positive cash flow from financing activities for the six months ended June 30, 2025 was mainly the result of $1,280,093 of proceeds from borrowings from related parties and $322,045 of proceeds from borrowings from third parties, offset by repayment of $31,269 to third party borrowings.
The majority of the Company’s revenues and expenses were denominated primarily in Renminbi (“RMB”), the currency of the People’s Republic of China. There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable.
Commitments And Contingencies
Our future capital requirements will depend on many factors, including, but not limited to funding inventory procurement and product sourcing and for general working capital. If the proceeds from the Business Combination are not sufficient to cover our planned expansions and our general working capital needs, we may need to raise additional capital. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses or technologies. We may need to seek additional equity or debt financing in order to meet these future capital requirements. Debt or preferred stock financing, if available, may involve covenants restricting our operations or our ability to incur additional debt or issue additional preferred stock, and may contain other terms that are not favorable to us or our stockholders. Additional equity financing may result in substantial dilution to our existing stockholders. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, we may have to delay product development and other initiatives and our business, financial condition and results of operations could be adversely affected.
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There are no material off-balance sheet arrangements other than those described below.
Lease Commitments
The total future minimum lease payments of property management fee and short-term lease under the non-cancellable operating lease with respect to the office as of June 30, 2026 are payable as follows:
Lease Commitments | ||||
| Within 1 year | 33,702 | |||
| 2-3 years | 20,193 | |||
| Total | $ | 53,895 | ||
Contingencies
Legal proceedings
From time to time, the Company may become involved in litigation, claims, and proceedings. The Company evaluates the status of each legal matter and assesses the potential financial exposure. If the potential loss from any legal proceedings or litigation is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimated.
For detailed information, see Note 19, Commitments and Contingencies - (ii) Litigation, in the notes to the unaudited condensed consolidated financial statements as of June 30, 2026
Related Party Transactions
For detailed related party transactions incurred during the six months ended June 30, 2026 and 2025, please see Note 16, Related party balances and transactions, in the notes to the unaudited condensed consolidated financial statements as of June 30, 2026.
Off-Balance Sheet Arrangements
During the six months ended June 30, 2026 and 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.
Holding Company Structure
The Company is a holding company with no material operations of its own. We conduct our business primarily through our single PRC subsidiary, a specialized developer and seller of AI-driven lithium-battery energy storage systems with an asset-light business model. As a result, our ability to pay dividends depends significantly upon dividends paid by this PRC subsidiary. Our PRC subsidiary is permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, our subsidiary may allocate a portion of its after-tax profits to other discretionary funds at its discretion. These reserve and discretionary funds are not distributable as cash dividends. Furthermore, any remittance of dividends by our PRC subsidiary is subject to examination by banks designated by the State Administration of Foreign Exchange (“SAFE”). Given the Company’s accumulated deficit and the financial position as of June 30, 2026, our PRC subsidiary has not paid dividends and is not expected to be able to pay dividends in the foreseeable future. This is because it must first generate sufficient accumulated profits to offset prior losses and meet the requirements for statutory reserve funds before any distribution can be made.
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Inflation
According to the National Bureau of Statistics of China, the national consumer price index (CPI) rose by 1.0% year-over-year for the six months ended June 30, 2026. In June 2025, the CPI increased by 0.1% year-over-year. We have been materially affected by inflation in raw materials in the past, and we may be affected in the future by higher inflation rates in the PRC. For example, certain operating costs and expenses, such as employee compensation and raw material purchase prices, may increase as a result of higher inflation. Additionally, because a substantial portion of our assets consists of short-term investments, prepayments and other current assets, and long-term investments, high inflation could significantly reduce the fair value of these assets. We are not able to hedge our exposure to inflation risk in China.
Recent Accounting Pronouncements
For a discussion of recently issued accounting pronouncements, see Note 2-Significant Accounting Policy-(w) Recent accounting pronouncements not yet adopted to our unaudited condensed consolidated financial statements for the six months ended June 30, 2026 and 2025.
Critical Accounting Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, allowances for expected credit losses, fair value measurement for short-term investments, product warranty provision, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.
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Revenues
From January 1, 2019, the Company adopted the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), which requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following steps to recognize revenues: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation.
The core principle is that the Company recognizes revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled. This principle is centered on the transfer of control of the promised goods to the customer—revenue is recognized when the customer obtains control, rather than when the risks and rewards of ownership are transferred. Control refers to the ability to direct the use of the asset and obtain substantially all of the remaining benefits from it, including the ability to prevent other entities from directing its use or obtaining its benefits.
The Company primarily engages in the sales of energy storage system integration equipment and supporting accessories. The Company generates revenue from sales of such products through sales contracts including master agreements and sales orders from the customers, which contain fixed sales price, payment terms, specifications, delivery and acceptance terms, transportation terms, etc., and are all signed-off and stamped. The Company applied the guidance of ASC Topic 606-10-25-16 through 18 in order to verify which promises should be assessed for classification as distinct performance obligations.
The Company also identifies only one performance obligation in the contract, which is to deliver such products.
Revenue is recognized at the point in time upon the customer’s acceptance of products, which is when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to for the products sold.
The Company presents the contract in the unaudited condensed consolidated balance sheets as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.
A receivable is recorded when the Company has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.
The Company provides a standard warranty on its products, which is not sold separately and does not constitute a separate performance obligation. The warranty period generally ranges from one to eight years (or a minimum of 6,000 charge discharge cycles). The estimated warranty costs are accrued at the time revenue is recognized.
Safe Harbor Statement
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC, which are available for review at www.sec.gov.
| 17 |
Exhibit 99.2
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| As of June 30 | As of December 31 | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Short-term investments | ||||||||
| Accounts receivable | ||||||||
| Amounts due from related parties | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets held for sale associated with discontinued operation of ELPW | - | |||||||
| Total current assets | ||||||||
| Equity method investment | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Non-current assets held for sale associated with discontinued operation of ELPW | - | |||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Short-term loans-third parties | ||||||||
| Short-term loans-related parties | ||||||||
| Short-term loans | ||||||||
| Accounts payable | ||||||||
| Amounts due to related parties | - | |||||||
| Contract liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Provision for product warranty, current | ||||||||
| Lease liabilities, current | ||||||||
| Current liabilities held for sale associated with discontinued operation of ELPW | - | |||||||
| Total current liabilities | ||||||||
| Provision for product warranty, non-current | ||||||||
| Lease liabilities, non-current | ||||||||
| Non-current liabilities held for sale associated with discontinued operation of ELPW | - | |||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Class A Ordinary Shares, US$ | ||||||||
| Class B Ordinary Shares, US$ | ||||||||
| Common stock value | ||||||||
| Treasury shares | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Statutory Reserve | - | |||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity (deficit) | ||||||||
| * | ||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-1 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Unaudited | Unaudited | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| TOTAL OPERATING EXPENSES | ( | ) | ( | ) | ||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER (EXPENSE) INCOME | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Foreign currency exchange losses, net | ( | ) | ( | ) | ||||
| Share of profit from equity method investment | - | |||||||
| Fair value losses on short-term investments | ( | ) | - | |||||
| Other income | - | |||||||
| TOTAL NON OPERATING EXPENSE, NET | ( | ) | ( | ) | ||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| INCOME TAX EXPENSE | - | - | ||||||
| NET LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ||||
| DISCONTINUED OPERATIONS: | ||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||
| Gain on disposal of subsidiaries | - | |||||||
| NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS | ( | ) | ||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| Net income (loss) per share attributable to ordinary shareholders of the Company- Basic and Diluted * | ||||||||
| Continuing operations | ( | ) | ( | ) | ||||
| Discontinued operations | ( | ) | ||||||
| Total basic and diluted | $ | $ | ( | ) | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING USED IN CALCULATING BASIC AND DILUTED LOSS PER SHARE | ||||||||
| Class A and Class B Ordinary Shares | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-2 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| COMPREHENSIVE INCOME (LOSS) | $ | $ | ( | ) | ||||
| FS-3 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| Shares | Amount* | Shares | Amount* | shares | Capital | Reserve | Deficit | Income /(loss) |
(Deficit) | |||||||||||||||||||||||||||||||
Class A Ordinary Share | Class B Ordinary Share |
Additional | Other | Total Shareholders’ | ||||||||||||||||||||||||||||||||||||
| Ordinary Shares * | Ordinary Shares * | Treasury |
Paid-in | Statutory | Accumulated | Comprehensive |
Equity | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | shares | Capital | Reserve | Deficit | Income (loss) |
(Deficit) | |||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | - | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||
| Registration of ordinary shares in connection with share incentive plan | - | - | - |
( | ) | - | - | - | - | |||||||||||||||||||||||||||||||
| Net loss from continuing operations | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
| Net loss from discontinued operations | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | - | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||
| Shares | Amount* | Shares | Amount* | shares | Capital | Reserve | Deficit | Income (loss) | (Deficit) | |||||||||||||||||||||||||||||||
| Class A Ordinary Share | Class B Ordinary Share | Additional | Other | Total Shareholders’ | ||||||||||||||||||||||||||||||||||||
| Ordinary Shares * | Ordinary Shares * | Treasury | Paid-in | Statutory | Accumulated | Comprehensive | Equity | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | shares | Capital | Reserve | Deficit | Income (loss) | (Deficit) | |||||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Class A ordinary shares issued to investors, net of offering costs | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares for Debt Settlement | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class B to a shareholder | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Other comprehensive income/loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Disposal of subsidiaries | - | - | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | - | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-4 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Provision for losses on accounts receivable | - | |||||||
| Provision of obsolete inventory | - | |||||||
| Depreciation and amortization expense | ||||||||
| Interest on lease liabilities | ||||||||
| Amortization of operating and finance right-of-use assets | ||||||||
| Gain on disposals of property, plant and equipment | - | ( | ) | |||||
| Gain from debt forgiveness | - | ( | ) | |||||
| Provision (reversal) for warranty liability | ( | ) | ||||||
| Fair value losses on short-term investments | - | |||||||
| Share of profit from equity method investment | ( | ) | - | |||||
| Gain on disposal of subsidiaries | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | - | ( | ) | |||||
| Amounts due from related parties | ( | ) | - | |||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Long term accounts receivable | - | |||||||
| Accounts and notes payable | ( | ) | ||||||
| Amounts due to related parties | - | |||||||
| Contract liabilities | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Product warranty liability | ( | ) | ||||||
| Lease liability | ( | ) | - | |||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Proceeds from disposal of short term investments | - | |||||||
| Placement of short-term investments | ( | ) | - | |||||
| Placement of equity method investment | ( | ) | - | |||||
| Disposal of subsidiaries, net of cash disposed | ( | ) | - | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from borrowings from related parties | ||||||||
| Repayment of borrowings to related parties | ( | ) | - | |||||
| Proceeds from borrowings from third parties | ||||||||
| Repayments of borrowings to third parties | ( | ) | ( | ) | ||||
| Offering costs | ( | ) | - | |||||
| Proceeds from issuance of common stock | - | |||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash and cash equivalents and restricted cash, beginning of period | ||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | |||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Issuance of Class B ordinary shares for Debt Settlement | - | |||||||
| Issuance of Class B to a shareholder | - | |||||||
| Short term investment Redemption Proceeds Applied to Offset Loans | - | |||||||
| Lease liabilities arising from obtaining right-of-use assets | - | |||||||
The following tables provide a reconciliation of cash, cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
| As
of June 30, 2026 | As
of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash and cash equivalents, beginning of the period | $ | $ | ||||||
| Restricted cash, beginning of the period | ||||||||
| Total cash, cash equivalents and restricted cash at beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | ||||||||
| Restricted cash, end of the period | ||||||||
| Total cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| FS-5 |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Principal activities
Elong Power Holding Limited (“Elong Power” or “ELPW”) was incorporated under the laws of the Cayman Islands on August 18, 2023. Elong Power, through its subsidiaries (collectively “the Company”) noted below, divested its battery manufacturing subsidiary in March 2026 and transitioned to an asset-light business model focusing primarily on energy storage system integration, while retaining capabilities in research and development, sales and full-lifecycle services.
Reverse Recapitalization
On
November 21, 2024 (the “Closing Date”), Elong consummated the business combination with TMT Acquisition Corp (“TMT”),
following the approval of the transaction. At the Closing, Merger Sub merged with and into TMT, with TMT surviving the merger and becoming
a wholly owned subsidiary of Elong.
Elong
was determined to be the accounting acquirer as it comprises the ongoing operations, its senior management leads the combined company,
and its shareholders hold the majority of voting power after the transaction. The Business Combination is not a business combination
under ASC 805 because TMT was not considered a business. Accordingly, the transaction is accounted for as a reverse recapitalization,
which is equivalent to Elong issuing shares for the net monetary assets of TMT, accompanied by a recapitalization. As a result, Elong’s
historical financial statements became those of the combined company, with retrospective adjustments to reflect the reverse recapitalization.
SCHEDULE OF SUBSIDIARIES OF THE COMPANY
| Subsidiaries | Place of incorporation |
Date of incorporation |
Percentage of ownership |
Principal activities | ||||||
| Elong Power Holding Co., Limited | % | |||||||||
| Elong Power (Hong Kong) Holding Limited (“Elong Power (Hong Kong)”) | % | |||||||||
| Elong Power (Beijing) Co., Ltd. (“Elong Beijing”) | % | |||||||||
Disposal
On
December 15, 2025, the Company initiated its disposal plan of Elong Power International Co., Limited and its subsidiaries
(collectively referred to as the “Disposal Group”). On March 17, 2026, the Company completed the disposal of equity
interests in the Disposal Group to WAY (Hong Kong) Limited, a non-affiliated third party, at a purchase price of $
The Disposal Group consists of the following entities:
| ● | Elong Power International Co., Limited | |
| ● | Jing Yang (Hong Kong) International Limited | |
| ● | Jingyang Power (Ganzhou) Co., Ltd. | |
| ● | Huizhou Jingyang Energy Technology Co., Ltd. | |
| ● | Ganzhou Zhangyang Energy Technology Co., Ltd. | |
| ● | Zibo Jingyang New Energy Technology Co., Ltd. |
| FS-6 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to reflect the financial position, results of operations and cash flows of the Company. Significant accounting policies followed by the Company in the preparation of the accompanying unaudited condensed consolidated financial statements are summarized below.
(b) Principles of consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating activities.
(c) Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, allowances for expected credit losses, fair value measurement of short-term investments, product warranty provision, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.
(d) Functional currency and foreign currency translation
The Company’s reporting currency is the United States dollars (“$”). The functional currency of ELPW and its subsidiary which is incorporated in BVI, Cayman Islands and Hong Kong is United States dollars (“$”). The functional currency of the other subsidiaries is RMB. The determination of the respective functional currency is based on the criteria set out by Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.
Revenues and expenses of its subsidiaries have been translated into United States dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of shareholders’ equity. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods.
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:
SCHEDULE OF FOREIGN CURRENCY TRANSLATION EXCHANGE RATES
| Six months ended June 30, 2026 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB | |||||||
| Year ended December 31, 2025 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB | |||||||
| Six months ended June 30, 2025 | ||||||||
| Balance sheet, except for equity accounts | RMB | |||||||
| Income statement and cash flows | RMB |
| FS-7 |
(e) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and in banks and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less.
SCHEDULE OF CASH AND CASH EQUIVALENTS
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash and cash equivalents | $ | $ | ||||||
(f) Short term investment
The Company classifies fund investments with original investment terms exceeding three months but less than one year, restricted use trading cash deposited with broker-dealer securities accounts and quoted equity securities held-for-sale as short term investments.
Cash
held in such brokerage accounts may only be utilized for securities trading transactions and is unavailable for the Company’s
general purpose operating expenditures. Quoted equity securities are accounted for under ASC Topic 320, Investments-Debt and Equity
Securities, and measured at fair value as of each reporting date. All realized and unrealized gains and losses arising from equity
securities trading and fund related investment income have been recognized in the unaudited condensed consolidated statements of
operations and comprehensive loss. Unrealized losses related to these investments were $
(g) Accounts receivable
In January 2022, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. The Company’s estimation of allowance for doubtful accounts considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. The Company assesses collectability by pooling receivables that have similar risk characteristics and evaluates receivables individually when specific receivables no longer share those risk characteristics. For receivables evaluated individually, when it is determined that foreclosure is probable or when the debtor is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of collateral, expected credit losses are based on the fair value of the collateral at the reporting date. The adoption of ASC 326 did not have a material impact on the Company’s financial position, results of operations and cash flows. No credit impairment losses were recognized as of June 30, 2026 and December 31, 2025. The Company regularly reviews the creditworthiness of its customers to determine whether a credit impairment has occurred on their carrying amounts. The Company writes off accounts and contract receivables against the allowance when a balance is determined to be uncollectible.
| FS-8 |
(h) Equity method investment
The Company’s long-term investment represents equity interest in a limited liability partnership organization. The investment is accounted for under the equity method of accounting pursuant to ASC 323, Investments-Equity Method and Joint Ventures, as the investment provides the Company with the ability to exercise significant influence over the operating and financial activities of the investee. The investment is initially recorded at cost. The carrying amount is subsequently adjusted for the Company’s proportionate share of the investee’s net earnings or losses and reduced by distributions received. The investment is assessed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If the carrying amount of the investment exceeds its estimated fair value, an impairment loss is recognized in the statements of operations equal to the excess.
(i) Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and impairment charges. Depreciation is calculated primarily based on the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the assets:
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES
| Category | Estimated Useful Life | |
| Office equipment | ||
| Leasehold improvements | Shorter of lease term or estimated useful life of the assets |
(j) Fair value measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
| FS-9 |
When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
The carrying amounts of cash and cash equivalents, accounts receivable, amounts due from related parties, other receivables (included in “other current assets”), accounts payable, amounts due to related parties, short-term borrowings, other payables (included in “accrued expenses and other current liabilities”) approximate their fair value due to the short-term maturity of these instruments. The carrying value of lease liabilities approximate their fair value as they are measured at amortized cost using the incremental borrowing rate approximates the market interest rate. The Company’s short-term investments are carried at fair value (Level 1).
(k) Revenue recognition
From January 1, 2019, the Company adopted the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), which requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following steps to recognize revenues: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation.
The core principle is that the Company recognizes revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled. This principle is centered on the transfer of control of the promised goods to the customer—revenue is recognized when the customer obtains control, rather than when the risks and rewards of ownership are transferred. Control refers to the ability to direct the use of the asset and obtain substantially all of the remaining benefits from it, including the ability to prevent other entities from directing its use or obtaining its benefits.
The Company primarily engages in the sales of energy storage system integration equipment and supporting accessories. The Company generates revenue from sales of such products through sales contracts including master agreements and sales orders from the customers, which contain fixed sales price, payment terms, specifications, delivery and acceptance terms, transportation terms, etc., and are all signed-off and stamped. The Company applied the guidance of ASC Topic 606-10-25-16 through 18 in order to verify which promises should be assessed for classification as distinct performance obligations.
The Company also identifies only one performance obligation in the contract, which is to deliver such products.
Revenue is recognized at the point in time upon the control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to for the products sold.
A receivable is recorded when the Company has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.
The
Company provides a standard warranty on its products, which is not sold separately and does not constitute a separate performance obligation.
The warranty period generally ranges from one
| FS-10 |
Net revenues by product:
SCHEDULE OF NET REVENUES BY PRODUCT
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Energy storage system integration equipment & supporting accessories | $ | $ | ||||||
Contract Balances
The Company presents the contract in the unaudited condensed consolidated balance sheets as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.
Contract asset represent the Company’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time.
The
contract liabilities are advances from customers, which represent the cash received for goods in advance of revenue recognition and is
recognized as revenue when the Company fulfills its performance obligation. The Company’s advances from customers amounted to $
The table below presents the activity of contract liabilities during the six months ended June 30, 2026 and 2025, respectively.
SCHEDULE OF ACTIVITY OF CONTRACT LIABILITIES
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Deposits received | ||||||||
| Revenue recognized | ( |
( |
||||||
| Output Value-Added Tax | ( |
( |
||||||
| Exchange difference | ||||||||
| Balance at end of period | $ | $ | ||||||
(l) Product warranty
The Company provides a standard warranty on its products sold, which entails repair or replacement of non-conforming items, in conjunction with the sales of products.
The
Company’s product warranty generally ranges from one
The Company review and adjust the estimates to ensure that accruals are adequate to meet expected future warranty obligations. Initial warranty data is limited early in the launch of a new product and accordingly, future adjustments to the warranty accrual may be material.
| FS-11 |
The portion of the warranty that is expected to incur within the next 12 months is recorded in current liabilities, while the remaining balance is recorded in non-current liabilities on the unaudited consolidated balance sheets. Warranty expense is recorded as a component of cost.
The Company considers the standard warranty does not provide an incremental service to customers but rather assurance as to the quality of the energy storage system products, and therefore is not a separate performance obligation and should be accounted for in accordance with ASC 460, Guarantees.
(m) Cost of revenue
Cost of revenue includes the purchase cost of finished goods and accrued warranty expenses.
(n) Selling, general and administrative expenses
Selling
expenses consist primarily of employee salaries and business promotion expense. For the six months ended June 30, 2026 and 2025, selling
expenses were US$
General
and administrative expenses consist primarily of employee salaries, depreciation and amortization expenses, legal, and other professional
services fees, lease and other general corporate related expenses. For the six months ended June 30, 2026 and 2025, general and administrative
expenses were US$
(o) Related parties
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
(p) Employee benefits
Full-time
employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension
benefits, work-related injury benefits, maternity insurance, medical care, employee housing fund and other welfare benefits are provided
to the employees. Chinese labor regulations require that the PRC subsidiaries of the Company make contributions to the government for
these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government.
The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s
obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. For the six months ended June
30, 2026 and 2025, employee benefits expenses were $
(q) Income taxes
Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the unaudited condensed consolidated financial statements and their respective tax basis, and operating loss carryforwards. 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 taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive loss in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.
| FS-12 |
Uncertain tax positions
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, with a tax examination being presumed to occur. 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. Interest and penalties related to uncertain tax positions, if any, are recorded under accrued expenses and other current liabilities on its unaudited condensed consolidated balance sheets and under other expenses in its consolidated statements of comprehensive loss. The Company did not recognize any significant interest and penalties associated with uncertain tax positions for the six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.
(r) Value-added tax (“VAT”)
The
Company is subject to statutory VAT of
(s) Comprehensive income (loss)
The Company applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss is defined to include all changes in equity of the Company during a period arising from transactions and other events and circumstances except those resulting from investments by shareholders and distributions to shareholders. For the periods presented, the Company’s comprehensive loss includes net loss and other comprehensive loss, which primarily consists of the foreign currency translation adjustments.
(t) Lease
From January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842). The adoption of Topic 842 resulted in the presentation of right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheet. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Company elected the short-term lease exemption for all contracts with lease terms of 12 months or less.
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.
The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.
Right-of-use of assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. All right-of-use assets are reviewed for impairment annually. There was no impairment for right-of-use lease assets for the six months ended June 30, 2026 and 2025.
| FS-13 |
Lease liabilities
Lease liabilities are initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase-options that the Company is reasonably certain to exercise. Lease liabilities are measured at amortized cost using the effective-interest-rate method. It is remeasured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual-value guarantee, or if there is any change in the Company assessment of purchase-options, contract extensions or termination options.
(u) Net income (loss) per share
The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Earnings (losses) per ordinary share is computed by dividing net income by the weighted average number of ordinary shares issued and outstanding for the periods except that it does not include ordinary shares subject to forfeiture or cancellation. Diluted net income per share is computed using the weighted average number of ordinary shares and, if dilutive, potential ordinary shares outstanding during the period. Potentially dilutive securities have been excluded from the computation of diluted net income per share if their inclusion is anti-dilutive. Potential ordinary shares consist of the incremental ordinary shares issuable upon the exercise of stock options, warrants, and unvested restricted shares. The dilutive effect of outstanding stock options, warrants, and restricted shares is reflected in diluted earnings per share by application of the treasury stock method and the if-converted method, respectively. As of June 30, 2026, the Company had outstanding warrants that represent potential ordinary shares. As the Company reported a net loss from continuing operations for the periods presented, the inclusion of these potentially dilutive shares would have an anti-dilutive effect. Consequently, they were excluded from the computation of diluted net loss per share. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented.
In
accordance with ASC 260-10-45, the
(v) Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.
In
accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate
resources and in assessing performance. The Company’s revenue segments have similar economic characteristics and they are managed
as a single business unit. The Company uses the “management approach” in determining reportable operating segments. The management
approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating
decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has
been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about
allocating resources and assessing performance of the Company. The Company has determined that there is only
The Company’s long-lived assets are all located in China and substantially all monitoring and control activities of its operations are conducted in China. Therefore, no geographic information is presented.
| FS-14 |
(w) Recent accounting pronouncements not yet adopted
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, which clarifies the scope and disclosure requirements for interim financial reporting under ASC 270. The amendments introduce a principle requiring disclosure of events and transactions occurring after the end of the most recent annual reporting period that have a material impact on the entity and consolidate certain interim disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
3. DISCONTINUED OPERATIONS
On
March 17, 2026, the Company completed the disposal of equity interests in Elong Power International Co., Limited and its subsidiaries
to a non-affiliated third party for a purchase price of $
SCHEDULE OF ASSETS AND LIABILITIES FOR DISCONTINUED OPERATIONS OF THE DISPOSAL GROUP
| US$ | ||||
| Consideration: | ||||
| As of March 31, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable | - | |||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Operating lease right of use assets,net | ||||||||
| Finance lease right of use assets,net | ||||||||
| Total non current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term loan payable | ||||||||
| Accounts and notes payable | ||||||||
| Amounts due to related parties | ||||||||
| Contract liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Product warranty provision, current | ||||||||
| Total current liabilities | ||||||||
| Product warranty provision-non current | ||||||||
| Lease liabilities, non current | ||||||||
| Finance liabilities, non current | ||||||||
| Total non current liabilities | ||||||||
| Total liabilities | ||||||||
| Total net assets of the Disposal Group | $ | ( | ) | ( | ) | |||
| Gain on disposal before reclassification of cumulative foreign currency translation differences of the Disposal Group to profit or loss | $ | - | ||||||
| Reclassification of cumulative foreign currency translation losses of the Disposal Group to profit or loss | ( | ) | - | |||||
| Gain on disposal recognized in the unaudited condensed consolidated Statements of Operations and Comprehensive income (loss) | - | |||||||
| FS-15 |
Reconciliation of the major classes of losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and for six months ended June 30, 2025 is as follow:
SCHEDULE OF RECONCILIATION OF DISCONTINUED OPERATIONS
| For the three months ended March 31, | For the six months ended June 30, | |||||||
| 2026 | 2025 | |||||||
| Major classes of line items constituting pre-tax profit of discontinued operations | ||||||||
| Revenues | - | |||||||
| Cost of revenues | $ | - | $ | ( | ) | |||
| Selling expenses | - | ( | ) | |||||
| General and administrative expenses | - | ( | ) | |||||
| Interest expense,net | ( | ) | ( | ) | ||||
| Others,net | - | |||||||
| Loss from discontinued operations, before income tax | ( | ) | ( | ) | ||||
The condensed cash flows of the Disposed Group were as follows for the three months ended March 31, 2026 and for the six months ended June 30, 2025:
SCHEDULE OF CASH FLOWS OF DISPOSAL GROUP
| For the three months ended March 31, | For the six months ended June 30, | |||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Net cash generated from financing activities | $ | - | $ | |||||
4. SHORT TERM INVESTMENT
SCHEDULE OF SHORT TERM INVESTMENT
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Short term investment | ||||||||
| Total | $ | $ | ||||||
| FS-16 |
The Company classifies fund investments with original investment terms exceeding three months but less than one year, restricted use trading cash deposited with broker-dealer securities accounts and quoted equity securities held-for-sale as short term investments.
During the six-month period ended June 30, 2026, the Company disposed of all money-market fund investments classified as short term investments as at December 31, 2025. Accordingly, the Company had no remaining balance in these money-market fund investments and restricted use trading cash deposited with broker-dealer at the end of the interim period.
The Company executed purchases and disposals of quoted equity securities throughout the six-month period. All such quoted equity securities are measured at fair value (level 1) with changes in fair value recognized in net income. All realized trading gains or losses are presented within other income on the unaudited condensed consolidated statement of operations.
5. ACCOUNTS RECEIVABLE
Account receivable consisted of the following:
SCHEDULE OF ACCOUNTS RECEIVABLE
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accounts receivable | $ | $ | ||||||
| Total | $ | $ | ||||||
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Value added tax recoverable | $ | $ | ||||||
| Prepayments to suppliers | ||||||||
| Deposits | - | |||||||
| Loan receivables from third parties | - | |||||||
| Others | - | |||||||
| Total | $ | $ |
Loan receivables from third parties
The
amount represented interest-free loans of RMB
7. EQUITY METHOD INVESTMENT
In
May 2026, the Company and other partners incorporated a limited liability partnership. The Company holds
| FS-17 |
A summary of financial information for our equity method investee is as follows:
SCHEDULE OF FINANCIAL INFORMATION FOR EQUITY METHOD INVESTEE
| As of June 30, | ||||
| 2026 | ||||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | |||
| Prepaid expenses and other current assets | ||||
| Total current assets | ||||
| Total non current assets | - | |||
| Total assets | $ | |||
| LIABILITY AND SHAREHOLDERS’ EQUITY | ||||
| Total liability | - | |||
| Additional paid-in capital | ||||
| Retained earnings | ||||
| Accumulated other comprehensive (loss) income | ||||
| Total shareholders’ equity | ||||
| Total liability and shareholders’ equity | ||||
| Company equity method investments | ||||
For the six months ended June 30, 2026 | ||||
| USD | ||||
| Revenues | $ | - | ||
| Cost of revenues | - | |||
| Gross Profit | - | |||
| Interest income, net | ||||
| Net income | $ | |||
8. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment as of June 30, 2026 and December 31, 2025 consisted of the following:
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Office equipment | ||||||||
| Total Costs | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Carrying amount | $ | $ | ||||||
During
the six months ended June 30, 2026 and 2025, the Company incurred depreciation expense of $
9. LEASE
Operating Lease
In January 2025, the Company signed an office lease agreement with a third party for a period of three years, from April 14, 2025 to May 14, 2028.
Supplemental balance sheet information related to operating lease was as follows:
SCHEDULE OF OPERATING LEASE
As of June 30, 2026 | As
of December 31, 2025 | |||||||
| Right-of-use assets | $ | $ | ||||||
| Lease liabilities current | ||||||||
| Lease liabilities non-current | ||||||||
| Lease liabilities | $ | $ | ||||||
| FS-18 |
The components of lease expense for the six months ended June 30, 2026 and 2025 were as follows:
SCHEDULE OF COMPONENTS OF LEASE EXPENSE
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease expense | $ | $ | ||||||
| Total lease expense | $ | $ | ||||||
Cash
paid for operating lease liabilities was $
The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2026:
SCHEDULE OF MATURITIES OF LEASE LIABILITIES
| Operating leases | ||||
| 2026 (remaining of year) | ||||
| 2027 | ||||
| 2028 | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
Lease term and discount rate:
SCHEDULE OF LEASE TERM AND DISCOUNT RATE
As of June 30, 2026 | As
of December 31, 2025 | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Operating leases | ||||||||
| Weighted-average discount rate | ||||||||
| Operating leases | % | % | ||||||
10. SHORT TERM LOANS-UNRELATED PARTIES
As of June 30, 2026 and December 31, 2025, short term loans from third parties for working capital purposes were as following:
SCHEDULE OF SHORT TERM LOANS FROM THIRD PARTIES FOR WORKING CAPITAL PURPOSES
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Third party loans | ||||||||
| Total | $ | $ | ||||||
| Short term loans | $ | $ | ||||||
Third party loans as of June 30, 2026 and December 31, 2025 consisted of the following:
SCHEDULE OF THIRD PARTY LOANS
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Ms. Xiuxia Wang | ||||||||
| Mr. Hongshan Liu | - | |||||||
| Fujian Chuanzhiyuan Industrial Investment Co., Ltd. | ||||||||
| Chris Young | ||||||||
| Ma Xin | - | |||||||
| CISI Investment Limited | - | |||||||
| Ms. Li Xiaozhen | - | |||||||
| Major Goal Limited | - | |||||||
| Total | $ | $ | ||||||
| FS-19 |
Ms. Xiuxia Wang
In
December 2024, the Company obtained aggregate borrowings of RMB
Mr. Hongshan Liu
On
December 31, 2024, the Company obtained an unsecured loan of RMB
Fujian Chuanzhiyuan Industrial Investment Co., Ltd.
On
December 30, 2024, the Company borrowed a revolving credit loan of RMB
Chris Young
On
October 21, 2025, the Company obtained an unsecured loan of RMB
Ma Xin
On
September 19, 2025, the Company borrowed an unsecured credit loan of RMB
CISI Investment Limited
In
2025, Jingyang HK transferred its note payable of RMB
Ms. Li Xiaozhen
As
of the merger date on November 21, 2024, the Company assumed liabilities of TMT upon completion of the merger, including a
short-term, interest-free loan of RMB
| FS-20 |
Major Goal Limited
On
June 26, 2026, the Company obtained an unsecured loan of RMB
Mr. Kuan Ren
During
the six months ended June 30, 2026, the Company received proceeds of RMB
11. ACCOUNTS PAYABLE
Accounts payable consisted of the following:
SCHEDULE OF ACCOUNTS PAYABLE
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accounts payable | $ | $ | ||||||
12. ACCRUED EXPENSES AND OTHER LIABILITIES
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accrued payroll and welfare | $ | $ | ||||||
| Interest payable | ||||||||
| Accrued professional fees | - | |||||||
| Loan payables to third parties | - | |||||||
| Others | ||||||||
| Total | $ | $ | ||||||
Loan payables to third parties
The
amount represented interest-free loans of RMB
| FS-21 |
13. PRODUCT WARRANTY PROVISION
The movement of product warranty provision is as following:
SCHEDULE OF MOVEMENT OF PRODUCT WARRANTY PROVISION
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | - | |||||
| Additions | - | |||||||
| Foreign exchange adjustment | - | |||||||
| Balance at end of period | - | |||||||
| Less: Current portion | - | |||||||
| Non-current portion | $ | - | ||||||
A warranty provision is made based on past experience and future expectations and an assessment of the probability of an outflow for the warranty obligations as a whole.
14. INCOME TAXES
Corporate income tax
Cayman Islands and British Virgin Islands (“BVI”)
Under the current laws of the Cayman Islands, Elong Power Holding Limited (“Elong Power”) is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
The Company’s subsidiary, Elong Power Holding Co., Limited (“Elong Power BVI”) is incorporated in the BVI and under the current laws of the BVI, Elong Power BVI is not subject to tax on income or capital gain. In addition, payments of dividend by the subsidiary to their shareholders are not subject to withholding tax in the BVI.
Hong Kong
Under
the current Hong Kong Inland Revenue Ordinance,
The PRC
The
Company’s subsidiaries that are each incorporated in the PRC are subject to Corporate Income Tax (“CIT”) on the taxable
income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws
(“PRC Income Tax Laws”) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company’s PRC subsidiaries
are subject to a CIT statutory rate of
The Company’s provision for income tax expenses consisted of:
SCHEDULE OF PROVISION FOR INCOME TAXES EXPENSES
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| PRC income tax | ||||||||
| Current | $ | - | $ | - | ||||
| Total | $ | - | $ | - | ||||
| FS-22 |
Reconciliations of the income tax expenses (benefits) computed by applying the PRC statutory income tax rate of 25% to the Company’s income tax expenses for the six months ended June 30, 2026 and 2025 presented are as follows:
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
| 2026 | 2025 | |||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Loss from operations in mainland China | $ | ( | ) | $ | ( | ) | ||
| Income from operations in Hong Kong and others | ( | ) | ||||||
| Income from operations before income taxes | ( | ) | ||||||
| Tax credit at PRC corporate income tax rate
of | ( | ) | ||||||
| Non-taxable income non-deductible expenses | ( | ) | ||||||
| Changes in valuation allowance | ||||||||
| Income tax expenses | $ | - | $ | - | ||||
The
Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not
realized. This assessment considers, among other matters, the nature, frequency and severity of recent loss and forecasts of future profitability.
These assumptions require significant judgment, and the forecasts of future taxable income are consistent with the plans and estimates
the Company is using to manage the underlying businesses. The statutory income tax rate of
The Company’s deferred tax assets consisted of the following components:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
As of June 30, 2026 | As of December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carry-forwards | $ | $ | ||||||
| Accrued cost and expense | - | |||||||
| Provision for warranty liability | ||||||||
| Lease expense | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | - | $ | - | ||||
| FS-23 |
A valuation allowance is provided against deferred tax assets when the Company determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future.
The
Company has tax losses arising in Mainland China of $
15. EMPLOYEE BENEFIT PLAN
Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing provident funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Currently, our PRC subsidiaries are making contributions to the plans based on the minimum standards as required by law for most employees. With respect to the underpaid or unpaid employee benefits, we may be required to complete registrations, make up the contributions for these plans as well as to pay late fees and fines. If we are subject to late fees or fines in relation to the underpaid or unpaid employee benefits, our financial condition and results of operations may be adversely affected. We may also be subject to regulatory investigations and other penalties if our other employment practices are deemed to be in violation of relevant PRC laws and regulations.
The
Company accrues for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by
the local government. The total employee benefits expensed as incurred were $
16. RELATED PARTY BALANCES AND TRANSACTIONS
The principal related parties with which the Company had transactions as of June 30, 2026 and December 31, 2025, and also for the six months ended June 30, 2026 and 2025 presented are as follows:
a) Related Parties
SCHEDULE OF RELATED PARTIES AND THEIR RELATIONSHIPS
| Name | Relationship with the Company | |
| Beijing Xinlongmai Enterprise Management Co., Ltd. (“Beijing Xinlongmai”) | ||
| Huizhou Highpower Technology Co., Ltd. (“Huizhou Highpower”) | ||
| Ms. Xiaodan Liu | ||
| Beijing Danwu Technology Co., Ltd. |
b) Related party transactions
The following table consists of the purchases that have been entered into with related parties:
SCHEDULE OF RELATED PARTY TRANSACTIONS
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Lease expense for renting a vehicle from a related party | ||||||||
| –Ms. Xiaodan Liu | $ | - | $ | |||||
| Lease from a related party | $ | - | $ | |||||
| FS-24 |
c) Short-term loans payable to related parties
| As of June 30, | As of December 31, | |||||||||
| Note | 2026 | 2025 | ||||||||
| (Unaudited) | (Audited) | |||||||||
| Beijing Xinlongmai Enterprise Management Co., Ltd. (“Beijing Xinlongmai”) | (a) | $ | - | $ | ||||||
| Huizhou Highpower Technology Co., Ltd. (“Huizhou Highpower”) | (a) | |||||||||
| Ms. Xiaodan Liu | (b) | - | ||||||||
| Beijing Danwu Technology Co., Ltd. | (c) | - | ||||||||
| Total | $ | $ | ||||||||
| Short-term loans payable to related parties | $ | $ | ||||||||
| (a) |
In
2025, Huizhou Jingyang transferred its debt of RMB
|
(b) |
In
2025, Jingyang HK borrowed RMB
During the six months ended June 30, 2026, the Company made cash repayments of RMB |
| (c) |
| FS-25 |
For
the six months ended June 30, 2026 and 2025 interest expense of $
d) Amounts due from related parties
Amounts due from related parties consisted of the following for the periods indicated:
SCHEDULE OF AMOUNTS DUE FROM RELATED PARTIES
| Relationship | As of June 30, 2026 | As of December 31, 2025 | Note | |||||||||
| (Unaudited) | (Audited) | |||||||||||
| Ms. Xiaodan Liu | $ | $ | Lease deposit and receivable | |||||||||
As
of June 30, 2026 and December 31, 2025, the Company had security deposits of $
On
June 23, 2026, the Company entered into a securities purchase agreement with GRACEDAN CO., LIMITED, pursuant to which the Company agreed
to issue and sell to GRACEDAN CO., LIMITED
e) Amounts due to related parties
Amounts due to related parties consisted of the following for the periods indicated:
SCHEDULE OF AMOUNTS DUE TO RELATED PARTIES
| Relationship | As of June 30, 2026 | As of December 31, 2025 | Note | |||||||||
| Ms. Xiaodan Liu | - | Payable for employee reimbursement | ||||||||||
| Ms. Xiaodan Liu | - | Interest payable | ||||||||||
| Total | $ | - | $ | |||||||||
17. EQUITY
Ordinary shares
At
the annual general meeting of shareholders of the Company held on January 6, 2026, the shareholders approved that the Company’s
authorized share capital be increased from US$
| FS-26 |
On
December 2, 2025, the Company effected a
The
par value of the Class A ordinary shares and Class B ordinary shares was increased in proportion to the cumulative ratio of the share
consolidation to $
As
of June 30, 2026 and December 31, 2025, the Company had
As
of June 30, 2026 and December 31, 2025, the Company had
18. SEGMENT REPORTING
The Company’s chief operating decision maker has been identified as the Chief Executive Officer (“CEO”) who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Company.
The
Company determined that it operated in
The Company primarily operates in the PRC and substantially all of the Company’s long-lived assets are located in the PRC.
SCHEDULE OF LONG-LIVED ASSETS
| For the Six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenues | $ | $ | ||||||
| Less: | ||||||||
| Cost of revenues | ||||||||
| Staff cost | ||||||||
| Lease expense | ||||||||
| Depreciation and amortization expense | - | |||||||
| Professional fee | ||||||||
| Interest expense (income) | ||||||||
| Other segment items(i) | ||||||||
| Segment net loss | ( | ) | ( | ) | ||||
| Consolidated net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| (i) |
| FS-27 |
19. COMMITMENTS AND CONTINGENCIES
(i)
The total future minimum lease payments of property management fee and short-term lease under the non-cancellable operating lease with respect to the office as of June 30, 2026 are payable as follows:
SCHEDULE OF MATURITIES OPERATING COMMITMENTS LEASE LIABILITIES
| Lease Commitment | ||||
| Within 1 year | ||||
| 2-3 years | ||||
| Total | $ | |||
As
of June 30, 2026 and 2025, the Company had
(ii) Litigation
As
of December 31, 2025, there were 27 ongoing litigations associated with the Company’s subsidiaries under discontinued operations. The estimated liabilities amount total $
Following the completion of the disposal of these subsidiaries, the Group is no longer exposed to the potential liabilities associated with these litigations. As of June 30, 2026, the Company was not a party to any material pending litigation, legal claims or arbitration proceedings.
20. CONCENTRATION AND CREDIT RISK
(a) Customer Concentrations
The Company had the following customers that individually comprised 10% or more of net revenue for the six months ended June 30, 2026 and 2025 as follows:
| * | represents percentage less than 10% |
SCHEDULE OF CUSTOMER CONCENTRATIONS
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Percentage of the Company’s sales of finished goods | ||||||||
| Customer A | % | -* | % | |||||
| Customer B | % | -* | % | |||||
| Customer C | -* | % | % | |||||
| FS-28 |
The Company had the following customers that individually comprised 10% or more of net accounts receivable (including VAT) as of June 30, 2026 and December 31, 2025 as follows:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Percentage of the Company’s accounts receivable | ||||||||
| Customer A | % | -* | % | |||||
| Customer D | -* | % | % | |||||
| * |
(b) Supplier Concentrations
The Company relies on third parties for the supply of finished goods. In instances where these parties fail to perform their obligations, the Company may find alternative suppliers in the open market.
The Company had the following suppliers that individually comprised 10% or more of net purchases for the six months ended June 30, 2026 and 2025 as follows:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Percentage of the Company’s net purchase of finished goods | ||||||||
| Supplier A | % | -* | % | |||||
| Supplier B | % | -* | % | |||||
| Supplier C | -* | % | % | |||||
| * | represents percentage less than 10% |
The Company had the following suppliers that individually comprised 10% or more of accounts payable as of June 30, 2026 and December 31, 2025 as follows:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Percentage of the Company’s accounts payable | ||||||||
| Supplier B | -* | % | % | |||||
| Supplier D | % | -* | % | |||||
| * |
(c) Credit Risk
Assets
that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The
maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2026, cash and
cash equivalents of $
The Company’s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.
| FS-29 |
21. SUBSEQUENT EVENTS
The Company has evaluated subsequent events and transactions that occurred after the balance sheet date through the date the unaudited condensed consolidated financial statements were issued and no subsequent events, other than those noted below, occurred that require accrual or disclosure.
In
July 2026, the Company completed one round of financing and received net proceeds of approximately $
On
August 10, 2026, the Company completed one round of financing and received net proceeds of approximately $
On
August 10, 2026, the Company effected a
During August 2026, the Company
generated aggregate gross proceeds of approximately $
On
August 27, 2026, the Company held an extraordinary general meeting (“EGM”) of shareholders, at which all ten
proposals submitted to shareholders were approved by the shareholders. Key approved resolutions include: ratification of the
| FS-30 |
Exhibit 99.3
Elong Power Holding Limited Announces First Half 2026 Financial Results
BEIJING, October 6, 2026 / Globe Newswire / - Elong Power Holding Limited (Elong Power, NASDAQ: ELPW, together with its subsidiaries and consolidated entities, the “Company”) today announced its unaudited financial results for the first half of fiscal year 2026 ended June 30, 2026 (the “First Half of 2026”). The Company has completed the divestment of its lithium battery manufacturing business, fully pivoted to an asset-light energy storage system integration business, and completed offerings with aggregate gross proceeds of approximately US$20 million, laying a solid funding foundation for its global energy storage market expansion.
First Half 2026 Financial and Operating Highlights
| ● | Net revenue was US$2.90 million for the first half of fiscal year 2026, representing a substantial increase of 14,977% from US$19,229 in the same period of the prior year. This growth was primarily attributable to the significant ramp-up in sales of our energy storage system integration equipment and supporting accessories business; | |
| ● | Gross profit was US$8,994 for the first half of fiscal year 2026, representing an increase of 368% from US$1,923 in the same period of the prior year; gross margin declined from 10.00% in the same period of the prior year to 0.3%, primarily due to the thin-margin operation of the energy storage system integration equipment and supporting accessories sales business in its early stage; | |
| ● | Net income was US$20.49 million for the first half of fiscal year 2026, compared with a net loss of US$2.66 million in the same period of the prior year. This result was driven by a one-time, non-operating gain of US$22.61 million on the disposal of the lithium battery manufacturing business; | |
| ● | Net loss from continuing operations (sales of energy storage system integration equipment and supporting accessories) was US$2.11 million for the first half of fiscal year 2026, widening from a net loss of US$1.42 million in the same period of the prior year; | |
| ● | Both basic and diluted earnings per share were US$411 for the first half of fiscal year 2026, compared with a loss per share of US$3,071 in the same period of the prior year. The per-share amounts give retroactive effect to the 1-for-45 reverse share split effected August 10, 2026, after period end. |
Management Commentary
Elong Power’s management stated: “The first half of 2026 marked a significant change in the Company’s business. We completed the divestment of our lithium battery manufacturing business and recognized a non-operating disposal gain, thereby pivoting to an asset-light energy storage system integration business and concentrating resources on the research and development and market development of energy storage products. Meanwhile, the Company completed an approximately US$20 million public market financing during the first half of 2026, providing solid funding support for energy storage product research and development and market promotion, and laying the foundation for the Company’s global energy storage market expansion. We believe that our asset-light model focused on the energy storage integration business will help drive long-term, sustainable value creation for the Company.”
Business Progress and Operational Review
1. Asset Divestment and Strategic Transformation: In March 2026, the Company completed the divestment of its lithium battery manufacturing subsidiary, adopted an asset-light operating model, and focused on the energy storage system integration business, while retaining its research and development, sales and full-lifecycle service capabilities. The disposal gains recognized from the divestment provided the primary support for the turnaround to profitability in the current period.
2. Public Market Financing: The Company completed offerings with aggregated gross proceeds of approximately US$20 million during the first half of 2026, providing funding support for energy storage product research and development and market promotion, and facilitating its global energy storage market expansion.
3. Operating Results: Net revenues in the current period were derived almost entirely from the sales of energy storage system integration equipment and supporting accessories. This business was still in its early stage with an extremely low revenue base in the same period of the prior year. During the current period, the Company focused on expanding its customer base and securing orders for energy storage products, and sales volume increased significantly, driving revenue from US$19,229 to US$2.90 million. Meanwhile, the business is currently a thin-margin business with limited per-unit gross profit. As sales volume grew, the consolidated gross margin declined from 10.00% in the same period of the prior year to 0.3%, with gross profit of only US$8,994, which was insufficient to cover selling, administrative and other operating expenses, resulting in a net loss of US$2.11 million from continuing operations in the current period.
About Elong Power
Elong Power Holding Limited is an exempted company incorporated under the laws of the Cayman Islands. Adhering to its development strategy of “Asset-Light, R&D-Intensive, AI + Energy Storage, Global Scenario Layout”, the Company focuses on lithium battery energy storage system core business, with strategic layout covering overseas residential & commercial and industrial (C&I) energy storage, as well as grid-side energy storage in China. The Company is committed to delivering high-reliability, cost-effective and intelligent energy storage system solutions to global customers. Elong Power is chaired and led by Ms. Xiaodan Liu as Chief Executive Officer.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” and similar expressions, and include statements regarding the Company’s business strategy, its transition to an energy storage system integration business, its global expansion, its use of financing proceeds and its future results of operations. Such statements involve risks and uncertainties, including, among others: the Company’s limited operating history in the energy storage business; its ability to achieve positive gross margins and profitability from continuing operations; its need for additional financing and its ability to continue as a going concern; customer and supplier concentration; competition; related-party transactions; maintaining its Nasdaq listing; PRC regulatory, economic and currency risks; and the other risks described under “Item 3. Key Information—D. Risk Factors” in the Company’s most recent Annual Report on Form 20-F and other SEC filings. Actual results may differ materially. Except as required by law, the Company undertakes no obligation to update any forward-looking statement.
Investor & Media Contact
Elong Power Investor Relations
Email: ir@elongpower.com
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| As of June 30 | As of December 31 | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 5,939,950 | 443,591 | ||||||
| Short-term investments | 2,940,490 | 7,165,232 | ||||||
| Accounts receivable | 220,295 | 889,533 | ||||||
| Amounts due from related parties | 138,091 | 71,499 | ||||||
| Prepaid expenses and other current assets | 8,874,078 | 2,066,487 | ||||||
| Current assets held for sale associated with discontinued operation of ELPW | - | 1,240,751 | ||||||
| Total current assets | 18,112,904 | 11,877,093 | ||||||
| Equity method investment | 4,572,796 | |||||||
| Property, plant and equipment, net | 100,255 | 117,453 | ||||||
| Right-of-use assets, net | 59,074 | 71,751 | ||||||
| Non-current assets held for sale associated with discontinued operation of ELPW | - | 15,674,938 | ||||||
| Total non-current assets | 4,732,125 | 15,864,142 | ||||||
| Total assets | 22,845,029 | 27,741,235 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Short-term loans-third parties | 1,937,582 | 7,498,469 | ||||||
| Short-term loans-related parties | 4,679,224 | 2,030,366 | ||||||
| Accounts payable | 46,234 | 875,063 | ||||||
| Amounts due to related parties | - | 79,773 | ||||||
| Contract liabilities | 169,470 | 2,038,433 | ||||||
| Accrued expenses and other current liabilities | 842,508 | 1,812,778 | ||||||
| Provision for product warranty, current | 182,006 | 83,784 | ||||||
| Lease liabilities, current | 33,702 | 32,074 | ||||||
| Current liabilities held for sale associated with discontinued operation of ELPW | - | 11,436,442 | ||||||
| Total current liabilities | 7,890,726 | 25,887,182 | ||||||
| Provision for product warranty, non-current | 15,120 | 638 | ||||||
| Lease liabilities, non-current | 20,193 | 41,644 | ||||||
| Non-current liabilities held for sale associated with discontinued operation of ELPW | - | 24,555,631 | ||||||
| Total non-current liabilities | 35,313 | 24,597,913 | ||||||
| Total liabilities | 7,926,039 | 50,485,095 | ||||||
| Class A Ordinary Shares, US$0.576 par value, 333,333,333 shares authorized, 1,065 shares issued and 769 outstanding as of December 31, 2025; 145,073* shares issued and 144,778 outstanding as of June 30, 2026; | 83,392 | 443 | ||||||
| Class B Ordinary Shares, US$0.576 par value, 83,333,333 shares authorized, 101 shares issued and outstanding as of December 31, 2025; 2,545 shares issued and outstanding as of June 30, 2026* | 1,466 | 58 | ||||||
| Treasury shares | (80 | ) | (80 | ) | ||||
| Additional paid-in capital | 67,725,796 | 51,070,354 | ||||||
| Statutory Reserve | - | 708,470 | ||||||
| Accumulated deficit | (53,271,564 | ) | (74,474,141 | ) | ||||
| Accumulated other comprehensive (loss) income | 379,980 | (48,964 | ) | |||||
| Total shareholders’ equity (deficit) | 14,918,990 | (22,743,860 | ) | |||||
| Total liabilities and shareholders’ equity (deficit) | 22,845,029 | 27,741,235 | ||||||
| * | Including 295 shares issued but not outstanding, consisting of 156 forfeited Earnout Shares pending cancellation and 139 shares held as treasury stock reserved for future issuance, as discussed in Note 17. | |
| * | Giving retroactive effect to the 1-for-45 reverse share split effected on August 10, 2026. |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Unaudited | Unaudited | |||||||
| Revenues | $ | 2,899,110 | $ | 19,229 | ||||
| Cost of revenues | (2,890,116 | ) | (17,306 | ) | ||||
| GROSS PROFIT | 8,994 | 1,923 | ||||||
| OPERATING EXPENSES | ||||||||
| Selling expenses | (505 | ) | (19,985 | ) | ||||
| General and administrative expenses | (1,809,901 | ) | (1,252,874 | ) | ||||
| TOTAL OPERATING EXPENSES | (1,810,406 | ) | (1,272,859 | ) | ||||
| OPERATING LOSS | (1,801,412 | ) | (1,270,936 | ) | ||||
| OTHER (EXPENSE) INCOME | ||||||||
| Interest income | 59,148 | 200 | ||||||
| Interest expense | (206,698 | ) | (22,899 | ) | ||||
| Foreign currency exchange losses, net | (255,926 | ) | (128,947 | ) | ||||
| Share of profit from equity method investment | 180 | - | ||||||
| Fair value losses on short-term investments | (186,854 | ) | - | |||||
| Other income | 281,267 | - | ||||||
| TOTAL NON OPERATING EXPENSE, NET | (308,883 | ) | (151,646 | ) | ||||
| LOSS BEFORE INCOME TAXES | (2,110,295 | ) | (1,422,582 | ) | ||||
| INCOME TAX EXPENSE | - | - | ||||||
| NET LOSS FROM CONTINUING OPERATIONS | (2,110,295 | ) | (1,422,582 | ) | ||||
| DISCONTINUED OPERATIONS: | ||||||||
| Loss from discontinued operations | (2,002 | ) | (1,232,895 | ) | ||||
| Gain on disposal of subsidiaries | 22,606,404 | - | ||||||
| NET INCOME(LOSS) FROM DISCONTINUED OPERATIONS | 22,604,402 | (1,232,895 | ) | |||||
| NET INCOME (LOSS) | $ | 20,494,107 | $ | (2,655,477 | ) | |||
| Net income (loss) per share attributable to ordinary shareholders of the Company-Basic and Diluted * | ||||||||
| Continuing operations | (42.36 | ) | (1,645.40 | ) | ||||
| Discontinued operations | 453.73 | (1,426.00 | ) | |||||
| Total basic and diluted | $ | 411.37 | $ | (3,071.40 | ) | |||
| WEIGHTED AVERAGE SHARES OUTSTANDING USED IN CALCULATING BASIC AND DILUTED LOSS PER SHARE | ||||||||
| Class A and Class B Ordinary Shares | 49,819 | 865 | ||||||
| * | Giving retroactive effect to the 1-for-45 reverse share split effected on August 10, 2026. |
ELONG POWER HOLDING LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Amount in U.S. dollars, except for number of shares or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | 20,494,107 | $ | (2,655,477 | ) | |||
| Provision for losses on accounts receivable | - | 23,132 | ||||||
| Provision of obsolete inventory | - | 148,912 | ||||||
| Depreciation and amortization expense | 25,488 | 60,221 | ||||||
| Interest on lease liabilities | 1,323 | 3,678 | ||||||
| Amortization of operating and finance right-of-use assets | 14,883 | 820,287 | ||||||
| Gain on disposals of property, plant and equipment | - | (66,138 | ) | |||||
| Gain from debt forgiveness | - | (7,218 | ) | |||||
| Provision (reversal) for warranty liability | 108,876 | (153,845 | ) | |||||
| Fair value losses on short-term investments | 186,854 | - | ||||||
| Share of profit from equity method investment | (180 | ) | - | |||||
| Gain on disposal of subsidiaries | (22,606,404 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 682,962 | (276,816 | ) | |||||
| Inventories | - | (38,474 | ) | |||||
| Amounts due from related parties | (128,072 | ) | - | |||||
| Prepaid expenses and other current assets | (7,349,365 | ) | (28,014 | ) | ||||
| Long term accounts receivable | - | 99,183 | ||||||
| Accounts and notes payable | (795,842 | ) | 50,904 | |||||
| Amounts due to related parties | - | 140,972 | ||||||
| Contract liabilities | (1,791,605 | ) | 150,313 | |||||
| Accrued expenses and other current liabilities | 4,106,253 | 156,703 | ||||||
| Product warranty liability | 53,791 | (38,229 | ) | |||||
| Lease liability | (53,895 | ) | - | |||||
| Net cash used in operating activities | (7,050,826 | ) | (1,609,906 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property, plant and equipment | (5,128 | ) | (62,254 | ) | ||||
| Proceeds from disposal of short term investments | 2,045,400 | - | ||||||
| Placement of short-term investments | (4,132,849 | ) | - | |||||
| Placement of equity method investment | (4,572,616 | ) | - | |||||
| Disposal of subsidiaries, net of cash disposed | (123,021 | ) | - | |||||
| Net cash used in investing activities | (6,788,214 | ) | (62,254 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from borrowings from related parties | 4,568,835 | 1,280,093 | ||||||
| Repayment of borrowings to related parties | (873,231 | ) | - | |||||
| Proceeds from borrowings from third parties | 1,289,909 | 322,045 | ||||||
| Repayments of borrowings to third parties | (2,189,134 | ) | (31,269 | ) | ||||
| Offering costs | (1,702,120 | ) | - | |||||
| Proceeds from issuance of common stock | 18,328,919 | - | ||||||
| Net cash provided by financing activities | 19,423,178 | 1,570,869 | ||||||
| Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | (216,732 | ) | (16,182 | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | 5,367,406 | (117,473 | ) | |||||
| Cash and cash equivalents and restricted cash, beginning of period | 572,544 | 318,001 | ||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 5,939,950 | 200,528 | |||||
| Supplemental disclosure of cash flow information: | ||||||||
| Issuance of Class B ordinary shares for Debt Settlement | 48,600 | - | ||||||
| Issuance of Class B to a shareholder | 64,400 | - | ||||||
| Short term investment Redemption Proceeds Applied to Offset Loans | 6,289,040 | - | ||||||
| Lease liabilities arising from obtaining right-of-use assets | - | 311,871 | ||||||