INLIF Ltd earns $1.01M in first-half 2026
INLIF reported higher revenue and positive net income for the six-month period, while operating activities used cash.
INLIF Ltd. (INLF) reported revenue of $12.94 million for the six months ended June 30, 2026, compared with $10.27 million in the prior-year period. Gross profit was $4.65 million, and net income was $1.01 million, versus a net loss of $1.98 million a year earlier. Operating income was $1.12 million, compared with an operating loss of $2.07 million.
Cash and cash equivalents were $45.47 million as of June 30, 2026, versus $6.72 million at December 31, 2025. Operating activities used $3.27 million of cash, while investing activities used $14.88 million, including $11.84 million for property, plant and equipment. Financing activities provided $56.25 million, including $32.34 million in PIPE net proceeds and $21.15 million in at-the-market net proceeds.
Two customers accounted for 32.39% and 25.97% of six-month revenue. The company also approved a 1-for-200 consolidation of Class A and Class B ordinary shares, effective for trading July 6, 2026. A US$3.0 million investment management agreement entered during the period has a 12-month term and provides a minimum annualized return of 5%.
Positive
- Six-month revenue was $12.94 million, versus $10.27 million in 2025.
- INLIF recorded $1.01 million net income after a $1.98 million prior-year loss.
Negative
- Operating cash use was $3.27 million, versus $2.94 million in 2025.
- Two customers accounted for 32.39% and 25.97% of six-month 2026 revenue.
Filing Explained
The retrospectively adjusted Class A count reached 1,046,390 by June 30, compared with 2,000 at year-end.
This Form 6-K furnishes unaudited interim results and reports completed PIPE and at-the-market share sales; those Class A issuances increased the share count and reduce existing holders’ percentage ownership, absent offsetting changes.
After reflecting both share consolidations, the statements show 63,129 Class A shares issued in the PIPE and 981,261 in the ATM; Class A shares outstanding were 1,046,390 on
The company reports that PRC entities are restricted in transferring assets to the parent and that paid-in capital, additional paid-in capital and statutory reserves totaling
The filing separately identifies
Key Figures
Key Terms
share consolidation financial
investment management agreement financial
contract liabilities financial
weighted average discount rate financial
FAQ
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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 September
Commission File Number:
No. 88, Hongsi Road
Yangxi New Area, Honglai Town
Nan’an City, Quanzhou
The People’s Republic of China
(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 ☐
Interim Results for the Six Months Ended June 30, 2026
INLIF LIMITED, a Cayman Islands exempted company (the “Company”) is furnishing this current report on Form 6-K (this “Report”) to provide its unaudited condensed consolidated interim financial statements as of June 30, 2026 and for the six months ended June 30, 2026 and 2025 (the “Interim Results”), attached hereto as Exhibit 99.1.
The Company’s operating and financial review and prospects in connection with the Interim Results is furnished as Exhibit 99.2 to this Report.
Press Release Announcing Interim Results
On September 24, 2026, the Company published a press release entitled “INLIF LIMITED Reports First Half of Fiscal Year 2026 Financial Results”, a copy of which is attached as Exhibit 99.3 hereto.
Forward-Looking Statements
Statements in this Report with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “approximate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.
All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Incorporation By Reference
This report, including the exhibits included hereto, shall be deemed to be incorporated by reference into: (i) the Company’s shelf registration statement on Form F-3 (File No. 333-292580) (the “Registration Statement”), which Registration Statement was declared effective by the SEC on January 12, 2026, and (ii) the Company’s registration statement on Form S-8 (File No. 333-289640), which was filed with the SEC on August 15, 2025, and into each prospectus or prospectus supplement outstanding under the Registration Statement, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
1
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 | |
| 99.2 | 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 | |
| 99.3 | Press Release | |
| 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
SIGNATURE
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.
Dated: September 24, 2026
| INLIF LIMITED | ||
| By: | /s/ Rongjun Xu | |
| Name: | Rongjun Xu | |
| Title: | Chief Executive Officer | |
| By: | /s/ Yanting Chen | |
| Name: | Yanting Chen | |
| Title: | Chief Financial Officer | |
3
Exhibit 99.1
INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars, except for the number of shares)
| As of June 30, 2026 |
As of December 31, 2025 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | — | |||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepayments and other current assets | ||||||||
| Amounts due from related parties | ||||||||
| TOTAL CURRENT ASSETS | $ | $ | ||||||
| NON-CURRENT ASSETS: | ||||||||
| Property, plant, and equipment, net | $ | $ | ||||||
| Land-use rights, net | ||||||||
| Intangible assets, net | ||||||||
| Finance lease assets | ||||||||
| Deferred tax assets | ||||||||
| TOTAL NON-CURRENT ASSETS | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | $ | ||||||
| Bank loans | ||||||||
| Contract liabilities | ||||||||
| Accrued expenses and other payables | ||||||||
| Warranty liabilities | ||||||||
| Income taxes payable | — | |||||||
| Amounts due to related parties | ||||||||
| Current finance lease liabilities | ||||||||
| TOTAL CURRENT LIABILITIES | $ | $ | ||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Finance lease liabilities | $ | — | $ | |||||
| TOTAL NON-CURRENT LIABILITIES | $ | — | $ | |||||
| TOTAL LIABILITIES | $ | $ | ||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 22) | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Class A Ordinary Share, $ | $ | $ | ||||||
| Class B Ordinary Share, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Retained earnings | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| TOTAL SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-1
INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in U.S. Dollars, except for the number of shares)
| For the six months ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Operating income (loss) | ( | ) | ||||||
| Other income (expenses): | ||||||||
| Interest income | ||||||||
| Interest expenses | ( | ) | ( | ) | ||||
| Other income, net | ||||||||
| Other expense, net | ( | ) | ( | ) | ||||
| Exchange gain | ||||||||
| Total other income, net | ||||||||
| Income (Loss) before income tax | ( | ) | ||||||
| Income tax (expenses) benefits | ( | ) | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Comprehensive income (loss) | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Foreign currency translation adjustments, net of tax | ||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ||||
| Earnings (Loss) per share, basic and diluted | $ | $ | ( | ) | ||||
| Weighted average number of shares* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in U.S. Dollars, except for the number of shares)
| Class A Ordinary Shares (US$0.32 par value) |
Class B Ordinary Shares (US$0.32 par value) |
Additional Paid-in |
Statutory | Retained | Accumulated Other Comprehensive |
Total Shareholders’ |
||||||||||||||||||||||||||||||
| Shares* | Amount | Shares* | Amount | Capital | Reserve | earnings | Income (Loss) | Equity | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Balance, December 31, 2024 | — | $ | — | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Share issuance upon the initial public offering | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Offering cost incurred for initial public offering | — | — | — | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| Issuance of Class A ordinary shares in PIPE offering | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares under ATM offering | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Appropriated statutory surplus reserves | — | — | — | — | — | ( | ) | — | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars, except for the number of shares)
| For the six months ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Share-based compensation | — | |||||||
| Depreciation and amortization | ||||||||
| Allowance for (reversal of) credit losses | ( | ) | ||||||
| Amortization of finance lease right of use assets | ||||||||
| Deferred tax assets | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Prepayments and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ( | ) | ||||
| Interest expense on finance lease liabilities | ||||||||
| Contract liabilities | ( | ) | ||||||
| Accrued expenses and other payables | ||||||||
| Warranty liabilities | ||||||||
| Income taxes payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant, and equipment | ( | ) | ( | ) | ||||
| Purchases of short-term investments | ( | ) | — | |||||
| Loans to related parties | ( | ) | ( | ) | ||||
| Loan to a third party | — | ( | ) | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Issuance of ordinary shares, net of offering costs | — | |||||||
| Net proceeds from PIPE offering | — | |||||||
| Net proceeds from ATM offering | — | |||||||
| Principal payments on finance lease liabilities | ( | ) | ( | ) | ||||
| Proceeds from short-term loans | ||||||||
| Repayment of short-term loans | ( | ) | ( | ) | ||||
| Amount financed from related parties | — | |||||||
| Amount repaid to related parties | ( | ) | — | |||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
| Supplemental disclosures of cash flows information: | ||||||||
| Cash paid for income taxes | ||||||||
| Cash paid for interest expense | ||||||||
| Supplementary disclosure of non-cash information: | ||||||||
| Right of use assets obtained in exchange for finance lease liabilities | — | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
INLIF LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars, except for the number of shares)
Note 1. Organization and principal activities
INLIF Limited (the “Company”) is a holding company incorporated under the laws of the Cayman Islands on January 4, 2023. The Company owns
Juli HK owns
Fanqi Enterprise Limited (“Fanqi HK”), a company incorporated under the laws of Hong Kong, China, on December 30, 2022, owns
Prior to the reorganization of Ewatt, Ewatt was
On February 6, 2023, the three individual shareholders (Mr. Wenzao Huang, Mr. Xiaolong Chen, and Mr. Yunjun Huang) of Ewatt agreed to transfer
The five shareholders of Ewatt became the shareholders of the Company on September 6, 2023, and these shareholders then owned
Since the Company and its subsidiaries are effectively controlled by the same Controlling Shareholders, they are considered under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.
Upon completion of the reorganizations mentioned above, the Company established subsidiaries in countries and jurisdictions including the PRC, Hong Kong, the Cayman Islands, and the British Virgin Islands. Details of the Company and the subsidiaries of the Company are set out below:
| Name of Entity | Date of Incorporation | Place of Incorporation | % of Ownership | Principal Activities | ||||
| The Company | ||||||||
| Yunfei BVI | ||||||||
| Juli HK | ||||||||
| Fanqi HK | ||||||||
| Fujian INLIF | ||||||||
| Ewatt |
F-5
Note 2. Summary of significant accounting policies
Basis of presentation
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (the “U.S. GAAP”).
Principles of consolidation
The consolidated financial statements of the Company reflect the principal activities of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated upon consolidation.
A subsidiary is an entity in which (i) the Company directly or indirectly controls more than
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, allowances for expected credit losses, estimates for inventory provisions, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.
Foreign currency translation and transaction
The functional and reporting currency of the Company is the United States Dollar (“US$”). The Company’s operating subsidiary in China uses Renminbi (“RMB”) as the functional currency.
The financial statements of the Company and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in shareholders’ equity. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.
For the Company, except for the shareholders’ equity, the balance sheet accounts on June 30, 2026 and December 31, 2025 were translated at RMB
F-6
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks, and other monetary funds. The Company maintains cash and cash equivalents with various financial institutions primarily in China. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. As of June 30, 2026 and December 31, 2025, cash and cash equivalents balances were $
Short-term investments
Short-term investments primarily consist of investments in financial products with original maturities of more than three months but less than one year. Short-term investments are initially recorded at cost and subsequently measured based on the nature of the underlying financial instruments. Investment income is recognized when earned, and realized and unrealized gains or losses, where applicable, are recognized in the consolidated statements of operations and comprehensive income (loss). The Company periodically evaluates its short-term investments for impairment and records an impairment loss when appropriate. As of June 30, 2026 and December 31, 2025, impairment of short-term investments was nil.
Accounts receivable, net
Accounts receivables are recorded at the gross billing amount less allowance for expected credit losses from the customers. Accounts receivable does not bear interest.
Since January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.
The Company maintains an allowance for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”) and records the allowance for credit losses as an offset to accounts receivable and contract assets, and the estimated credit losses charged to the allowance in the consolidated statements of operations and comprehensive income (loss). The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business lines, services or product offerings and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances and contract assets balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customer.
For the period ended June 30, 2026 and year ended December 31, 2025, the Company’s expected credit losses against accounts receivable were $
Inventories
Inventories, primarily consisting of raw materials, finished goods, goods shipped in transit, and work in progress, is stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined by using weighted average cost method. Inventories are periodically evaluated for excess quantities and obsolescence. The carrying amounts of inventories identified as obsolete or in excess of forecasted usage are written down to their estimated net realizable value, based on factors including aging and anticipated future demand for each inventory category.
F-7
Prepayment and other current assets
Prepayment and other current assets primarily consist of prepayments made to vendors or service providers for future services that have not been provided, other current assets, and other receivables from third parties. Other current assets and other receivables are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. Management believes that, as of June 30, 2026 and December 31, 2025, the Company’s other current assets were not impaired.
Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:
| Category | Estimated useful lives | |
| Building | ||
| Office Equipment | ||
| Electronic equipment | ||
| Vehicles | ||
| Machinery Equipment | ||
| Building Improvement |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive income (loss). Expenditures for maintenance and repairs are charged to expenses as incurred, while additions, renewals, and betterments, which are expected to extend the useful life of assets, are capitalized.
Construction in progress
Construction in progress is comprised primarily of two new buildings designated for manufacturing purposes. These assets are not yet available for use and, accordingly, no depreciation is recorded. Upon completion and when the buildings are ready for their intended use, the related balances will be reclassified to buildings within property, plant and equipment, and depreciation will commence at that time.
Land use rights, net
Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use the parcels of land for specified periods of time. Land use rights are stated at cost less accumulated amortization. The estimated useful life for land use right is
Intangible assets, net
The Company’s intangible assets with definite useful lives primarily are purchased patents. The Company amortizes intangible assets with definite useful lives on a straight-line basis over estimated useful lives of
F-8
Impairment for long-lived assets
Long-lived assets, including property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate, and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset, plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2026 and December 31, 2025, impairment of long-lived assets was nil.
Finance Lease as a lessee
The Company, through its subsidiary, leases equipment and accounts for such leases in accordance with ASC 842, Leases (“ASC 842”). A lease is classified as a finance lease if it transfers ownership of the underlying asset to the Company at the end of the lease term or otherwise meets the criteria set forth in ASC 842. The Company’s equipment lease agreements are classified as finance leases because the Company is reasonably certain to exercise the purchase option at the end of the lease term.
Lease liabilities are recognized at the present value of fixed lease payments. Finance lease assets are initially measured at cost, which equals the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, and reduced by any lease incentives received. Because the Company is reasonably certain to exercise the purchase option and ownership of the underlying assets will transfer to the Company, finance lease assets are amortized on a straight-line basis over the estimated useful lives of the underlying assets. The lease liability is subsequently measured using the effective interest method, increased by interest expense and reduced by lease payments made. The principal portion of lease payments is classified as a financing cash outflow, and the interest portion is classified as an operating cash outflow in the statement of cash flows. Interest expense on the lease liability is recognized using the effective interest method and the amortization expense is reported as “General and administrative expenses”.
Finance lease assets are reviewed for impairment semi-annually. No impairment of finance lease assets was identified as of June 30, 2026.
Accounts payable
Accounts payable represent liabilities for goods or services provided to the Company prior to the end of the financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
Bank loans
Bank loans are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the bank loans using the effective interest method.
Warranty liabilities
The Company generally provides limited warranties for work performed under its contracts. At the time a sale is recognized, the Company records estimated future warranty costs under FASB ASC 460, “Guarantees”. Such estimated costs for warranties are estimated at completion and these warranties are not service warranties separately sold by the Company. Generally, the warranty provision is based on historical experience or, for new products with limited claims history, management’s estimate of future warranty costs.
Accrued expenses and other payables
Accrued expenses and other payables primarily consist of other payables and payroll-related payables incurred in the ordinary course of business.
F-9
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. |
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
The carrying amounts reported in the balance sheets of cash, accounts receivable, inventory and other current assets, due from related parties, value added tax (“VAT”) recoverables, short-term bank loans, accounts payable, amounts due to related parties, accrued expenses and other liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company did not have any non-financial assets or liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025.
Related party transactions
A related party is generally defined as (i) any person and or their immediate family hold
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature.
Share-based compensation
Unrestricted stock awards granted to employees are fully vested upon issuance, and compensation expense is recognized equal to the fair value of the award on the grant date. The fair value of unrestricted stock is determined based on the closing market price of the Company’s common stock on the grant date.
Revenue recognition
Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation. VAT that the Company collects concurrent with revenue-producing activities is excluded from revenue.
F-10
The Company follows the requirements of Topic 606-10-55-36 through -40, Revenue from Contracts with Customers, Principal Agent Considerations, in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a customer. Revenue recorded with the Company acting in the capacity of a principal is reported on a gross basis equal to the full amount of consideration to which we expect in exchange for the good or service transferred. Revenue recorded with the Company acting in the capacity of an agent is reported on a net basis, exclusive of any consideration provided to the principal party in the transaction.
The Company accounts for the revenue generated from sales of its products (injection molding machine-dedicated manipulator arms, accessories of manipulator arms, raw materials and scraps of manipulator arms) and services (installation and warranty services) on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods or services.
For the six months ended June 30, 2026 and 2025, there was no revenue recognized on a net basis where the Company is acting as an agent.
The Company’s revenue is primarily derived from the following sources:
Revenue from sales of injection molding machine-dedicated arms and installation and warranty services
The Company generates revenue from the sales of standard and customized manipulator arms (product) to customers. The Company enters into contracts with customers as principal. The contracts contain three performance obligations for domestic customers, including transferring the product to the customers, offering installation and warranty services in exchange for consideration. For oversea customers, there is one single performance obligation, which is transferring the product to their customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. Usually, the Company offers a credit term within 120 days for business customers with good creditworthiness. The Company recognizes revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been delivered to the customers and the customers have accepted it in accordance with the sales contract. In the normal course of business, the Company’s products are sold with no right of return unless the item is defective. The Company generally provides one-year warranty services against defects in materials and workmanship for its customers.
Revenue from sales of accessories of manipulator arms
The Company generates revenue from the sales of manipulator arm accessories. The customer base includes both direct purchasers from the Company, as well as those who procure the Company’s manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the control of the manipulator arm accessories has been transferred to customers. The transfer of control is considered complete when manipulator arm accessories have been received by customers. In the normal course of business, the Company’s manipulator arm accessories are sold with no right of return.
Revenue from sales of raw materials and scraps of manipulator arms
The Company generates revenue from the sales of raw materials and scraps of manipulator arms. The customer base includes both direct purchasers from the Company, as well as those who procure the Company’s manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is delivering raw materials and scraps of manipulator arms to the customers in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the control of the manipulator arm raw materials and scraps have been transferred to customers. The transfer of control is considered complete when manipulator arm raw materials and scraps have been received by customers. In the normal course of business, the Company’s manipulator arm raw materials and scraps are sold with no right of return.
F-11
Revenue from installation services
The Company generates revenue from providing the installation services to customers who procure the Company’s manipulator arms through third-party vendors. The contracts contain one single performance obligation, which is installing the manipulator arms specified by the customer in exchange for consideration. The terms of pricing and payment stipulated in the contract are fixed. The Company recognizes revenue at a point in time when the Company has fulfilled its obligation of installing manipulator arms and the customer has accepted them, with no further obligations remaining on either party.
Revenue from new energy sector-focused products
The Company generates revenue from the sale of new energy sector-focused products used in lithium battery manufacturing processes, including battery cell outer blue film dispensing systems, to customers. Acting as the principal in these contracts, the Company fulfills four performance obligations: delivery of equipment, installation and commissioning services, training for the customer’s staff, and warranty services. The Company is responsible for delivering the equipment to the customer’s designated location, where it will undergo inspection and acceptance testing. Additionally, the Company provides installation and commissioning services, including both domestic pre-acceptance and final overseas acceptance. Training is provided to ensure the customer’s staff can properly operate the equipment for smooth production. The Company also offers warranty services, covering maintenance and repair for a period of
Contract Assets and Liabilities
Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of June 30, 2026 and December 31, 2025, other than accounts receivables, advances from customers and contract liabilities, the Company had no other material contract assets, or deferred contract costs recorded on its consolidated balance sheet.
Revenue disaggregation
Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard. Revenue under the segment reporting standard is measured on the same basis as under the revenue standard.
| For the six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services | $ | $ | ||||||
| Revenue from sales of accessories of manipulator arms | ||||||||
| Revenue from sales of raw materials and scraps | ||||||||
| Revenue from installation services | ||||||||
| Revenue from new energy sector-focused products | — | |||||||
| Total revenue | $ | $ | ||||||
F-12
Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s CODM in order to allocate resources and assess performance of the segment.
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments.
Cost of revenue
Cost of revenue consists primarily of (i) cost of manipulator arms and installation service and warranty service, (ii) cost of accessories for manipulator arms, (iii) cost of raw materials and scraps for manipulator arms, (iv) cost of installation services, and (v) cost of new energy sector-focused products.
Selling expenses
Selling expenses include (i) sales service costs incurred from provision of customer services, (ii) traveling costs of sales and marketing staff, (iii) salaries and benefits of sales and marketing staff, (iv) advertising costs, and (v) others, such as conference costs.
Advertising costs, which consist primarily of offline advertising related costs, are expensed as incurred and amounted to $
Research and development expenses
The Company expenses all internal research and development costs as incurred, which primarily comprise costs of materials used for experiments, employee costs, and other daily expenses related to research and development activities.
Government grants
Government grants represent cash subsidies received from the local government in the PRC. Cash subsidies which have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized when received. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business.
Employee benefits
Full-time employees of the Operating Entity in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund, and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Company has made employee benefits contributions under PRC government requirements and has no legal obligation beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $
F-13
Deferred offering costs
The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A —“Expenses of Offering.” Deferred offering costs consist of underwriting, legal, and other expenses directly attributable to the IPO and incurred through its completion. These costs were charged to shareholders’ equity upon the completion of the IPO on January 3, 2025. As of June 30, 2026 and December 31, 2025, nil and $
Statutory reserves
Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund.” Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of
As of June 30, 2026 and December 31, 2025, the balance of the required statutory reserves was $
VAT
Revenue represents the invoiced value of goods and services, net of VAT. The VAT is based on gross sales price and VAT rates range up to
Income taxes
The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company believes there were no uncertain tax positions on June 30, 2026 and December 31, 2025.
The Company’s affiliated entities in the PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances. As of June 30, 2026, the tax years for the Company’s affiliated entities in the PRC remain open for statutory examination by PRC tax authorities. There were no ongoing examinations by tax authorities as of June 30, 2026 and December 31, 2025.
F-14
Comprehensive income (loss)
Comprehensive income (loss) is defined as the increase in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Amongst other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive income (loss) included net income and foreign currency translation adjustments that are presented in the consolidated statements of comprehensive income (loss).
Earnings (loss) per share
The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. As of June 30, 2026 and December 31, 2025, there was no dilution impact.
Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders, including the redeemable shares, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of June 30, 2026 and December 31, 2025, there were no dilutive shares.
Risks and uncertainties
Concentration of credit risks
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and accounts receivable. As of June 30, 2026 and December 31, 2025, the aggregate amounts of cash of $
Accounts receivables are typically unsecured and derived from revenue earned from customers in the PRC, which are exposed to credit risk. The risk is mitigated by credit evaluations. The Company maintains an allowance for doubtful accounts, and actual losses have generally been within management’s expectations. Refer to “Note 19. Customer and Supplier Concentrations” for detail.
Currency convertibility risk
Substantially all of the Company’s operating activities are settled in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with supporting documents.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
F-15
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued and has evaluated all other pronouncements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The amendments in this ASU are intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to financial statements, all relevant expense captions presented on the face of the income statement in continuing operations into the purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact the adoption of ASU 2024-03 will have on its consolidated financial statements and related disclosures.
In April 2025, the FASB issued ASU 2025-04 – Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy election for awards granted to customers (unless granted in exchange for a distinct good or service), and clarifies applicability of the variable consideration constraint. The ASU will be effective for annual reporting periods (including interim periods within annual reporting periods) beginning after December 15, 2026, for all entities. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this Update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update improves U.S. GAAP by establishing authoritative guidance on the accounting for government grants received by business entities. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. The Company is currently in the process of evaluating the impact this amended guidance may have on its consolidated financial statements.
Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material effect on the Company’s financial position, result of operations, or cash flows.
F-16
Note 3. Cash and cash equivalents
Cash and cash equivalents consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Cash on hand | $ | $ | ||||||
| Deposits with banks | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
The Company had a total of $
Note 4. Short-term investments
Short-term investments consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Short-term investments | $ | $ | — | |||||
| Total | $ | $ | — | |||||
During the six months ended June 30, 2026, the Company entered into an investment management agreement with a third party for a principal amount of US$
Note 5. Accounts receivable, net
Accounts receivable, net, consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Accounts receivable-third parties | $ | $ | ||||||
| Accounts receivable-related parties | ||||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
For the six months ended June 30, 2026 and year ended December 31, 2025, the Company recorded allowance for credit losses of third parties for $
Subsequent to June 30, 2026, the Company collected $
Changes of allowance for credit losses are as follows:
| For the six months ended June 30, 2026 | For the fiscal year ended December 31, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Additional reserve through credit loss expense | ||||||||
| Ending balance | $ | $ | ||||||
F-17
Note 6. Inventories
Inventories consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Goods shipped in transit | ||||||||
| Work in progress | ||||||||
| Total inventories | $ | $ | ||||||
No inventory write-down to net realizable value was recognized for the six months ended June 30, 2026 and year ended December 31, 2025, respectively.
Note 7. Prepayments and other current assets
Prepayments and other current assets consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Value-added tax recoverable | $ | $ | ||||||
| Other receivables | ||||||||
| Others | ||||||||
| Prepayments and other current assets | $ | $ | ||||||
No impairment of other current assets and other receivables was required for the six months ended June 30, 2026 and year ended December 31, 2025.
Note 8. Property, plant and equipment, net
Property, plant and equipment, net consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Building | $ | |||||||
| Office Equipment | ||||||||
| Electronic Equipment | ||||||||
| Vehicles | ||||||||
| Machinery Equipment | ||||||||
| Building Improvement | ||||||||
| Construction in progress | ||||||||
| Subtotal | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
As of June 30, 2026 and December 31, 2025, the buildings have been pledged for the purpose of obtaining bank loans.
F-18
Depreciation expenses for the six months ended June 30, 2026 and 2025 amounted to $
For the six months ended June 30, 2026, the depreciation expenses included in the cost of sales, general and administrative expenses, selling expenses, and research and development expenses were approximately $
For the six months ended June 30, 2025, the depreciation expenses included in the cost of sales, general and administrative expenses, selling expenses, and research and development expenses were approximately $
Note 9. Land-use rights, net
Land-use rights, net, consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Land-use rights | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Land-use rights, net | $ | $ | ||||||
As of June 30, 2026 and December 31, 2025, the land-use rights have been pledged for the purpose of obtaining bank loans.
Amortization expenses were $
For the six months ended June 30, 2026, the amortization expenses included in the cost of sales and general and administrative expenses were approximately $
For the six months ended June 30, 2025, the amortization expenses included in the cost of sales and general and administrative expenses were approximately $
Estimated future amortization expenses are as follows:
| Amortization expenses | ||||
| Fiscal year 2026 | $ | |||
| Fiscal year 2027 | ||||
| Fiscal year 2028 | ||||
| Fiscal year 2029 | ||||
| Fiscal year 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 10. Intangible assets, net
Intangible assets, net, consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Patents | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization expenses included in general and administrative expenses were $
F-19
Estimated future amortization expenses are as follows:
| Amortization expenses | ||||
| Fiscal year 2026 | $ | |||
| Fiscal year 2027 | ||||
| Fiscal year 2028 | ||||
| Fiscal year 2029 | ||||
| Fiscal year 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 11. Accounts payable
Accounts payable consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Accounts payable to third party suppliers | $ | $ | ||||||
| Total accounts payable | $ | $ | ||||||
Note 12. Short-term bank loans
Short-term bank loans consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Fujian Rural Commercial Bank | $ | $ | ||||||
| Industrial and Commercial Bank of China | ||||||||
| China Merchants Bank | — | |||||||
| Total short-term bank loans | $ | $ | ||||||
As of June 30, 2026, bank loans of $
F-20
Short-term loans as of June 30, 2026 consisted of following:
| As of June 30, 2026 short-term bank loans | Loan commencement date | Loan maturity date | Loan amount in RMB | Loan amount in USD | Effective interest rate | |||||||||||
| Industrial and Commercial Bank of China | $ | % | ||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Fujian Rural Commercial Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| China Merchants Bank | % | |||||||||||||||
| Total short-term bank loans as of June 30, 2026 | $ | |||||||||||||||
Short-term loans as of December 31, 2025 consisted of following:
| For the year ended December 31, 2025 short-term bank loans | Loan commencement date | Loan maturity date | Loan amount in RMB | Loan amount in USD | Effective interest rate | |||||||||||
| Industrial and Commercial Bank of China | $ | % | ||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Industrial and Commercial Bank of China | % | |||||||||||||||
| Fujian Rural Commercial Bank | % | |||||||||||||||
| Total short-term bank loans as of December 31, 2025 | $ | |||||||||||||||
Note 13. Contract liabilities
Contract liabilities consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Advance from customers | $ | $ | ||||||
| Total contract liabilities | $ | $ | ||||||
F-21
| For the six months ended June 30, 2026 | For the year ended December 31, 2025 | |||||||
| Balance at the beginning of the period | $ | $ | ||||||
| Cash received in advance | ||||||||
| Revenue recognized from opening balance of deferred revenue | ( | ) | ( | ) | ||||
| Revenue recognized from contract liabilities arising during the period | — | ( | ) | |||||
| Balance at the end of the period | $ | $ | ||||||
Note 14. Accrued expenses and other payables
Accrued expenses consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Accrued payroll and related expenses | $ | $ | ||||||
| Other payables | ||||||||
| Total accrued expenses and other payables | $ | $ | ||||||
Other payables mainly consist of VAT payable and other taxes payable.
Note 15. Warranty liabilities
Warranty liabilities consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Warranty liabilities | $ | $ | ||||||
| Total warranty liabilities | $ | $ | ||||||
| For the six months ended June 30, 2026 | For the year ended December 31, 2025 | |||||||
| Balance at the beginning of the period | ||||||||
| Increase in liability | ||||||||
| Reduction in liability (warranty claims) | ( | ) | ( | ) | ||||
| Balance at the end of the period | $ | $ | ||||||
F-22
Note 16. Finance leases as lessee
In May 2025, the Company entered into a machinery equipment lease agreement. The total lease term is
The weighted average discount rate of the Company’s finance leases was
Amounts recognized in the consolidated balance sheet:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Finance lease assets | $ | $ | ||||||
| Lease liabilities, current | ||||||||
| Lease liabilities, non-current | — | |||||||
| Total lease liabilities | $ | $ | ||||||
A summary of lease cost is as follows:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Amortization of finance lease assets | $ | $ | ||||||
| Interest of lease liabilities | ||||||||
The following table presents maturity of lease liabilities as of June 30, 2026:
| Minimum lease payment | ||||
| Six months ended December 31, 2026 | $ | |||
| Fiscal year 2027 | ||||
| Less: imputed interest | ( | ) | ||
| Present value of finance lease liabilities | $ | |||
The following summarizes other supplemental information about the Company’s lease as of June 30, 2026 and December 31, 2025:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Weighted average discount rate | % | % | ||||||
| Weighted average remaining lease term | ||||||||
F-23
Note 17. Income taxes
The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled.
Cayman Islands and BVI
The Company is incorporated in the Cayman Islands and Yunfei BVI is incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands and the BVI.
Hong Kong
In accordance with the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), a company incorporated or registered in Hong Kong is subject to profit tax in respect of its assessable profits arising in or derived from Hong Kong. For the year of assessment 2018/2019 onwards, the Hong Kong profit tax rates are
PRC
Generally, under the Enterprise Income Tax (“EIT”) Law of PRC, PRC enterprises are subject to a uniform
In addition, the EIT law grants preferential tax treatment to a High and New Technology Enterprise (“HNTE”), if the enterprise meets the requirements by local government and maintains the HNTE status by re-applying every three years. Under this preferential tax treatment, HNTEs are entitled to an income tax rate of
For the six months ended June 30, 2026 and 2025, Ewatt was eligible for a reduced income tax rate of
The provision for income tax consisted of the following:
| For the six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| Current income tax expenses | $ | $ | — | |||||
| Deferred income tax expenses (benefits) | ( | ) | ( | ) | ||||
| Total income tax expenses (benefits) | $ | $ | ( | ) | ||||
The following table sets forth reconciliation between the statutory earned income tax rate and the effective income tax:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Income (loss) before income tax expenses | $ | $ | ( | ) | ||||
| Income tax computed at statutory EIT rate ( | — | |||||||
| Tax effect of preferential tax treatments | ( | ) | — | |||||
| Effect of research and development credits | ( | ) | — | |||||
| Effect of other non-deductible expenses | ( | ) | — | |||||
| Effect of change in valuation allowance | ||||||||
| Current income tax expenses | $ | $ | — | |||||
| Tax effect of deferred tax recognized | ( | ) | ( | ) | ||||
| Total income tax expenses (benefits) | $ | $ | ( | ) | ||||
F-24
The significant components of deferred tax assets were as following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Deferred tax assets | $ | $ | ||||||
| Total deferred tax assets | $ | $ | ||||||
The Company’s taxes payable consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| Income tax payable | $ | $ | — | |||||
| Other tax payables | ||||||||
| Total tax payable | $ | $ | ||||||
Other tax payables mainly consist of VAT payable, city construction tax payable, property tax and land use tax payable, stamp tax payable, and education fund payable.
Uncertain tax positions
The PRC tax authorities conduct periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. In general, the PRC tax authorities have up to five years to conduct examinations of the tax filings of the Company’s PRC entities. It is therefore uncertain as to whether the PRC tax authorities may take different views about the Company’s tax filings, which may lead to additional tax liabilities.
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions As of June 30, 2026 and December 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.
Note 18. Equity
Authorized Share Capital
On June 9, 2025, the Company passed the shareholder resolutions and board resolutions to re-designate and re-classify its authorized share capital into (i)
Except for voting rights and conversion rights, Class A Ordinary Shares and Class B Ordinary Shares shall rank pari passu and shall have the same rights, preferences, privileges and restrictions.
On January 9, 2026, the Company passed shareholder resolutions to increase its authorized share capital from US$
At the same extraordinary general meeting, the shareholders also authorized the Board of Directors to effect one or more share consolidations during the three-year period commencing January 9, 2026, provided that the cumulative consolidation ratio would not be less than 2-for-1 nor greater than 5,000-for-1.
On March 20, 2026, the Board of Directors approved a one-for-sixteen (
F-25
On June 30, 2026, the Board of Directors approved a further one-for-two hundred (
The first and second share consolidations did not change the total authorized share capital of the Company, but proportionately reduced the number of authorized shares and increased the par value per share.
Issued Share Capital
On January 3, 2025, the Company consummated its initial public offering on the Nasdaq Capital Market of
In May 2025, the Company issued
Effective July 31, 2025, the Company re-designated and reclassified its
In August 2025, the Company issued
On February 4, 2026, the Board of Directors approved a private investment in public equity transaction pursuant to Regulation S, pursuant to which the Company agreed to issue
Following the one-for-sixteen (
During June 2026, the Company sold an aggregate of
Following the subsequent one-for-two hundred (
On July 20, 2026, the Company entered into a securities purchase agreement with Kerui Enterprise Limited, a then existing holder of the Company’s Class B ordinary shares, relating to the issuance and sale of an aggregate of
As of the date of issuance of the unaudited consolidated financial statements, the Company had
F-26
Statutory reserve
The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with the PRC GAAP.
Appropriations to the statutory surplus reserve are required to be at least
Note 19. Dividend Distributions
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with the U.S. GAAP differ from those reflected in the statutory financial statements of the PRC entities.
The PRC entities are required to set aside at least
The statutory reserve funds and the discretionary surplus funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.
As a result of the foregoing restrictions, the PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulations in the PRC may further restrict the PRC entities from transferring funds to the Company in the form of dividends, loans, and advances. As of June 30, 2026 and December 31, 2025, amounts restricted were the paid-in-capital, additional paid-in-capital and statutory reserve of the PRC entities, which amounted to $
Note 20. Customer and Supplier Concentrations
Significant customers and suppliers are those that account for greater than 10% of the Company’s revenue and purchases, respectively.
The Company sold a substantial portion of products to two customers (
The Company sold a substantial portion of products to one customer (
The loss of any significant customers or the failure to attract new customers could have a material adverse effect on the Operating Entity’s business, and the Company’s consolidated results of operations and financial condition.
For the six months ended June 30, 2026, one supplier contributed approximately
For the six months ended June 30, 2025, two suppliers contributed approximately
The loss of any significant suppliers or the failure to purchase key raw materials could have a material adverse effect on the Operating Entity’s business, and the Company’s consolidated results of operations and financial condition.
F-27
Note 21. Related party transactions
| 1) |
| Name | Relationship with the Company | |
| Wenzao Huang | ||
| Yunjun Huang | ||
| Rongjun Xu | ||
| Lihui Xu | ||
| Lianken Enterprise Limited (“Lianken”) | ||
| Tianhua Enterprise Limited (“Tianhua”) | ||
| Xingcan Enterprise Limited (“Xingcan”) | ||
| Weibo Enterprise Limited (“Weibo”) | ||
| Quanzhou Huasen Hardware and Plastic Products Co., Ltd (“Quanzhou Huasen”) |
| 2) |
| Accounts | Name of related parties | As of June 30, 2026 | As of December 31, 2025 | |||||||
| Due to related parties | Wenzao Huang | $ | $ | |||||||
| Lihui Xu | — | |||||||||
| Due to related parties | $ | $ | ||||||||
| Accounts | Name of related parties | As of June 30, 2026 | As of December 31, 2025 | |||||||
| Due from related parties | Xiaolong Chen | |||||||||
| Yunjun Huang | ||||||||||
| Lihui Xu | — | |||||||||
| Lianken | ||||||||||
| Tianhua | ||||||||||
| Xingcan | ||||||||||
| Due from related parties | $ | $ | ||||||||
3) Related party transactions
For the six months ended June 30, 2026, the related parties provided working capital to support the Operating Entity’s operations when needed. The borrowings were unsecured, repayable on demand, and interest-free. The following table summarizes the Operating Entity’s borrowing transactions with the related parties:
| Name of related parties | Lend to Operating Entity | Collect from Operating Entity | ||||||
| Wenzao Huang | $ | $ | — | |||||
| Lihui Xu | — | |||||||
| Total | $ | $ | ||||||
F-28
For the six months ended June 30, 2026, the Operating Entity provided loans to related parties. The borrowings were unsecured, repayable on demand, and interest-free. The following table summarizes the Operating Entity’s borrowing transactions with the related parties:
| Name of related parties | Lend from Operating Entity | Repaid to Operating Entity | ||||||
| Xiaolong Chen | $ | $ | — | |||||
| Yunjun Huang | — | |||||||
| Lihui Xu | — | |||||||
| Total | $ | $ | — | |||||
For the six months ended June 30, 2025, the Operating Entity provided loans to related parties. The borrowings were unsecured, due on demand, and interest-free. The following table summarizes the Operating Entity’s borrowing transactions with the related parties:
| Name of related parties | Lend from Operating Entity | Repaid to Operating Entity | ||||||
| Lianken | $ | $ | — | |||||
| Tianhua | — | |||||||
| Xingcan | — | |||||||
| — | ||||||||
| Total | $ | $ | — | |||||
| Transaction Types | Name of related parties | For the six months ended June 30, 2026 | For the six months ended June 30, 2025 | |||||||
| Sales | Quanzhou Huasen | $ | $ | |||||||
| Total | $ | $ | ||||||||
For the six months ended June 30, 2026 and 2025, the Company generated revenue from related parties in the amount of $
The following table summarizes the Operating Entity’s accounts receivable balance with the related parties:
| Accounts | Name of related parties | As of June 30, 2026 | As of December 31, 2025 | |||||||
| Accounts receivable | Quanzhou Huasen | $ | $ | |||||||
| Total | $ | $ | ||||||||
As of June 30, 2026 and December 31, 2025, the Company’s accounts receivable balance from related parties amounted to $
F-29
Note 22. Commitments and Contingencies
The Company may be involved in certain legal proceedings, claims, and other disputes arising from the commercial operations, projects, employees, and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations, or liquidity.
As of June 30, 2026, the Company had a capital commitment of approximately $
Note 23. Subsequent events
The Company has evaluated subsequent events through the date the financial statements were issued and filed with the SEC. Based on the Company’s evaluation, no other event has occurred requiring adjustment or disclosure in the notes to the consolidated financial statements, except the following:
On July 6, 2026, the Company effectuated a 1-for-200 consolidation of all of its authorized and issued Class A ordinary shares and Class B ordinary shares.
On July 20, 2026, the Company entered into a securities purchase agreement with Kerui Enterprise Limited for the private placement of
On September 8, 2026, the Company held an extraordinary meeting of its shareholders (the “Meeting”). The Meeting was adjourned to September 15, 2026 due to lack of quorum in accordance with its then effective sixth (6th) amended and restated memorandum and articles of association. At the adjourned Meeting, the shareholders present in person and represented by proxy constituted quorum, and the shareholders approved and adopted the following resolutions:
| Proposal | No. 1. | to increase, by ordinary resolution, the authorized share capital of the Company from: US$ |
| Proposal | No. 2. | to adopt, by special resolution and subject to and immediately following the Share Capital Increase being effected, by the Company the seventh (7th) amended and restated memorandum and articles of association substantially in the form attached as Exhibit A to the Meeting Notice, to (i) reflect the Share Capital Increase, (ii) amend Article 11.1(b), and (iii) incorporate certain housekeeping changes; |
| Proposal | No. 3. | to reduce, by special resolution, subject to and immediately following the Share Capital Increase being effected and further subject to compliance with all further applicable requirements under sections 14, 14A and 14B of the Companies Act (Revised) of the Cayman Islands, the par value of each authorized Ordinary Share of the Company from US$ |
F-30
| Proposal | No. 4. | to adopt, by special resolution and subject to and immediately following the Share Capital Reorganization being effected, by the Company an amended and restated memorandum and articles of association in substitution for, and to the entire exclusion of, the Company’s then existing memorandum and articles of association, to reflect the Share Capital Reorganization; |
| Proposal | No. 5. | to adopt, by special resolution and subject to all necessary governmental and regulatory consents: (a) the deregistration of the Company as an exempted company under the laws of the Cayman Islands and the continuation of the Company into the British Virgin Islands as a BVI business company under the laws of the BVI (“Migration”), and the authorization to any director of the Company (a “Director”) to sign (i) the voluntary declaration for and on behalf of the Company (which shall also be sworn by a Director) including a statement of the Company’s assets and liabilities as required by the Companies Act (Revised) of the Cayman Islands; (ii) as the Company has no secured creditors, an undertaking that the Company has no secured creditors; (iii) a notice of the Company’s proposed registered office address in the British Virgin Islands, each in connection with the Company’s application to the Registrar of Companies of the Cayman Islands for the Migration; (b) the adoption, conditional upon and with immediate effect from the Migration, of a memorandum and articles of association compliant with the laws of the BVI (“BVI MAA”), substantially in the form attached as Exhibit B to Meeting Notice, in substitution and replacement in their entirety of the Company’s then existing amended and restated memorandum and articles of association; and (c) the authorization of the Board of Directors and any Director or officer of the Company to take all actions, execute all documents and make all filings as they may deem necessary or desirable to effect the Migration, including without limitation, finalizing and making any changes to the BVI MAA as may be necessary to effect the Migration. |
| Proposal | No. 6. | to ratify, by ordinary resolution, the appointment of Enrome LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2026; and |
| Proposal | No. 7. | to adjourn the Meeting, by ordinary resolution, to a later date or dates or sine die, if necessary. |
The sales agreement dated March 12, 2026 (the “Sales Agreement”) by and between the Company AC Sunshine Securities LLC (the “Salves Agent”) has been terminated, effective as of September 19, 2026. During the term of the Sales Agreement, the Company sold an aggregate of
F-31
Exhibit 99.2
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our unaudited condensed consolidated financial statements and their related notes included in this Form 6-K. This report contains forward-looking statements. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.
A. Operating Results
The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 6-K. The operating results in any year are not necessarily indicative of the results that may be expected for any future periods.
Six months ended June 30, 2026 compared to six months ended June 30, 2025
| For the six months ended June 30, | Changes | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| Net revenue | $ | 12,942,657 | $ | 10,270,988 | $ | 2,671,669 | 26.01 | % | ||||||||
| Cost of revenue | (8,290,252 | ) | (8,473,079 | ) | 182,827 | (2.16 | )% | |||||||||
| Gross profit | 4,652,405 | 1,797,909 | 2,854,496 | 158.77 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | (618,931 | ) | (412,056 | ) | (206,875 | ) | 50.21 | % | ||||||||
| General and administrative expenses | (1,759,047 | ) | (2,682,433 | ) | 923,386 | (34.42 | )% | |||||||||
| Research and development expenses | (1,149,759 | ) | (770,713 | ) | (379,046 | ) | 49.18 | % | ||||||||
| Total operating expenses | (3,527,737 | ) | (3,865,202 | ) | 337,465 | (8.73 | )% | |||||||||
| Income (Loss) from operations | 1,124,668 | (2,067,293 | ) | 3,191,961 | (154.40 | )% | ||||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | 12,389 | 135,574 | (123,185 | ) | (90.86 | )% | ||||||||||
| Interest expenses | (63,367 | ) | (94,780 | ) | 31,413 | (33.14 | )% | |||||||||
| Exchange gain | 19,358 | 33,838 | (14,480 | ) | (42.79 | )% | ||||||||||
| Bank service fees | (3,963 | ) | (3,356 | ) | (607 | ) | 18.09 | % | ||||||||
| Non-operating income | 45,030 | 19,810 | 25,220 | 127.31 | % | |||||||||||
| Non-operating expenses | (9 | ) | (916 | ) | 907 | (99.02 | )% | |||||||||
| Total other income, net | 9,438 | 90,170 | (80,732 | ) | (89.53 | )% | ||||||||||
| Income (Loss) before income tax | 1,134,106 | (1,977,123 | ) | 3,111,229 | (157.36 | )% | ||||||||||
| Income tax benefits (expense) | (125,096 | ) | 1,703 | (126,799 | ) | (7,445.63 | )% | |||||||||
| Net (loss) income | $ | 1,009,010 | $ | (1,975,420 | ) | $ | 2,984,430 | (151.08 | )% | |||||||
Net Revenue
Our revenue is reported net of all value added taxes (“VAT”). We derive revenue primarily from the sales of manipulator arms, including installation services and warranty services for the manipulator arms sold, and the sales of accessories and raw materials for manipulator arms.
The following table sets forth the breakdown of our revenue by category for the periods indicated.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Changes | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||
| Manipulator arms and installation and warranty services | $ | 4,974,047 | 38.43 | % | $ | 4,373,031 | 42.58 | % | $ | 601,016 | 13.74 | % | ||||||||||||
| Accessories | 398,360 | 3.08 | % | 386,603 | 3.76 | % | 11,757 | 3.04 | % | |||||||||||||||
| Raw materials and scraps | 4,203,078 | 32.47 | % | 5,469,831 | 53.26 | % | (1,266,753 | ) | (23.16 | )% | ||||||||||||||
| Installation services | 6,528 | 0.05 | % | 41,523 | 0.40 | % | (34,995 | ) | (84.28 | )% | ||||||||||||||
| Intelligent equipment | 3,360,644 | 25.97 | % | — | — | 3,360,644 | 100.00 | % | ||||||||||||||||
| Total revenue | $ | 12,942,657 | 100.00 | % | $ | 10,270,988 | 100.00 | % | $ | 2,671,669 | 26.01 | % | ||||||||||||
Compared with net revenue for the six months ended June 30, 2025, our net revenue increased by approximately $2.67 million, or 26.01%, for the six months ended June 30, 2026, which was primarily attributable to (i) an increase in sales of manipulator arms, including installation and warranty services, by approximately $0.60 million, mainly due to higher purchase volumes from certain existing customers and contributions from newly acquired customers; (ii) an increase in sales of accessories by approximately $0.01 million, which remained relatively stable compared with the prior-year period; and (iii) sales of intelligent equipment of approximately $3.36 million, primarily used in the new energy sector, driven by customers’ needs for new production lines, capacity expansion and automation upgrades. These increases were partially offset by (iv) a decrease in sales of raw materials and scraps of approximately $1.27 million, primarily due to our adoption of a more demand-driven procurement approach, lower customer demand for certain raw materials, and enhanced production and inventory controls that reduced the volume of scraps generated; and (v) a decrease in installation service revenue of approximately $0.03 million, primarily due to lower installation volumes, shorter installation time for certain products, and an increasing number of customers performing installation using their own personnel or requiring only limited technical assistance from us.
Cost of Revenue
Our cost of revenue consists primarily of (i) costs of raw materials, such as servo motors and servo systems, linear guides, steel plates, and planetary reducers, (ii) sales tax and additions, and (iii) labor costs, production overhead, and other costs related to the business operation.
The following table sets forth the breakdown of our cost of revenue by category for the periods indicated.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Changes | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||||||
| Manipulator arms and installation and warranty services | $ | 3,350,683 | 40.42 | % | $ | 3,213,912 | 37.92 | % | $ | 136,771 | 4.26 | % | ||||||||||||
| Accessories | 542,753 | 6.55 | % | 320,728 | 3.79 | % | 222,025 | 69.23 | % | |||||||||||||||
| Raw materials | 1,672,465 | 20.17 | % | 4,926,993 | 58.15 | % | (3,254,528 | ) | (66.06 | )% | ||||||||||||||
| Installation services | 3,293 | 0.04 | % | 11,446 | 0.14 | % | (8,153 | ) | (71.23 | )% | ||||||||||||||
| Intelligent equipment | 2,721,058 | 32.82 | % | — | — | 2,721,058 | 100.00 | % | ||||||||||||||||
| Total cost of revenue | $ | 8,290,252 | 100.00 | % | $ | 8,473,079 | 100.00 | % | $ | (182,827 | ) | (2.16 | )% | |||||||||||
Our cost of revenue decreased by approximately $0.18 million, or 2.16%, from approximately $8.47 million for the six months ended June 30, 2025 to approximately $8.29 million for the six months ended June 30, 2026, despite a 26.01% increase in our total revenue. The decrease in cost of revenue was primarily attributable to a significant reduction in the cost of raw materials sold, partially offset by costs associated with our newly developed intelligent equipment business and higher costs of accessories.
2
The cost of revenue for manipulator arms, including installation and warranty services, increased by approximately $0.14 million, or 4.26%, which was lower than the corresponding increase in revenue. This was mainly due to a more favorable product mix, as well as improvements in production processes and material utilization, which reduced material consumption and waste. The cost of accessories increased by approximately $0.22 million, or 69.23%, mainly due to higher labor, auxiliary material and energy costs, while selling prices remained relatively stable due to market competition and limited pricing flexibility. The cost of raw materials decreased by approximately $3.25 million, or 66.06%, primarily due to lower unit costs of certain raw materials sold during the period relative to their selling prices. Certain raw materials sold during the period had been purchased in prior periods when procurement prices were lower, while their selling prices reflected higher prevailing market prices. Changes in the sales mix also contributed to a lower overall cost-to-revenue ratio for raw materials. The cost of installation services decreased by approximately $0.01 million, or 71.23%, primarily due to lower installation volume and improved installation efficiency, which reduced installation time and related labor costs. These decreases were partially offset by approximately $2.72 million of cost of revenue associated with intelligent equipment, which generated revenue during the six months ended June 30, 2026.
As a result, the increase in our revenue during the period did not result in a corresponding increase in cost of revenue, primarily due to changes in revenue mix, lower cost-to-revenue ratios for certain categories, and improved production and material efficiency.
Gross profit and gross profit margin
Gross profit represents our revenue less cost of sales. Our gross profit margin represents our gross profit as a percentage of our revenue. For the six months ended June 30, 2026 and 2025, our gross profit was approximately $4.65 million and $1.80 million, respectively, and our gross profit margin was 35.95% and 17.50%, respectively.
The following table sets forth our gross profit and gross profit margin for the periods indicated.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Changes | ||||||||||||||||||||||
| Gross profit | Gross profit margin | Gross profit | Gross profit margin | Gross profit | ||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||
| Manipulator arms and installation and warranty services | $ | 1,623,364 | 32.64 | % | $ | 1,159,119 | 26.51 | % | $ | 464,245 | 40.05 | % | ||||||||||||
| Accessories | (144,393 | ) | (36.25 | )% | 65,875 | 17.04 | % | (210,268 | ) | (319.19 | )% | |||||||||||||
| Raw materials and scraps | 2,530,613 | 60.21 | % | 542,838 | 9.92 | % | 1,987,775 | 366.18 | % | |||||||||||||||
| Installation services | 3,235 | 49.56 | % | 30,077 | 72.43 | % | (26,842 | ) | (89.24 | )% | ||||||||||||||
| Intelligent equipment | 639,586 | 19.03 | % | — | — | 639,586 | 100.00 | % | ||||||||||||||||
| Total gross profit | $ | 4,652,405 | 35.95 | % | $ | 1,797,909 | 17.50 | % | $ | 2,854,496 | 158.77 | % | ||||||||||||
Compared with the gross profit for the six months ended June 30, 2025, our gross profit increased by approximately $2.85 million, or 158.77%, for the six months ended June 30, 2026, and the gross profit margin increased from 17.50% to 35.95%, mainly due to (i) an increase in gross profit from sales of manipulator arms, including installation and warranty services, by approximately $0.46 million; (ii) an increase in gross profit from sales of raw materials and scraps by approximately $1.99 million; (iii) an increase in gross profit from sales of intelligent equipment by approximately $0.64 million; and (iv) offset by a decrease in gross profit from sales of accessories and installation services by approximately $0.21 million and $0.03 million, respectively.
3
Operating expenses
The following table sets forth the breakdown of our operating expenses for the six months ended June 30, 2026 and 2025.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Changes | ||||||||||||||||||||||
| Amount | % of revenue | Amount | % of revenue | Amount | % | |||||||||||||||||||
| Selling expenses | 618,931 | 4.78 | % | 412,056 | 4.01 | % | 206,875 | 50.21 | % | |||||||||||||||
| General and administrative expenses | 1,759,047 | 13.59 | % | 2,682,433 | 26.12 | % | (923,386 | ) | (34.42 | )% | ||||||||||||||
| Research and development expenses | 1,149,759 | 8.88 | % | 770,713 | 7.50 | % | 379,046 | 49.18 | % | |||||||||||||||
| Total operating expenses | $ | 3,527,737 | 27.25 | % | $ | 3,865,202 | 37.63 | % | $ | (337,465 | ) | (8.73 | )% | |||||||||||
Selling expenses
Selling expenses mainly consist of (i) salaries and benefits of sales and marketing staff, (ii) traveling costs of sales and marketing staff, (iii) sales commissions, (iv) advertising costs, and (v) other expenses, such as certification fees.
Our selling expenses increased by 50.21% from approximately $0.41 million for the six months ended June 30, 2025, to $0.62 million for the six months ended June 30, 2026. The increase was mainly due to (i) an increase of approximately $0.10 million in salaries and benefits, primarily due to higher performance-based compensation for sales personnel as our revenue increased; (ii) an increase of approximately $0.02 million in business entertainment expenses, mainly due to increased customer visits and related business development activities; (iii) an increase of approximately $0.03 million in traveling expenses, primarily due to more frequent business trips by our sales personnel to support the expansion of our sales activities; and (iv) an increase of approximately $0.06 million in transportation expenses, mainly due to higher customer-related transportation costs associated with the increase in sales.
General and administrative expenses
General and administrative expenses mainly consist of (i) salaries and benefits for the Operating Entity’s administrative personnel, (ii) professional fees, which primarily consist of legal, accounting, consulting and other public company compliance-related fees, (iii) utilities expenses, which consist of water and electricity charges for administrative purposes, (iv) business and office operation fees, and (v) other expenses, which primarily include expenses of freight, traveling, conferences, and other miscellaneous expenses for administrative purposes.
Our general and administrative expenses decreased by 34.42% from approximately $2.68 million for the six months ended June 30, 2025, to $1.76 million for the six months ended June 30, 2026. The decrease was mainly due to a decrease of approximately $1.63 million in share-based compensation expenses, primarily because equity incentives were granted to three key administrative employees during the first half of 2025, while no comparable grants were made during the first half of 2026.
Research and development expenses
Research and development expenses mainly comprise the costs of materials used for experiments, employee costs, and other daily expenses related to research and development activities.
Our research and development expenses increased by 49.18% from approximately $0.77 million for the six months ended June 30, 2025, to approximately $1.15 million for the six months ended June 30, 2026. The increase was primarily attributable to the expansion of our research and development team, with headcount increasing from 31 in June 2025 to 72 in June 2026, resulting in higher personnel costs. We also continued to invest in the development of industrial robots, which remained in the research, development and product validation stage during the period.
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Other income (expenses)
Other income (expenses) primarily consists of (i) government subsidies provided as incentives from the PRC local government to encourage the expansion of local business; (ii) interest income on bank deposits and interest expenses of short-term bank borrowings; and (iii) foreign exchange gains or losses.
Our other income increased from approximately $0.02 million for the six months ended June 30, 2025, to approximately $0.05 million for the six months ended June 30, 2026, primarily due to an increase in tax subsidy income.
Income tax expenses
Cayman Islands and British Virgin Islands (the “BVI”)
We are incorporated in the Cayman Islands and our wholly own subsidiary is incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands or the BVI.
Hong Kong
In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.
PRC
Generally, under the Enterprise Income Tax Law of PRC, PRC enterprises are subject to a uniform 25% enterprise income tax rate, while preferential tax rates, tax holidays, and tax exemptions may be granted on a case-by-case basis.
In addition, the Enterprise Income Tax Law grants preferential tax treatment to a High and New Technology Enterprise (“HNTE”), if the enterprise meets the requirements by local government and maintains the HNTE status by re-applying every three years. Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%.
For the six months ended June 30, 2026 and 2025, Ewatt was eligible for a reduced income tax rate of 15% as an HNTE.
Our income tax expense was approximately $125,096 for the six months ended June 30, 2026, compared to the income tax benefit of $1,703 for the six months ended June 30, 2025.
Net income (loss)
As a result of the foregoing, primarily due to the significant increase in gross profit, driven by higher revenue and improved gross profit margin, together with lower general and administrative expenses, we recorded net income of approximately $1.01 million for the six months ended June 30, 2026, compared with a net loss of approximately $1.98 million for the six months ended June 30, 2025.
B. Liquidity and Capital Resources
As of June 30, 2026, we had approximately $45.47 million in cash and cash equivalents. Our principal sources of liquidity during the six months ended June 30, 2026 were proceeds from our multiple PIPE offerings and the ATM offering, together with bank borrowings and other financing sources. We used our cash primarily to fund purchases of raw materials, equipment and property, as well as other operating expenses.
We believe that our existing cash balance, working capital and anticipated cash flows from operations, together with available financing sources, will be sufficient to meet our anticipated working capital requirements and other cash needs for at least the next 12 months. We may, however, seek additional equity or debt financing from time to time to support the expansion of our business, capital expenditures, strategic opportunities or other corporate purposes. Any additional equity financing may result in dilution to our shareholders, while additional debt financing may increase our debt service obligations and may subject us to restrictive covenants.
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Indebtedness. As of June 30, 2026, we have short-term bank loans of approximately $6.97 million, finance lease liabilities of approximately $0.05 million and amounts due to related parties of approximately $0.86 million. Besides these loans and finance leases, we did not have any other debts, guarantees, or other material contingent liabilities.
Capital Commitments. As of June 30, 2026, we had a capital commitment of approximately $3.76 million in connection with a construction project, representing the remaining contracted amount that had not yet been incurred or recognized in our unaudited condensed consolidated financial statements. The total contract amount for the project was approximately $16.33 million. For further information, see Note 22 to our unaudited condensed consolidated financial statements.
Off-Balance Sheet Arrangements. We have not entered into any financial guarantees or similar arrangements to guarantee the payment obligations of any third parties. Furthermore, we do not have any retained or contingent interests in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. Moreover, we do not have any variable interests in any unconsolidated entity that we provide financing, liquidity, market risk, or credit support to or engage in hedging or research and development services with us.
Capital Resources. The primary drivers and material factors impacting our liquidity and capital resources include our ability to generate sufficient cash flows from our operations and renew commercial bank loans, as well as receive proceeds from equity and debt financing, to ensure our future growth and expansion plans.
Working Capital. Total working capital as of June 30, 2026 amounted to approximately $52.97 million, compared to approximately $9.60 million as of December 31, 2025.
Capital Needs. Our capital needs include our daily working capital needs and capital needs to finance the expansion of our business. Our management believes that the working capital and income generated from our current operations can satisfy our daily working capital needs for at least the next 12 months. Our daily working capital mainly includes day-to-day operational expenses, such as wages, raw materials, equipment and other operational cash needs. We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated:
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (3,268,412 | ) | $ | (2,943,548 | ) | ||
| Net cash used in investing activities | (14,882,615 | ) | (5,019,866 | ) | ||||
| Net cash provided by financing activities | 56,248,985 | 6,909,798 | ||||||
| Effect of exchange rate changes on cash held in foreign currencies | 650,217 | 301,762 | ||||||
| Net increase (decrease) in cash | 38,748,175 | (751,854 | ) | |||||
| Cash at beginning of the period | 6,717,787 | 2,467,638 | ||||||
| Cash at end of the period | $ | 45,465,962 | $ | 1,715,784 | ||||
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Operating activities
For the six months ended June 30, 2026, our net cash used in operating activities was $3.27 million, which was primarily attributable to (i) an increase of approximately $2.96 million in accounts receivable, mainly due to higher revenue and the timing of collections from customers; (ii) an increase of approximately $1.25 million in inventories, primarily due to higher procurement of raw materials and components to support our business activities, including our intelligent equipment business; and (iii) a decrease of approximately $0.81 million in accounts payable, mainly due to the timing of payments to suppliers and the settlement of certain outstanding balances during the period.
For the six months ended June 30, 2025, our net cash used in operating activities was $2.94 million, which was primarily attributable to (i) an increase of approximately $1.76 million of stock compensation; (ii) an increase of approximately $3.30 million of accounts receivable due to the increase of revenue of and approximately US$3.09 million of revenue was recognized in late June 2025. As of June 30, 2025, the related accounts receivable remained outstanding; and (iii) a decrease of accounts payable by approximately $1.41 million, as purchases of raw materials were relatively lower in the first half of 2025, with increased procurement and inventory stocking expected in the second half.
Investing activities
For the six months ended June 30, 2026, our net cash used in investing activities was approximately $14.88 million, which was attributable to (i) purchase of short-term investments by $3.00 million; and (ii) purchase of property, plant and equipment by approximately $11.84 million.
For the six months ended June 30, 2025, our net cash used in investing activities was approximately $5.02 million, which was attributable to (i) purchase of property and equipment by approximately $0.62 million; and (ii) an increase of approximately $4.40 million related to loans to a third party, which was recollected in December 2025.
Financing activities
For the six months ended June 30, 2026, our net cash provided by financing activities was $56.25 million, which was attributable to (i) the proceeds of approximately $32.34 million received from PIPE offering, net of offering costs; (ii) the proceeds of approximately $21.15 million received from ATM offering, net of offering costs; (iii) proceeds of approximately $4.72 million received from short-term bank borrowings; and (iv) repayment of approximately $2.51 million of short-term bank borrowings.
For the six months ended June 30, 2025, our net cash provided by financing activities was $6.91 million, which was attributable to (i) the proceeds of approximately $7.06 million received from initial public offering, net of offering costs; (ii) proceeds of approximately $3.20 million received from short-term bank borrowings; and (iii) repayment of approximately $3.34 million of short-term bank borrowings.
Contractual obligations
The following table sets forth our contractual obligations as of June 30, 2026:
| Contractual obligations | Total | Less than 1 year | 1 to 2 years | 3 to 5 years | ||||||||||||
| Short-term bank loans | $ | 6,969,090 | $ | 6,969,090 | — | — | ||||||||||
| Finance lease liabilities, including future interest expense | 45,936 | 45,936 | — | — | ||||||||||||
| Capital commitment for construction project | 3,757,745 | 3,757,745 | ||||||||||||||
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Short-term loans as of June 30, 2026 consisted of following:
| As of June 30, 2026 short-term bank loans | Loan commencement date | Loan maturity date | Loan amount in RMB | Loan amount in USD | Effective interest rate | |||||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 10, 2026 | 6,780,000 | $ | 999,248 | 1.30 | % | |||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 14, 2026 | 6,170,000 | 909,345 | 1.30 | % | ||||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 16, 2026 | 7,050,000 | 1,039,041 | 1.30 | % | ||||||||||
| Industrial and Commercial Bank of China | April 1, 2026 | March 12, 2027 | 7,000,000 | 1,031,675 | 1.30 | % | ||||||||||
| Industrial and Commercial Bank of China | April 8, 2026 | April 7, 2027 | 2,800,000 | 412,669 | 1.30 | % | ||||||||||
| Fujian Rural Commercial Bank | August 29, 2025 | August 29, 2026 | 2,500,000 | 368,454 | 4.95 | % | ||||||||||
| China Merchants Bank | February 11, 2026 | February 10, 2027 | 4,073,940 | 600,424 | 2.80 | % | ||||||||||
| China Merchants Bank | February 13, 2026 | February 12, 2027 | 1,254,032 | 184,821 | 2.80 | % | ||||||||||
| China Merchants Bank | March 20, 2026 | March 19, 2027 | 5,228,000 | 770,512 | 1.70 | % | ||||||||||
| China Merchants Bank | March 31, 2026 | March 30, 2027 | 2,100,000 | 309,502 | 1.70 | % | ||||||||||
| China Merchants Bank | April 14, 2026 | April 13, 2027 | 1,250,000 | 184,227 | 1.70 | % | ||||||||||
| China Merchants Bank | April 23, 2026 | April 22, 2027 | 1,080,000 | 159,172 | 1.70 | % | ||||||||||
| Total short-term bank loans as of June 30, 2026 | 47,285,972 | $ | 6,969,090 | |||||||||||||
The following table sets forth our contractual obligations as of December 31, 2025:
| Contractual obligations | Total | Less than 1 year | 1 to 2 years | 3 to 5 years | ||||||||||||
| Short-term bank loans | $ | 4,618,839 | $ | 4,618,839 | — | — | ||||||||||
Short-term loans as of December 31, 2025 consisted of following:
| For the year ended December 31, 2025 short-term bank loans | Loan commencement date | Loan maturity date | Loan amount in RMB | Loan amount in USD | Effective interest rate | |||||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 10, 2026 | 6,780,000 | $ | 969,527 | 1.30 | % | |||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 14, 2026 | 6,170,000 | 882,298 | 1.30 | % | ||||||||||
| Industrial and Commercial Bank of China | July 28, 2025 | July 16, 2026 | 7,050,000 | 1,008,137 | 1.30 | % | ||||||||||
| Industrial and Commercial Bank of China | May 21, 2025 | May 7, 2026 | 7,000,000 | 1,000,987 | 3.85 | % | ||||||||||
| Industrial and Commercial Bank of China | February 28, 2025 | February 6, 2026 | 2,800,000 | 400,395 | 3.85 | % | ||||||||||
| Fujian Rural Commercial Bank | August 29, 2025 | August 29, 2026 | 2,500,000 | 357,495 | 4.95 | % | ||||||||||
| Total short-term bank loans as of December 31, 2025 | 32,300,000 | $ | 4,618,839 | |||||||||||||
All properties owned by the Operating Entity in the below table are subject to a mortgage with a maturity date of April 7, 2027.
| Description | Use | Area (Square Feet) | ||||
| Floor No. 1 of Building No. 1 | Office and Manufacturing Facilities | 18,497 | ||||
| Floor No. 1 of Building No. 2 | Office and Manufacturing Facilities | 24,918 | ||||
| Floors No. 1 – 7 of Building No. 6 | Office and Manufacturing Facilities | 43,813 | ||||
| Floors No. 1 – 8 of Building No. 7 | Office and Manufacturing Facilities | 38,900 | ||||
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The following table presents maturity of lease liabilities as of June 30, 2026:
| Minimum lease payment | ||||
| Six months ended December 31, 2026 | $ | 29,998 | ||
| Fiscal year 2027 | 15,938 | |||
| Less: imputed interest | (594 | ) | ||
| Present value of finance lease liabilities | $ | 45,342 | ||
Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of June 30, 2026.
C. Trend Information
Other than as disclosed elsewhere in this report, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenue, income from continuing operations, profitability, liquidity, or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 2026 and December 31, 2025.
Inflation
Inflation does not materially affect our business or the results of our operations.
Seasonality
We have not experienced, and do not expect to experience, any seasonal fluctuations in our results of operations for our business.
D. Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the unaudited condensed consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable and inventories, useful lives of property, plant and equipment and intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this Form 6-K reflect the more significant judgments and estimates used in preparation of our unaudited condensed consolidated financial statements.
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The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our unaudited condensed consolidated financial statements:
Uses of estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of 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, we review these estimates and assumptions using currently available information. Changes in facts and circumstances may cause us to revise our estimates. In accordance with ASC 250, changes in estimates will be recognized in the same period in which the changes in facts and circumstances occur. We base our estimates on past experiences and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates we use when accounting for items and matters include, but are not limited to, allowances for expected credit losses, estimates for inventory provisions, useful lives and impairment of long-lived assets, and valuation allowance for deferred tax assets.
Accounts receivable, net
Accounts receivable are recorded at the gross billing amount less allowance for expected credit losses from our customers. Accounts receivable do not bear interest.
Since January 1, 2020, we have adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaced the existing incurred loss impairment model with an expected loss methodology, which results in more timely recognition of credit losses. Upon adoption, we changed our impairment model to utilize a forward-looking current expected credit losses (“CECL”) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.
We maintain an allowance for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”), and record the allowance for credit losses as an offset to accounts receivable and contract assets, with the estimated credit losses charged to the allowance in the consolidated statements of operations and comprehensive income (loss). We assess collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business lines, services or product offerings, and on an individual basis when we identify specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, we consider historical collectability based on past-due status, the age of the accounts receivable balances and contract assets balances, credit quality of our customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers.
Inventories
Inventories, primarily consisting of raw materials, finished goods, goods shipped in transit, and work in progress, are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell the products. We determine the cost of inventories using the weighted-average cost method. We periodically evaluate our inventories for excess quantities and obsolescence. We write down the carrying amounts of inventories identified as obsolete or in excess of forecasted usage to their estimated net realizable value, based on factors including aging and anticipated future demand for each inventory category.
Revenue recognition
Under ASC 606, revenue is recognized when control of promised goods or services is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligations. VAT that we collect concurrent with revenue-producing activities is excluded from revenue.
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We follow the requirements of Topic 606-10-55-36 through 55-40, Revenue from Contracts with Customers, Principal Agent Considerations, in determining whether revenue related to performance obligations in a contract with a customer should be recognized on a gross or net basis. Revenue recorded when we act as a principal is reported on a gross basis equal to the full amount of consideration to which we expect to be entitled in exchange for the goods or services transferred. Revenue recorded when we act as an agent is reported on a net basis, excluding any consideration payable to the principal party in the transaction.
We account for revenue generated from sales of our products, including injection molding machine-dedicated manipulator arms, accessories of manipulator arms, raw materials and scraps of manipulator arms, and services, including installation and warranty services, on a gross basis because we act as the principal in these transactions. In making this determination, we consider, among other factors, whether we control the specified goods or services before they are transferred to customers, whether we are subject to inventory risk, whether we have discretion in establishing prices, and whether we are primarily responsible for fulfilling the promise to provide the specified goods or services to our customers.
Our revenue is primarily derived from the following sources:
Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services
We generate revenue from the sales of standard and customized manipulator arms to customers. We enter into contracts with customers as a principal. For domestic customers, the contracts contain three performance obligations, including the transfer of the products, installation services, and warranty services, in exchange for consideration. For overseas customers, the contracts contain a single performance obligation, which is the transfer of the products to the customers in exchange for consideration. The pricing and payment terms stipulated in the contracts are fixed. We generally offer credit terms of up to 120 days to business customers with good creditworthiness. We recognize revenue at a point in time when control of the products is transferred to customers. The transfer of control is considered complete when the products have been delivered to and accepted by the customers in accordance with the terms of the sales contracts. In the normal course of business, our products are sold with no right of return unless the products are defective. We generally provide a one-year warranty against defects in materials and workmanship.
Revenue from sales of accessories of manipulator arms
We generate revenue from the sales of manipulator arm accessories. Our customer base includes both customers that purchase directly from us and customers that procure our manipulator arms through third-party vendors. The contracts contain a single performance obligation, which is the delivery of manipulator arm accessories to customers in exchange for consideration. The pricing and payment terms stipulated in the contracts are fixed. We recognize revenue at a point in time when control of the manipulator arm accessories is transferred to customers. The transfer of control is considered complete when the manipulator arm accessories have been delivered to and received by the customers. In the normal course of business, our manipulator arm accessories are sold with no right of return.
Revenue from sales of raw materials and scraps of manipulator arms
We generate revenue from the sales of raw materials and scraps of manipulator arms. Our customer base includes both customers that purchase directly from us and customers that procure our manipulator arms through third-party vendors. The contracts contain a single performance obligation, which is the delivery of raw materials and scraps of manipulator arms to customers in exchange for consideration. The pricing and payment terms stipulated in the contracts are fixed. We recognize revenue at a point in time when control of the raw materials and scraps is transferred to customers. The transfer of control is considered complete when the raw materials and scraps have been delivered to and received by the customers. In the normal course of business, our raw materials and scraps are sold with no right of return.
Revenue from installation services
We generate revenue from providing installation services to customers that procure our manipulator arms through third-party vendors. The contracts contain a single performance obligation, which is the installation of the manipulator arms specified by the customer in exchange for consideration. The pricing and payment terms stipulated in the contracts are fixed. We recognize revenue at a point in time when we have completed the installation services and the customer has accepted the installed manipulator arms, with no further performance obligations remaining.
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Revenue from new energy sector-focused products
We generate revenue from the sale of new energy sector-focused products used in lithium battery manufacturing processes, including battery cell outer blue film dispensing systems, to customers. We act as the principal in these contracts. The contracts generally contain four performance obligations: delivery of the equipment, installation and commissioning services, training services, and warranty services. We are responsible for delivering the equipment to the customer’s designated location, where the equipment is subject to inspection and acceptance testing. We also provide installation and commissioning services, including domestic pre-acceptance and final overseas acceptance. We provide training services to enable the customer’s staff to properly operate the equipment for production purposes. In addition, we provide warranty services covering maintenance and repair for a period of 12 months from the acceptance date. The pricing and payment terms stipulated in the contracts are fixed. We generally offer customary credit terms to customers based on their creditworthiness. We recognize revenue at a point in time upon completion of installation and commissioning and acceptance by the customer, when control of the equipment is transferred to the customer. In the normal course of business, our equipment is sold with no right of return unless the equipment is defective or fails to meet the agreed specifications. We generally provide standard warranty services for our equipment, which assure that the equipment complies with agreed-upon specifications and are accounted for as assurance-type warranties.
Contract Assets and Liabilities
Payment terms are established based on our pre-established credit requirements and our evaluation of customers’ credit quality. Contract assets are recognized when we have transferred goods or services to a customer but do not yet have an unconditional right to consideration and are subsequently reclassified to accounts receivable when the right to consideration becomes unconditional. Contract liabilities are recognized when we receive consideration from customers in advance of the delivery of goods or services. The balance of contract liabilities may vary significantly depending on the timing of customer orders and the related shipment or delivery. As of June 30, 2026 and December 31, 2025, other than accounts receivable, advances from customers and contract liabilities, we had no other material contract assets or deferred contract costs recorded on our consolidated balance sheets.
Revenue disaggregation
Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard. Revenue under the segment reporting standard is measured on the same basis as under the revenue standard.
Our disaggregation of revenue for the six months ended June 30, 2026 and 2025 are as follows:
| For the six months ended June 30 | ||||||||
| 2026 | 2025 | |||||||
| Revenue from sales of injection molding machine-dedicated manipulator arms and installation and warranty services | $ | 4,974,047 | $ | 4,373,031 | ||||
| Revenue from sales of accessories of manipulator arms | 398,360 | 386,603 | ||||||
| Revenue from sales of raw materials and scraps | 4,203,078 | 5,469,831 | ||||||
| Revenue from installation services | 6,528 | 41,523 | ||||||
| Revenue from new energy sector-focused products | 3,360,644 | — | ||||||
| Total revenue | $ | 12,942,657 | $ | 10,270,988 | ||||
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Income taxes
We account for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in our consolidated financial statements and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.
The provisions of ASC 740-10-25, Accounting for Uncertainty in Income Taxes, prescribe a more-likely-than-not threshold for the recognition and measurement in the consolidated financial statements of a tax position taken, or expected to be taken, in a tax return. ASC 740 also provides guidance on the recognition of income tax assets and liabilities, the classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. We believe that there were no uncertain tax positions as of June 30, 2026 and December 31, 2025.
Our affiliated entities in the PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations may be extended to five years under special circumstances.
As of June 30, 2026, the tax years for our affiliated entities in the PRC remained open for examination by the PRC tax authorities. There were no ongoing tax examinations as of June 30, 2026 and December 31, 2025.
Foreign currency translation
Our functional and reporting currency is the United States Dollar (“US$”). Our operating subsidiary in China uses Renminbi (“RMB”) as its functional currency.
The financial statements of our subsidiaries whose functional currencies are other than the US$ are translated into US$ using the exchange rate in effect as of the balance sheet date for assets and liabilities and the average exchange rate for the period for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable exchange rates in effect as of that date. Shareholders’ equity accounts denominated in the functional currency are translated at historical exchange rates in effect at the time of the related capital contributions. Because cash flows are translated using average exchange rates, amounts related to assets and liabilities reported in our consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances in our consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) in our consolidated statements of changes in shareholders’ equity. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in currencies other than the functional currency are included in our results of operations as incurred.
For purposes of translating our financial statements, except for shareholders’ equity, balance sheet accounts as of June 30, 2026 and December 31, 2025 were translated at RMB6.7851 to US$1.00 and RMB6.9931 to US$1.00, respectively. Shareholders’ equity accounts were translated at their historical exchange rates. The average exchange rates applied to our statements of operations for the six months ended June 30, 2026 and 2025 were RMB6.8624 to US$1.00 and RMB7.1875 to US$1.00, respectively. Cash flows were also translated using the average exchange rates for the respective periods. Accordingly, amounts reported in our statements of cash flows will not necessarily agree with changes in the corresponding balances in our consolidated balance sheets.
Recent accounting pronouncements
We consider the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued and has evaluated all other pronouncements.
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In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The amendments in this ASU are intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to financial statements, all relevant expense captions presented on the face of the income statement in continuing operations into the purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact the adoption of ASU 2024-03 will have on its combined financial statements and related disclosures.
In April 2025, the FASB issued ASU 2025-04 – Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the definition of performance condition for share-based consideration payable to a customer, eliminates the forfeiture policy election for awards granted to customers (unless granted in exchange for a distinct good or service), and clarifies applicability of the variable consideration constraint. The ASU will be effective for annual reporting periods (including interim periods within annual reporting periods) beginning after December 15, 2026, for all entities. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this Update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the impact of the adoption of this guidance. We believe the future adoption of this ASU is not expected to have a material impact on its financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update improves U.S. GAAP by establishing authoritative guidance on the accounting for government grants received by business entities. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. We are currently in the process of evaluating the impact this amended guidance may have on its consolidated financial statements
Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material effect on the Company’s financial position, result of operations, or cash flows.
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Exhibit 99.3
INLIF LIMITED Reports First Half of Fiscal Year 2026 Financial Results
Quanzhou, China, September 24, 2026 /PRNewswire/ -- INLIF LIMITED (Nasdaq: INLF) (together with all its subsidiaries and consolidated entities, the “Company” or “INLIF”), a company engaged in the research, development, manufacturing, and sales of injection molding machine-dedicated manipulator arms, today announced its unaudited financial results for the first half of fiscal year 2026 ended June 30, 2026.
Mr. Rongjun Xu, Chief Executive Officer of INLIF, remarked, “We are pleased to present our financial results for the first half of fiscal year 2026, which reflect continued growth in both revenue and gross profit compared with the same period in fiscal year 2025. We have also reported net income of approximately $1.01 million in the current period, compared with a net loss of approximately $1.98 million in the same prior period in 2025, an improvement of approximately $3.0 million.
This growth was driven by the expansion of our customer base, rising demand for manipulator arms, and, in particular, sales from our newly launched intelligent equipment business, which generated $3.36 million in revenue and accounted for 25.97% of total revenue during the period, compared with no revenue contribution in the same period last year.
With net revenue increasing by 26.01%, our gross profit grew by 158.77%, while gross profit margin increased from 17.50% to 35.95%. These results reflect the progress of our strategy to expand into the new energy and intelligent equipment sectors and further diversify our business.
To sustain this growth momentum and expand our long-term growth potential, we continued to increase our investments in sales and research and development (‘R&D’), with related expenses increasing by 50.21% and 49.18% year over year, respectively. To support sales growth, we increased performance-based compensation incentives for our sales personnel and expanded spending on sales activities. At the same time, our R&D team more than doubled in size, from 31 to 72 employees, and we continued to invest in the development of industrial robots. While the industrial robots remain in the R&D and product validation stages, we believe they represent an important area of future development for the Company.
Alongside increased investments in sales, technology, and new product development, we maintained disciplined cost management across the organization. As a result, general and administrative expenses decreased by 34.42%, primarily reflecting the absence of one-time share-based compensation granted to three key administrative employees in the prior-year period. This reduction underscores our continued focus on maintaining operating efficiency while selectively investing in areas that support long-term growth.
During the period, we also completed a PIPE offering and established an At-the-Market program to help support our operational and expansion needs. We believe these additional capital resources provide a solid foundation to support our business development for the foreseeable future. Moving forward, we will focus on strengthening our technological innovation and organic growth capabilities in an efficient and disciplined manner, while continuing to expand and consolidate our new business initiatives.”
First Half of Fiscal Year 2026 Financial Highlights
| ● | Net revenue was $12.94 million for the first half of fiscal year 2026, representing an increase of 26.01% from $10.27 million for the same period of last year. |
| ● | Gross profit was $4.65 million for the first half of fiscal year 2026, representing an increase of 158.77% from $1.80 million for the same period of last year. |
| ● | Gross profit margin increased to 35.95% for the first half of fiscal year 2026, from 17.50% for the same period of last year. |
| ● | Net income was $1.01 million for the first half of fiscal year 2026, compared to a net loss of $1.98 million for the same period of last year. |
| ● | Basic and diluted earnings per share were $10.01 for the first half of fiscal year 2026, compared to basic and diluted loss per share of $427.48 for the same period of last year. |
First Half of Fiscal Year 2026 Financial Results
Net Revenue
Net revenue was $12.94 million for the first half of fiscal year 2026, representing an increase of 26.01% from $10.27 million for the same period of last year. The increase was primarily attributable to (i) an increase in sales of manipulator arms, including installation and warranty services, by approximately $0.60 million, mainly due to higher purchase volumes from certain existing customers and contributions from newly acquired customers; (ii) an increase in sales of accessories by approximately $0.01 million, which remained relatively stable compared with the prior-year period; and (iii) sales of intelligent equipment of approximately $3.36 million, primarily used in the new energy sector, driven by customers’ needs for new production lines, capacity expansion and automation upgrades. These increases were partially offset by (iv) a decrease in sales of raw materials and scraps of approximately $1.27 million, primarily due to the Company’s adoption of a more demand-driven procurement approach, lower customer demand for certain raw materials, and enhanced production and inventory controls that reduced the volume of scraps generated; and (v) a decrease in installation service revenue of approximately $0.03 million, primarily due to lower installation volumes, shorter installation time for certain products, and an increasing number of customers performing installation using their own personnel or requiring only limited technical assistance from the Company.
| ● | Sales of manipulator arms and installation and warranty services were $4.97 million for the first half of fiscal year 2026, representing an increase of 13.74% from $4.37 million for the same period of last year. |
| ● | Sales of accessories were $0.40 million for the first half of fiscal year 2026, representing an increase of 3.04% from $0.39 million for the same period of last year. |
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| ● | Sales of raw materials and scraps were $4.20 million for the first half of fiscal year 2026, compared to $5.47 million for the same period of last year. |
| ● | Sales of installation services were $6,528 for the first half of fiscal year 2026, compared to $41,523 for the same period of last year. |
| ● | Sales of intelligent equipment were $3.36 million for the first half of fiscal year 2026, compared to nil for the same period of last year. |
Cost of Revenue
Cost of revenue was $8.29 million for the first half of fiscal year 2026, representing a decrease of 2.16% from $8.47 million for the same period of last year. The decrease was primarily attributable to a significant reduction in the cost of raw materials sold, partially offset by costs associated with the Company’s newly developed intelligent equipment business and higher costs of accessories.
Gross Profit and Gross Profit Margin
Gross profit was $4.65 million for the first half of fiscal year 2026, representing an increase of 158.77% from $1.80 million for the same period of last year. The increase was mainly due to (i) an increase in gross profit from sales of manipulator arms, including installation and warranty services, by approximately $0.46 million; (ii) an increase in gross profit from sales of raw materials and scraps by approximately $1.99 million; (iii) an increase in gross profit from sales of intelligent equipment by approximately $0.64 million; and (iv) offset by a decrease in gross profit from sales of accessories and installation services by approximately $0.21 million and $0.03 million, respectively.
Gross profit margin increased to 35.95% for the first half of fiscal year 2026, from 17.50% for the same period of last year.
Operating Expenses
Operating expenses were $3.53 million for the first half of fiscal year 2026, representing a decrease of 8.73% from $3.87 million for the same period of last year.
| ● | Selling expenses were $0.62 million for the first half of fiscal year 2026, representing an increase of 50.21% from $0.41 million for the same period of last year. The increase was mainly due to (i) an increase of approximately $0.10 million in salaries and benefits, primarily due to higher performance-based compensation for sales personnel as the Company’s revenue increased; (ii) an increase of approximately $0.02 million in business entertainment expenses, mainly due to increased customer visits and related business development activities; (iii) an increase of approximately $0.03 million in traveling expenses, primarily due to more frequent business trips by the Company’s sales personnel to support the expansion of the Company’s sales activities; and (iv) an increase of approximately $0.06 million in transportation expenses, mainly due to higher customer-related transportation costs associated with the increase in sales. |
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| ● | General and administrative expenses were $1.76 million for the first half of fiscal year 2026, representing a decrease of 34.42% from $2.68 million for the same period of last year. The decrease was mainly due to a decrease of approximately $1.63 million in share-based compensation expenses, primarily because equity incentives were granted to three key administrative employees during the first half of 2025, while no comparable grants were made during the first half of 2026. |
| ● | Research and development expenses were $1.15 million for the first half of fiscal year 2026, representing an increase of 49.18% from $0.77 million for the same period of last year. The increase was primarily attributable to the expansion of the Company’s research and development team, with headcount increasing from 31 in June 2025 to 72 in June 2026, resulting in higher personnel costs. The Company also continued to invest in the development of industrial robots, which remained in the research, development and product validation stage during the period. |
Net Income (Loss)
Net income was $1.01 million for the first half of fiscal year 2026, compared to a net loss of $1.98 million for the same period of last year.
Basic and Diluted Earnings (Loss) per Share
Basic and diluted earnings per share were $10.01 for the first half of fiscal year 2026, compared to basic and diluted loss per share of $427.48 for the same period of last year.
Financial Condition
As of June 30, 2026, the Company had cash and cash equivalents of $45.47 million, compared to $6.72 million as of December 31, 2025. The Company’s principal sources of liquidity during the six months ended June 30, 2026 were proceeds from its PIPE and ATM offerings, together with bank borrowings and other financing sources.
Net cash used in operating activities was $3.27 million for the first half of fiscal year 2026, compared to $2.94 million for the same period of last year.
Net cash used in investing activities was $14.88 million for the first half of fiscal year 2026, compared to $5.02 million for the same period of last year.
Net cash provided by financing activities was $56.25 million for the first half of fiscal year 2026, compared to $6.91 million for the same period of last year.
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About INLIF LIMITED
INLIF is a holding company and an exempted company incorporated in the Cayman Islands with limited liability. Through its operating entity in the People’s Republic of China, Ewatt Robot Equipment Co. Ltd., established in September 2016, INLIF is engaged in the research, development, manufacturing, and sales of injection molding machine-dedicated manipulator arms. It is also a provider of installation services and warranty services for manipulator arms, and accessories and raw materials for manipulator arms. The Company produces an extensive portfolio of injection molding machine-dedicated manipulator arms, including transverse single and double-axis manipulator arms, transverse and longitudinal multi-axis manipulator arms, and large bullhead multi-axis manipulator arms, all developed by itself. It has also built experience in industrial automation solutions, including in the new energy sector, as well as intelligent robotics in recent years. For more information, please visit the Company’s website: https://ir.yiwate88.com/.
Forward-Looking Statements
Statements in this announcement with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “approximate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.
All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For investor and media inquiries, please contact:
INLIF LIMITED
Investor Relations Department
Email: ir@yiwate88.com
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
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INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars, except for the number of shares)
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 45,465,962 | $ | 6,717,787 | ||||
| Short-term investments | 3,000,000 | — | ||||||
| Accounts receivable, net | 8,842,220 | 5,906,938 | ||||||
| Inventories | 6,747,700 | 5,497,426 | ||||||
| Prepayments and other current assets | 235,803 | 96,086 | ||||||
| Amounts due from related parties | 58,224 | 12,656 | ||||||
| TOTAL CURRENT ASSETS | $ | 64,349,909 | $ | 18,230,893 | ||||
| NON-CURRENT ASSETS: | ||||||||
| Property, plant, and equipment, net | $ | 16,201,530 | $ | 4,248,793 | ||||
| Land-use rights, net | 2,216,734 | 2,175,012 | ||||||
| Intangible assets, net | 38,781 | 40,315 | ||||||
| Finance lease assets | 49,301 | 76,535 | ||||||
| Deferred tax assets | 7,088 | 5,804 | ||||||
| TOTAL NON-CURRENT ASSETS | $ | 18,513,434 | $ | 6,546,459 | ||||
| TOTAL ASSETS | $ | 82,863,343 | $ | 24,777,352 | ||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 2,475,510 | $ | 3,286,866 | ||||
| Bank loans | 6,969,090 | 4,618,839 | ||||||
| Contract liabilities | 211,465 | 8,674 | ||||||
| Accrued expenses and other payables | 695,873 | 347,598 | ||||||
| Warranty liabilities | 27,728 | 25,941 | ||||||
| Income taxes payable | 100,882 | — | ||||||
| Amounts due to related parties | 858,911 | 281,871 | ||||||
| Current finance lease liabilities | 45,342 | 57,326 | ||||||
| TOTAL CURRENT LIABILITIES | $ | 11,384,801 | $ | 8,627,115 | ||||
| NON-CURRENT LIABILITIES: | ||||||||
| Finance lease liabilities | $ | — | $ | 15,368 | ||||
| TOTAL NON-CURRENT LIABILITIES | $ | — | $ | 15,368 | ||||
| TOTAL LIABILITIES | $ | 11,384,801 | $ | 8,642,483 | ||||
| COMMITMENTS AND CONTINGENCIES (NOTE 22) | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Class A Ordinary Share, $0.32 par value, 1,046,875 shares authorized; 1,046,390 shares and 2,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively* | $ | 334,845 | $ | 640 | ||||
| Class B Ordinary Share, $0.32 par value, 46,875 shares authorized; 3,908 shares issued and outstanding as of June 30, 2026 and December 31, 2025* | 1,250 | 1,250 | ||||||
| Additional paid-in capital | 70,887,594 | 17,727,063 | ||||||
| Statutory reserve | 539,506 | 361,083 | ||||||
| Retained earnings | (1,413,847 | ) | (2,244,434 | ) | ||||
| Accumulated other comprehensive income | 1,129,194 | 289,267 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | $ | 71,478,542 | $ | 16,134,869 | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 82,863,343 | $ | 24,777,352 | ||||
| * | The shares are presented on a retrospective basis to give effect to the 1-for-200 share consolidation of the Company’s authorized and issued ordinary shares effective July 6, 2026, following the 1-for-16 share consolidation of the Company’s authorized and issued ordinary shares effective April 6, 2026. |
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INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in U.S. Dollars, except for the number of shares)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 12,942,657 | $ | 10,270,988 | ||||
| Cost of revenues | (8,290,252 | ) | (8,473,079 | ) | ||||
| Gross profit | 4,652,405 | 1,797,909 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | (618,931 | ) | (412,056 | ) | ||||
| General and administrative expenses | (1,759,047 | ) | (2,682,433 | ) | ||||
| Research and development expenses | (1,149,759 | ) | (770,713 | ) | ||||
| Total operating expenses | (3,527,737 | ) | (3,865,202 | ) | ||||
| Operating income (loss) | 1,124,668 | (2,067,293 | ) | |||||
| Other income (expenses): | ||||||||
| Interest income | 12,389 | 135,574 | ||||||
| Interest expenses | (63,367 | ) | (94,780 | ) | ||||
| Other income, net | 45,030 | 19,810 | ||||||
| Other expense, net | (3,972 | ) | (4,272 | ) | ||||
| Exchange gain | 19,358 | 33,838 | ||||||
| Total other income, net | 9,438 | 90,170 | ||||||
| Income (Loss) before income tax | 1,134,106 | (1,977,123 | ) | |||||
| Income tax (expenses) benefits | (125,096 | ) | 1,703 | |||||
| Net income (loss) | $ | 1,009,010 | $ | (1,975,420 | ) | |||
| Comprehensive income (loss) | ||||||||
| Net income (loss) | $ | 1,009,010 | $ | (1,975,420 | ) | |||
| Foreign currency translation adjustments, net of tax | 839,927 | 218,808 | ||||||
| Comprehensive income (loss) | $ | 1,848,937 | $ | (1,756,612 | ) | |||
| Earnings (Loss) per share, basic and diluted | $ | 10.01 | $ | (427.48 | ) | |||
| Weighted average number of shares* | 100,826 | 4,621 | ||||||
| * | The shares are presented on a retrospective basis to reflect the 1-for-16 share consolidation effective April 6, 2026 and the subsequent 1-for-200 share consolidation effective July 6, 2026. |
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INLIF LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars, except for the number of shares)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 1,009,010 | $ | (1,975,420 | ) | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Share-based compensation | — | 1,764,000 | ||||||
| Depreciation and amortization | 175,074 | 141,432 | ||||||
| Allowance for (reversal of) credit losses | 20,500 | (2,333 | ) | |||||
| Amortization of finance lease right of use assets | 30,754 | 868 | ||||||
| Deferred tax assets | (1,285 | ) | (1,822 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (2,955,782 | ) | (3,299,235 | ) | ||||
| Inventories | (1,250,274 | ) | 1,637,759 | |||||
| Prepayments and other current assets | (139,718 | ) | (78,431 | ) | ||||
| Accounts payable | (811,356 | ) | (1,406,480 | ) | ||||
| Interest expense on finance lease liabilities | 929 | 541 | ||||||
| Contract liabilities | 202,791 | (1,712 | ) | |||||
| Accrued expenses and other payables | 348,276 | 281,237 | ||||||
| Warranty liabilities | 1,787 | 14,478 | ||||||
| Income taxes payable | 100,882 | (18,430 | ) | |||||
| Net cash used in operating activities | (3,268,412 | ) | (2,943,548 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant, and equipment | (11,837,047 | ) | (618,796 | ) | ||||
| Purchases of short-term investments | (3,000,000 | ) | — | |||||
| Loans to related parties | (45,568 | ) | (1,070 | ) | ||||
| Loan to a third party | — | (4,400,000 | ) | |||||
| Net cash used in investing activities | (14,882,615 | ) | (5,019,866 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Issuance of ordinary shares, net of offering costs | — | 7,060,133 | ||||||
| Net proceeds from PIPE offering | 32,344,244 | — | ||||||
| Net proceeds from ATM offering | 21,150,492 | — | ||||||
| Principal payments on finance lease liabilities | (31,449 | ) | (10,741 | ) | ||||
| Proceeds from short-term loans | 4,715,034 | 3,196,717 | ||||||
| Repayment of short-term loans | (2,506,375 | ) | (3,336,311 | ) | ||||
| Amount financed from related parties | 578,369 | — | ||||||
| Amount repaid to related parties | (1,330 | ) | — | |||||
| Net cash provided by financing activities | 56,248,985 | 6,909,798 | ||||||
| Effect of exchange rate changes | 650,217 | 301,762 | ||||||
| Net increase (decrease) in cash | 38,748,175 | (751,854 | ) | |||||
| Cash and cash equivalents at beginning of the period | 6,717,787 | 2,467,638 | ||||||
| Cash and cash equivalents at end of the period | $ | 45,465,962 | $ | 1,715,784 | ||||
| Supplemental disclosures of cash flows information: | ||||||||
| Cash paid for income taxes | 24,722 | 15,326 | ||||||
| Cash paid for interest expense | 64,168 | 94,780 | ||||||
| Supplementary disclosure of non-cash information: | ||||||||
| Right of use assets obtained in exchange for finance lease liabilities | — | 112,071 | ||||||
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