NOTE 14 — INCOME TAXES

Our interim period tax provisions are based on the actual year to date effective tax rate (“ETR”), as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes — Interim Reporting,”. This method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. The Company believes that, at this time, the use of this method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings at the jurisdictional and subsidiary levels and (ii) the Company’s ongoing assessment that the recoverability of its deferred tax assets is not likely in jurisdictions which are not profitable.

Our ETR was (718.17)% and (20.44)% for the six months ended June 30, 2025 and 2024, which was different than our Cayman island statutory income tax rate of 0% primarily due to tax accruals in jurisdictions with rates different than our statutory rate and the recognition of full valuation allowances on deferred tax assets with respect to jurisdictions in which we are not profitable.

NOTE 23 — INCOME TAXES

Income Before Income Taxes

The below table presents the jurisdictional composition of our income from continuing operations before income taxes for the years ended December 31, 2024, 2023 and 2022:

Income Tax Provision

For the years ended December 31, 2024, 2023 and 2022, the current and deferred tax expense allocated to continuing operations were as follows:

Tax Rate Reconciliation

Our effective tax rate was (114.71)%, 79.98% and 49.03% for the years ended December 31, 2024, 2023 and 2022. A reconciliation between the income tax expense computed by applying the Cayman Island’s statutory income tax rate of 0% to income from continuing operations before income taxes and actual income tax expense were as follows:

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the deferred tax assets and liabilities are as follows:

We have income tax net operating loss carryforwards related to our international operations of $150,076,377. The below table presents the expiration of our net operating losses by jurisdiction as of December 31, 2024:

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2024. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

On the basis of this evaluation, as of December 31, 2024, a valuation allowance of $34,628,089 has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The net change in our valuation allowance for the year ended December 31, 2024 was an increase of $13,584,953. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.

Tax on Unremitted Foreign Earnings

In general, it is our practice and intention to reinvest the earnings of our foreign subsidiaries in those operations. As of December 31, 2024, we have not made a provision for foreign withholding taxes on approximately $317,352,026 of the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested. The jurisdictions to which this excess is attributable are United States and Mainland China in the amounts of $161,440,229 and $155,911,797, respectively. The estimated unrecorded amount of deferred tax liability related to investments in these foreign subsidiaries was $56,227,659 as of December 31, 2024. The jurisdictions to which the estimated unrecorded deferred tax liability is attributable are United States and Mainland China in the amounts of $48,432,069 and $7,795,590, respectively.

Unrecognized Tax Benefit

The following is a rollforward of our unrecognized tax benefits as of December 31, 2024:

Included in the balance of unrecognized tax benefits as of December 31, 2024 are $648,840 of tax benefits that, if recognized, would affect the effective tax rate.

We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, we accrued penalties of $21,148 and interest of $36,253 during 2024 and, in total, as of December 31, 2024, recognized a liability for penalties of $113,290 and interest of $69,559. During 2023, we accrued penalties and interest of $45,229 and $16,348, respectively, and had recognized, in total, a liability for penalty and interest of $92,142 and $57,957, respectively.

We are subject to taxation in the various foreign jurisdictions. The table below outlines the open tax years of the material jurisdictions.