v3.26.1
Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Taxes [Abstract]  
Schedule of Components of the Income Tax Provision

The components of the income tax provision (benefit) were as follows:

 

   For the years ended December 31, 
   2025   2024   2023 
Current               
Mainland China  $59   $6,009   $228 
Deferred               
Mainland China   (446)   (446)   (454)
Total  $(387)  $5,563   $(226)
Schedule of Loss Before Income Taxes Geographic Locations

Loss before income taxes was attributable to the following geographic locations for the years ended December 31:

 

   For the years ended December 31, 
   2025   2024   2023 
Mainland China  $(18,428,196)  $(16,127,911)  $(26,296,232)
Others   (8,231,572)   (1,847,690)   (6,624,718)
Loss before income taxes  $(26,659,768)  $(17,975,601)  $(32,920,950)
Schedule of Reconciliation of Taxes

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, the reconciliation of taxes at the Mainland China EIT rate to our income tax expense for the year ended December 31, 2025 was as follows:

 

   Amount   Percent 
         
Mainland China EIT rate  $(6,664,942)   25%
Foreign tax effects          
Cayman Island          
Statutory tax rate difference between Mainland China and Cayman Island   238,143    (0.89)%
Share-based compensation   80,597    (0.30)%
Share subscription discount expenses   1,633,734    (6.13)%
Hong Kong          
Statutory tax rate difference between Mainland China and Hong Kong   35,809    (0.13)%
Changes in valuation allowances   69,512    (0.26)%
Other jurisdiction   2,511    (0.01)%
Effect of changes in rates enacted in the current period   77,600    (0.29)%
Tax credits          
Research and development tax credits   (289,302)   1.09%
HNTE tax rate credits   1,666,203    (6.25)%
Changes in valuation allowances   1,512,384    (5.69)%
Nontaxable or nondeductible items          
Non-deductible expense   53,140    (0.20)%
Effect of true up on net operating loss in the tax returns   1,352,834    (5.07)%
Effect of expired net operating loss   231,390    (0.87)%
Effective tax rate  $(387)  $0.00%

 

The reconciliation of taxes at the Mainland China EIT rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

 

   For the years ended December 31, 
   2024   2023 
Loss before income taxes  $(17,975,601)  $(32,920,950)
Mainland China EIT rate   25%   25%
Income taxes computed at statutory EIT rate  $(4,493,900)  $(8,230,238)
Reconciling items:          
Effect of tax holiday and preferential tax rate   1,040,003    (338)
Effect of changes in tax rate   2,123,753    (1,194,103)
Effect of tax rates in foreign jurisdictions   218,737    1,117,727 
Effect of non-deductible share-based compensation   243,186    536,450 
Effect of true up on net operating loss in the tax returns   696,285    687,460 
Effect of non-deductible expense   44,535    6,277 
Super deduction of qualified R&D expenditures   (231,020)   
-
 
Changes in valuation allowance   363,984    7,076,539 
Income tax (benefit) expense  $5,563   $(226)
Effective tax rate   (0.03)%   0.00%
Schedule of Improvements to Income Tax Disclosures

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, cash paid for income taxes during the year ended December 31, 2025 was as follows:

 

Mainland China  $7,847 
Total  $7,847 
Schedule of Significant Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities were as follows:

 

   As of December 31, 
   2025   2024 
Deferred tax assets        
Net operating loss carry forwards  $8,403,413   $6,893,492 
Provision for expected credit loss   2,150,488    1,996,852 
Finance lease liabilities   50,429    334,895 
Impairment on inventory   1,435,636    1,204,730 
Impairment of intangible assets   423,172    458,576 
Impairment of long-term investment   609,090    583,539 
Deferred tax assets, gross   13,072,228    11,472,084 
Less: valuation allowance   (12,768,325)   (10,693,306)
Total deferred tax assets, net  $303,903   $778,778 
           
Deferred tax liabilities          
Finance lease right-of-use assets  $303,903   $778,778 
Assets acquired in the asset acquisition   197,392    189,551 
Total deferred tax liabilities  $501,295   $968,329 
Deferred tax assets, net  $
-
   $
-
 
Deferred tax liabilities, net  $197,392   $189,551 
Schedule of Movement of Valuation Allowance

The movement of valuation allowance was as follows:

 

   As of December 31, 
   2025   2024   2023 
Balance at beginning of the year  $10,693,306   $10,605,326   $3,936,504 
Current year addition   1,581,896    363,984    7,076,539 
Foreign currency translation adjustments   493,123    (276,004)   (407,717)
Balance at end of the year  $12,768,325   $10,693,306   $10,605,326 
Schedule of Expiration of Carry Forward Operating Loss The following is a schedule of expiration of carry forward operating loss as of December 31, 2025:
For the years ending December 31,  Amount 
2026  $50,998 
2027   1,213,573 
2028   670,347 
2029   3,094,098 
2030   2,433,218 
2031   
-
 
2032   3,531,458 
2033   8,856,396 
2034   8,340,974 
2035   16,667,523 
Total  $44,858,585